SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by the Party other than the Registrant [_]
[_] Confidential, for Use of the
Check the appropriate box: Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-12
AUTOWEB.COM, INC.
(Name of Registrant as Specified In Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
__________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
__________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
__________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________________________
5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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[Autoweb.com Logo]
May 12, 2000
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Autoweb.com, Inc. to be held at the Company's corporate offices located at
3270 Jay Street, Santa Clara, California, on Wednesday, June 7, 2000, at 10:00
a.m., local time.
The matters expected to be acted upon at the Annual Meeting are described
in detail in the accompanying Notice of Annual Meeting of Stockholders and
Proxy Statement.
It is important that you use this opportunity to take part in the affairs
of your Company by voting on the business to come before this Annual Meeting.
Whether or not you plan to attend the Annual Meeting, please complete, date,
sign and promptly return the accompanying proxy in the enclosed postage-paid
envelope before the Annual Meeting. Returning the Proxy does not deprive you
of your right to attend the Annual Meeting and to vote your shares in person.
We look forward to seeing you at the Annual Meeting.
Sincerely,
Samuel M. Hedgpeth III
President and Chief Operating
Officer
AUTOWEB.COM, INC.
3270 Jay Street
Santa Clara, California 95054
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Autoweb.com, Inc. (the "Company") will be held at the Company's corporate
offices located at 3270 Jay Street, Santa Clara, California, on Wednesday,
June 7, 2000, at 10:00 a.m., local time, for the following purposes:
1. To elect two Class I directors, each to serve until the annual
meeting of Stockholders in 2003 and until his successor has been elected
and qualified or until his earlier resignation or removal. The Company's
Board of Directors intends to present the following nominees for election
as Class I directors:
Dean A. DeBiase and Mark R. Ross
2. To approve an amendment to the Company's 1999 Equity Incentive Plan
to increase the number of shares of common stock reserved for issuance
thereunder from 2,800,000 shares to 5,150,000 shares.
3. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for 2000.
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 12, 2000 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof. A complete list of stockholders entitled to vote at the
Annual Meeting will be open to the examination of any stockholder, for any
purpose relevant to the Annual Meeting, at the Company's offices at 3270 Jay
Street, Santa Clara, California, during the Company's ordinary business hours
for ten days before the Annual Meeting.
By Order of the Board of Directors
Aimee B. Jorgensen
General Counsel and Secretary
Santa Clara, California
May 12, 2000
Whether or not you plan to attend the Annual Meeting, please complete, date,
sign and promptly return the accompanying proxy in the enclosed postage-paid
envelope so that your shares may be represented at the Annual Meeting.
AUTOWEB.COM, INC.
3270 Jay Street
Santa Clara, California 95054
----------------
PROXY STATEMENT
----------------
May 12, 2000
The accompanying proxy is solicited on behalf of the Board of Directors
(the "Board") of Autoweb.com, Inc., a Delaware corporation (the "Company" or
"Autoweb.com"), for use at the Annual Meeting of Stockholders of the Company
to be held at the Company's corporate offices located at 3270 Jay Street,
Santa Clara California, on Wednesday, June 7, 2000, at 10:00 a.m., local time
(the "Annual Meeting"). This Proxy Statement and the accompanying form of
proxy were first mailed to stockholders on or about May 12, 2000. An annual
report for the year ended December 31, 1999 is enclosed with this Proxy
Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Only holders of record of the Company's common stock at the close of
business on April 12, 2000 (the "Record Date") are entitled to vote at the
Annual Meeting. A majority of the shares outstanding on the Record Date will
constitute a quorum for the transaction of business at the Annual Meeting. At
the close of business on the Record Date, the Company had 26,408,054 shares of
common stock outstanding and entitled to vote.
Holders of the Company's common stock are entitled to one vote for each
share held as of the Record Date. Shares of common stock may not be voted
cumulatively.
If a broker, bank, custodian, nominee or other record holder of the
Company's common stock indicates on a proxy that it does not have
discretionary authority to vote certain shares on a particular matter (a
"broker non-vote"), those shares will not be considered present and entitled
to vote with respect to that matter, although they will be counted in
determining the presence of a quorum.
Directors will be elected by a plurality of the votes of the shares of
common stock present in person or represented by proxy at the Annual Meeting
and entitled to vote on the election of directors. Approval of Proposals No. 2
and 3 requires the affirmative vote of the majority of shares of common stock
present in person or represented by proxy at the Annual Meeting that are voted
"for" or "against" the proposal. Neither an abstention nor a broker non-vote
will be counted as a vote "for" or "against" Proposals No. 2 or No. 3. All
votes will be tabulated by the inspector of elections appointed for the Annual
Meeting.
The proxy accompanying this Proxy Statement is solicited on behalf of the
Board for use at the Annual Meeting. Stockholders are requested to complete,
date and sign the accompanying proxy card and promptly return it in the
enclosed envelope. All signed, returned proxies that are not revoked will be
voted in accordance with the instructions contained therein; however, returned
signed proxies that give no instructions as to how they should be voted on a
particular proposal will be counted as votes "for" such proposal (or, in the
case of the election of directors, as a vote "for" election to the Board of
all the nominees presented by the Board).
In the event that sufficient votes in favor of the proposals are not
received by the date of the Annual Meeting, the persons named as proxies may
propose one or more adjournments of the Annual Meeting to permit further
solicitations of proxies. Any such adjournment would require the affirmative
vote of the majority of the shares present in person or represented by proxy
at the Annual Meeting and entitled to vote.
The Company will pay the expenses of soliciting proxies for the Annual
Meeting. The Company has retained Regan & Associates to aid in the
solicitation of proxies from brokers, banks, nominees and
1
intermediaries at a cost of approximately $5,000, plus out-of-pocket expenses.
Following the original mailing of the proxies and other soliciting materials,
the Company will request that brokers, custodians, nominees and other record
holders of the Company's common stock forward copies of the proxy and other
soliciting materials to persons for whom they hold shares of common stock and
request authority for the exercise of proxies. In such cases, the Company,
upon the request of the record holders, will reimburse such holders for their
reasonable expenses. The original solicitation of proxies by mail may be
supplemented by telephone, telegram or personal solicitation by directors,
officers and regular employees of the Company.
REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this Proxy Statement
has the power to revoke it before the Annual Meeting or at the Annual Meeting
before the vote pursuant to the proxy. A proxy may be revoked by a writing
delivered to the Company stating that the proxy is revoked, by a subsequent
proxy that is signed by the person who signed the earlier proxy and is
presented at the Annual Meeting, or by attendance at the Annual Meeting and
voting in person. Please note, however, that if a stockholder's shares are
held of record by a broker, bank or other nominee and that stockholder wishes
to vote at the Annual Meeting, the stockholder must bring to the Annual
Meeting a letter from the broker, bank or other nominee confirming that
stockholder's beneficial ownership of the shares.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Company (the "Board") presently consists of
six members and is divided into three equal classes. Each class serves three
years, with the terms of office of the respective classes expiring in
successive years. Directors in Class I will stand for election at the Annual
Meeting. The terms of office of directors in Class II and Class III do not
expire until the annual meetings of stockholders held in 2001 and 2002,
respectively. The Board proposes that each of the Class I nominees named
below, both of whom are currently serving as Class I directors, be re-elected
as a Class I director for a three-year term expiring at the annual meeting of
stockholders in 2003 and until such director's successor is duly elected and
qualified or until such director's earlier resignation or removal. Shares
represented by the accompanying proxy will be voted for the election of each
of the two nominees named below unless the proxy is marked in such a manner as
to withhold authority so to vote. If any nominee for any reason is unable to
serve or for good cause will not serve, the proxies may be voted for such
substitute nominee as the proxy holder may determine. The Company is not aware
of any nominee who will be unable to or for good cause will not serve as a
director.
Nominees to the Board
Class I Directors with a term expiring at the annual meeting of stockholders
in 2003:
Name of Director Age Principal Occupation Director Since
---------------- --- -------------------- --------------
Dean A. DeBiase............. 41 Chairman of the Board and 1998
Chief Executive Officer
Mark R. Ross(1)............. 54 President, Chief Executive 1996
Officer and Director of On
Word Information, Inc.
- --------
(1) Member of the Audit Committee and the Compensation Committee.
Dean A. DeBiase has served as Chief Executive Officer and a director of
Autoweb.com since December 1998 and Chairman of the Board of Directors since
August 1999. He also served as President from December 1998 to November 1999.
From March 1998 to December 1998, he was the President of Start-Up-Partners,
an Internet consulting company, where he served as interim Chief Executive
Officer and director of CatchTV, a television/Web advertising and programming
company. From January 1995 to March 1998, Mr. DeBiase was the President, Chief
Executive Officer and a director of Worldplay Entertainment, an online games
and community company, which was a wholly-owned subsidiary of America Online.
From September 1993 to January 1995, he was Vice President of Marketing of
Zenith Electronics and Senior Vice President of its Network Systems Division.
Mr. DeBiase received a Bachelor of Science degree in marketing from Northern
Illinois University and a Masters in Business Administration degree from the
Keller Graduate School of Management.
Mark R. Ross has been a director of Autoweb.com since July 1996. Since 1999
Mr. Ross has been a Managing Director of Chatsworth Securities, L.L.C., an
investment firm headquartered in Greenwich, CT. Since May 1996, Mr. Ross has
also been Managing Director of Cogito Capital Partners, L.L.C., a merchant
bank focusing on investing in and raising funds for Internet companies. Mr.
Ross has served on the Board of Advisors of numerous Internet companies,
including iCastle.com and MediaPlex, Inc. Since May 1984, Mr. Ross has served
as President, Chief Executive Officer and a director of On Word Information,
Inc. He received a Bachelor of Science degree in finance from Lehigh
University and studied at the graduate level in education at the University of
Massachusetts.
Continuing Directors
Class II Directors with a term expiring at the annual meeting of stockholders
in 2001:
Name of Director Age Principal Occupation Director Since
---------------- --- -------------------- --------------
Samuel M. Hedgpeth III...... 53 President and Chief 1999
Operating Officer
Mark N. Diker(1)............ 33 Managing Director of 1997
SupplierMarket.com
- --------
(1) Member of the Audit Committee and the Compensation Committee.
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Samuel M. Hedgpeth III has served as President and Chief Operating Officer
of Autoweb.com since November 1999 and a director since December 1999. He also
served as Secretary from September 1999 to January 2000 and as Vice President,
Finance and Administration, Treasurer and Chief Financial Officer from
September 1997 to November 1999. From April 1997 to September 1997,
Mr. Hedgpeth served as a consultant to various high technology companies,
including Excite, Inc. From September 1994 to April 1997, Mr. Hedgpeth was
Vice President, Finance and Administration and Chief Financial Officer for
Prism Solutions, a data warehousing software company. From July 1990 to July
1994, Mr. Hedgpeth was Vice President, Finance and Administration of Versant
Object Technology Corporation, a computer database company. Mr. Hedgpeth
received a Bachelor of Science degree in business administration from the
University of California and a Master of Business Administration degree from
the University of California at Los Angeles.
Mark N. Diker has been a director of Autoweb.com since June 1997. Since
April 2000 Mr. Diker has been Managing Director of SupplierMarket.com, an
online component supplier. From December 1998 to April 2000, Mr. Diker was a
General Partner of Geocapital Partners, L.L.C., a venture capital firm. He
served as a Principal with Geocapital from August 1996 to November 1998. From
September 1994 to May 1996, he attended the Harvard Graduate School of
Business. From January 1992 to April 1994, Mr. Diker served with Bankers Trust
Company as a Vice President of its Japanese Equity Derivative Group in Asia,
where his responsibilities included risk management, structuring and trading
equity derivative products. Mr. Diker received a Bachelor of Arts degree in
government from Harvard College and a Masters in Business Administration
degree from the Harvard Graduate School of Business.
Class III Directors with a term expiring at the annual meeting of
stockholders in 2002:
Jay C. Hoag(1).......... 41 General Partner of Technology Crossover 1998
Ventures
Peter S. Sealey......... 59 Adjunct Professor of Marketing at the Haas 1999
School of Business of the University of
California-Berkeley and Management
Consultant
- --------
(1) Member of the Audit Committee and the Compensation Committee.
Jay C. Hoag has been a director of Autoweb.com since May 1998. Since June
1995, Mr. Hoag has been a General Partner of Technology Crossover Ventures, a
venture capital firm. From 1982 to December 1994, Mr. Hoag served in a variety
of capacities at Chancellor Capital Management, Inc. Mr. Hoag currently serves
on the board of directors of eLoyalty, a customer loyalty solutions company,
iVillage, Inc., an online network for women, ONYX Software Corporation, a
customer management software company, and several private companies. He
received a Bachelor of Arts degree in Economics and Political Science from
Northwestern University and a Masters in Business Administration degree from
the University of Michigan.
Peter S. Sealey has been a director of Autoweb.com since February 1999.
Since January 1998, Dr. Sealey has been an adjunct Professor of Marketing at
the Haas School of Business of the University of California-Berkeley. Since
October 1995, he has served as Management Consultant to several companies,
including Anheuser-Busch, Inc., CKS/Group, Inc., CyberGold, Inc., Encanto
Networks, Inc., Hewlett-Packard Company, ImproveNet, Inc., Intouch Group,
Inc., Round Table Pizza, SOMA Research and Technology, Sony Online Ventures,
United Parcel Service and Visa U.S.A. Dr. Sealey received a Bachelor of
Science degree in business from the University of Florida, a Masters in
Industrial Administration degree from Yale University and Masters and
Doctorate degrees in management at Claremont Graduate University.
Board of Directors' Meetings and Committees
During 1999, the Board met 10 times, including telephone conference
meetings and acted by written consent five times. No director attended fewer
than 75% of the aggregate of the total number of meetings of the Board (held
during the period for which he was a director) and the total number of
meetings held by all committees of the Board on which such director served
(during the period that such director served).
4
Standing committees of the Board include an Audit Committee and a
Compensation Committee.
The current members of the Audit Committee are Messrs. Diker, Hoag and
Ross. The Audit Committee met once during 1999. The Audit Committee meets with
the Company's independent auditors to review the adequacy of the Company's
internal control systems and financial reporting procedures; reviews the
general scope of the Company's annual audit and the fees charged by the
independent auditors; reviews and monitors the performance of non-audit
services by the Company's auditors; reviews the fairness of any proposed
transaction between any officer, director or other affiliate of the Company
and the Company, and after such review, makes recommendations to the full
Board; and performs such further functions as may be required by any stock
exchange or over-the-counter market upon which the Company's common stock may
be listed.
The current members of the Compensation Committee are Messrs. Diker, Hoag
and Ross. The Compensation Committee met nine times and acted by written
consent four times during 1999. The Compensation Committee recommends
compensation for officers and employees of the Company, grants options and
stock awards under the Company's employee benefit plans and reviews and
recommends adoption of and amendments to stock option and employee benefit
plans.
Compensation Committee Interlocks and Insider Participation
None of the members of the compensation committee of the board has at any
time since our formation been an officer or employee of Autoweb.com. No
executive officer of Autoweb.com serves as a member of the board of directors
or compensation committee of any entity that has one or more executive
officers serving on our board or compensation committee.
Director Compensation
Our directors do not receive cash compensation for their services as
directors but are reimbursed for their reasonable and necessary expenses for
attending board and board committee meetings. Members of the Board who are not
employees of Autoweb.com, or any parent, subsidiary or affiliate of
Autoweb.com, are eligible to participate in the Company's 1999 Directors Stock
Option Plan unless they are representatives of venture capital funds or
corporate investors.
In January 1999, the board adopted, and in March 1999 our stockholders
approved, the 1999 Directors Stock Option Plan. We have reserved a total of
150,000 shares of common stock for issuance under the directors' plan. Members
of the board who are not employees of Autoweb.com, or any parent, subsidiary
or affiliate of Autoweb.com, will be eligible to participate in the directors
plan unless they are representatives of venture capital funds or corporate
investors. The option grants under the directors' plan are automatic and
nondiscretionary, and the exercise price of the options must be 100% of the
fair market value of the common stock on the date of grant. Each eligible
director who becomes a member of the board will initially be granted an option
to purchase 15,000 shares (an "Initial Grant") on the date the director first
becomes a director. Immediately following each annual meeting of our
stockholders, each eligible director will automatically be granted an
additional option to purchase 7,500 shares if the director has served
continuously as a member of the board since the date of the director's Initial
Grant. The term of these options is ten years, provided that they will
terminate seven months following the date the director ceases to be a director
or a consultant of Autoweb.com or 12 months if the termination is due to death
or disability. All options granted under the directors plan will vest over
four years at a rate of 2.08% per month, provided the optionee continues as a
member of the board or as a consultant to Autoweb.com. In the event of our
dissolution or liquidation or a "change in control" transaction, options
granted under the directors plan will become 100% vested and exercisable in
full.
5
In February 1999, Mr. Sealey was elected to our board and received an
option to purchase 15,000 shares of common stock at an exercise price of $6.00
per share under our 1997 Stock Option Plan. In July 1999, Mr. Sealey was
granted an additional option under our 1999 Equity Incentive Plan to purchase
15,000 shares at $14.719 per share. All of Mr. Sealey's options vest over four
years at the rate of 2.08% per month, provided that he continues as a member
of the board or as a consultant to Autoweb.com.
The Board recommends a vote for the election of each of the nominated
directors.
6
PROPOSAL NO. 2
AMENDMENT OF 1999 EQUITY INCENTIVE PLAN
Stockholders are being asked to approve an amendment to the Company's 1999
Equity Incentive Plan (the "Incentive Plan") to increase the number of shares
of common stock reserved for issuance thereunder by 2,350,000 shares, from
2,800,000 shares to 5,150,000 shares.
The Company's rapid growth has generated substantial need for meaningful
option grants to attract and retain talented employees critical to the
Company's continuing growth and success. The ongoing growth of the Internet
and online services market has created a hypercompetitive market for talented
individuals, especially in the programming, technical, product management and
sales areas. In order to continue to attract and retain key talent, the
Company must offer market competitive long-term compensation opportunities.
Stock options, because of their upside potential and vesting requirements are
a key component in recruiting and retaining these employees.
The Board approved the proposed amendment on April 27, 2000, to be
effective upon stockholder approval. Below is a summary of the principal
provisions of the Incentive Plan, assuming stockholder approval of the
amendment. The summary is not necessarily complete, and reference is made to
the full text of the Incentive Plan.
Incentive Plan History
In January 1999, the board adopted, and in March 1999 our stockholders
approved, the Incentive Plan and reserved for issuance thereunder 2,800,000
shares in addition to shares under the 1997 Stock Option Plan ("Prior Plan")
not issued or subject to outstanding grants on March 23, 1999, the date of our
initial public offering, and any shares issued under the Prior Plan that are
forfeited or repurchased by Autoweb.com or that are issuable upon exercise of
options granted pursuant to the Prior Plan that expire or become unexercisable
for any reason without having been exercised in full. The purpose of the
Incentive Plan is to offer eligible persons an opportunity to participate in
the Company's future performance through grants of incentive stock options,
nonqualified stock options (at not less than 85% of fair market value),
restricted stock awards and stock bonus awards. The Incentive Plan serves as
the successor to our Prior Plan that terminated upon effectiveness of the
Incentive Plan.
From inception of the Incentive Plan in March 1999 to April 12, 2000,
options to purchase an aggregate of 3,180,254 shares of the Company's common
stock were granted under the Incentive Plan, including options that were later
terminated before they were exercised. (If any option or other award
terminates without being exercised or issued, then the shares covered by the
terminated option or award generally go back into the Incentive Plan for
future grants or awards.) Of these, options were granted to the Named
Executive Officers (as defined under "Executive Compensation" below) as
follows: Samuel M. Hedgpeth III--289,997 shares; Gordon H. Kass--22,500
shares; David L. Greene--28,607 shares and Robert M. Shapiro--47,500 shares.
During the same period, the Company's current executive officers as a group
(12 persons) had been granted options to purchase a total of 906,854 shares
and the current directors or nominees for election as a director who are not
executive officers as a group (1 person--Peter S. Sealey) had been granted
options to purchase a total of 30,000 shares. No options were granted during
the period under the Incentive Plan to any associate of any executive officer
or director of the Company, and no other person received 5% or more of such
options.
Shares Subject to the Incentive Plan
The stock subject to issuance under the Incentive Plan consists of shares
of the Company's authorized but unissued common stock. The Board has reserved
an aggregate of 2,800,000 shares of common stock for issuance under the
Incentive Plan. In addition, any shares remaining unissued under the Company's
Prior Plan
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on the effective date of the Incentive Plan, including any shares issuable
upon exercise of options granted pursuant to the Prior Plan that expire or
become unexercisable for any reason without having been exercised in full, are
no longer available for distribution under the Prior Plan but are available
for distribution under the Incentive Plan. Shares that: (a) are subject to
issuance upon exercise of an option granted under the Incentive Plan that
cease to be subject to such option for any reason other than exercise of such
option; (b) have been issued pursuant to the exercise of an option granted
under the Incentive Plan that are subsequently forfeited or repurchased by
Autoweb.com at the original purchase price; (c) are subject to an award
granted pursuant to a restricted stock purchase agreement under the Incentive
Plan that are subsequently forfeited or repurchased by Autoweb.com at the
original issue price; or (d) are subject to stock bonuses granted under the
Incentive Plan that otherwise terminate without shares being issued, will
again be available for grant and issuance under the Incentive Plan. The number
of shares covered by the Incentive Plan is subject to proportional adjustment
to reflect stock splits, stock dividends and other similar events.
Eligibility
Employees, officers, directors, consultants, independent contractors and
advisors of the Company (and of any subsidiaries and affiliates) are eligible
to receive awards under the Incentive Plan (the "Participants"). No
Participant is eligible to receive more than 1,000,000 shares of common stock
in any calendar year under the Incentive Plan, other than new employees of the
Company (including directors and officers who are also new employees) who are
eligible to receive up to a maximum of 2,000,000 shares of common stock in the
calendar year in which they commence their employment with the Company. As of
April 12, 2000, approximately 230 persons were eligible to participate in the
Incentive Plan, 16,500 shares had been issued upon exercise of options and
2,583,371 shares were subject to outstanding options. As of that date,
2,550,129 shares were available for future grant pursuant to the Incentive
Plan, after taking into account the proposed amendment to the Incentive Plan
and the shares originally reserved for issuance under the Prior Plan that have
become available for distribution under the Incentive Plan. The closing price
of the Company's common stock on the Nasdaq National Market was $5.6875 per
share on April 11, 2000, the last trading day before the Record Date. As the
Company's officers and directors are eligible to participate in the Incentive
Plan, they may have an interest in the proposed amendment to increase the
number of shares authorized for issuance thereunder.
Administration
The Compensation Committee of the Board of Directors (the "Committee")
administers the Incentive Plan. The Committee currently consists of Mark N.
Diker, Jay C. Hoag and Mark R. Ross, each of whom are "non-employee
directors," as defined in Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and "outside directors," as
defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code").
Subject to the terms of the Incentive Plan, the Committee determines the
persons who are to receive awards, the number of shares subject to each award
and the terms and conditions of awards. The Committee also has the authority
to construe and interpret any of the provisions of the Incentive Plan or any
awards granted thereunder.
Stock Options
The Incentive Plan permits the granting of options that are intended to
qualify either as Incentive Stock Options ("ISOs") that qualify under Section
422 of the Code or Nonqualified Stock Options ("NQSOs"). ISOs may be granted
only to employees (including officers and directors who are also employees) of
the Company or any parent or subsidiary of the Company. The option exercise
price for each ISO share must be no less than 100% of the "fair market value"
(as defined in the Incentive Plan) of a share of common stock at the time of
grant. The per share exercise price of an ISO granted to a 10% stockholder
must be no less than 110% of the fair market value of a share of common stock
at the time of grant. The option exercise price for each NQSO share must be no
less than 85% of the fair market value of a share of common stock at the time
of grant. The Company has not granted options under the Incentive Plan at less
than fair market value and does not intend to do so in the foreseeable future.
Options granted under the Incentive Plan have a maximum term of ten years.
8
Awards granted under the Incentive Plan may not be transferred in any manner
other than by will or by the laws of descent and distribution and may be
exercised during the lifetime of the optionee only by the optionee (unless
otherwise determined by the compensation committee and set forth in the award
agreement with respect to awards that are not incentive stock options).
The exercise price of options granted under the Incentive Plan may be paid
as approved by the Committee at the time of grant: (1) in cash (by check); (2)
by cancellation of indebtedness of the Company to the Participant; (3) by
surrender of shares of the Company's common stock owned by the Participant for
at least six months and having a fair market value on the date of surrender
equal to the aggregate exercise price of the option; (4) by tender of a full
recourse promissory note; (5) by waiver of compensation due to or accrued by
the Participant for services rendered; (6) by a "same-day sale" commitment
from the Participant and a National Association of Securities Dealers, Inc.
("NASD") broker; (7) by a "margin" commitment from the Participant and an NASD
broker; or (8) by any combination of the foregoing. Options granted under the
Incentive Plan generally may be exercised for a period of time after the
termination of the optionee's service to Autoweb.com or a parent or subsidiary
of Autoweb.com. Options will generally terminate immediately upon termination
for cause.
Restricted Stock Awards
The Committee may grant Participants restricted stock awards to purchase
stock either in addition to, or in tandem with, other awards under the
Incentive Plan, under such terms, conditions and restrictions as the Committee
may determine. The Committee determines the purchase price for restricted
stock awards. The purchase price for such awards must be no less than 85% of
the fair market value of the Company's common stock on the date of the award
(and in the case of an award granted to a 10% stockholder, the purchase price
shall be 100% of fair market value) and can be paid for in any of the forms of
consideration listed in items (1) through (5) in "Stock Options" above, as are
approved by the Committee at the time of grant. The Company has not granted
any restricted stock awards under the Incentive Plan.
Stock Bonus Awards
The Committee may grant Participants stock bonus awards either in addition
to, or in tandem with, other awards under the Incentive Plan, under such
terms, conditions and restrictions as the Committee may determine. During
1999, no shares were issued pursuant to stock bonus awards.
Mergers, Consolidations, Change of Control
In the event of a merger, consolidation, dissolution or liquidation of the
Company, the sale of substantially all of the assets of the Company or any
other similar corporate transaction, the successor corporation may assume,
replace or substitute equivalent awards in exchange for those granted under
the Incentive Plan or provide substantially similar consideration, shares or
other property as was provided to stockholders of the Company (after taking
into account provisions of the awards). In the event that the successor
corporation does not assume or substitute awards, such awards will expire upon
the closing of such transaction at the time and upon the conditions as the
Board determines.
Amendment of the Incentive Plan
The Board may at any time terminate or amend the Incentive Plan, including
amending any form of award agreement or instrument to be executed pursuant to
the Incentive Plan. However, the Board may not amend the Incentive Plan in any
manner that requires stockholder approval pursuant to the Code or the
regulations promulgated thereunder.
Term of the Incentive Plan
Unless terminated earlier as provided in the Incentive Plan, the Incentive
Plan will expire in January 2009, ten years after the date the Board adopted
the Incentive Plan.
9
Federal Income Tax Information
The following is a general summary as of the date of this Proxy Statement
of the federal income tax consequences to the Company and Participants under
the Incentive Plan. Federal tax laws may change and the federal, state and
local tax consequences for any Participant will depend upon his or her
individual circumstances. Each Participant has been and is encouraged to seek
the advice of a qualified tax advisor regarding the tax consequences of
participation in the Incentive Plan.
Incentive Stock Options. A Participant will recognize no income upon grant
of an ISO and incur no tax on its exercise (unless the Participant is subject
to the alternative minimum tax ("AMT") as described below). If the Participant
holds shares acquired upon exercise of an ISO (the "ISO Shares") for more than
one year after the date the option was exercised and for more than two years
after the date the option was granted, the Participant generally will realize
capital gain or loss (rather than ordinary income or loss) upon disposition of
the ISO Shares. This gain or loss will be equal to the difference between the
amount realized upon such disposition and the amount paid for the ISO Shares.
If the Participant disposes of ISO Shares prior to the expiration of either
required holding period (a "disqualifying disposition"), the gain realized
upon such disposition, up to the difference between the fair market value of
the ISO Shares on the date of exercise (or, if less, the amount realized on a
sale of such shares) and the option exercise price, will be treated as
ordinary income. Any additional gain will be capital gain, taxed at a rate
that depends upon the amount of time the ISO Shares were held by the
Participant.
Alternative Minimum Tax. The difference between the fair market value of
the ISO Shares on the date of exercise and the exercise price is an adjustment
to income for purposes of AMT. The AMT (imposed to the extent it exceeds the
taxpayer's regular tax) is 26% of an individual taxpayer's alternative minimum
taxable income (28% in the case of alternative minimum taxable income in
excess of $175,000). A maximum 20% AMT rate applies to the portion of
alternative minimum taxable income that would otherwise be taxable as net
capital gain. Alternative minimum taxable income is determined by adjusting
regular taxable income for certain items, increasing that income by certain
tax preference items (including the difference between the fair market value
of the ISO Shares on the date of exercise and the exercise price), and
reducing this amount by the applicable exemption amount ($45,000 in case of a
joint return, subject to reduction under certain circumstances). If a
disqualifying disposition of the ISO Shares occurs in the same calendar year
as exercise of the ISO, there is no AMT adjustment with respect to those ISO
Shares. Also, upon a sale of ISO Shares that is not a disqualifying
disposition, alternative minimum taxable income is reduced in the year of sale
by the excess of the fair market value of the ISO Shares at exercise over the
amount paid for the ISO Shares.
Nonqualified Stock Options. A Participant will not recognize any taxable
income at the time an NQSO is granted. However, upon exercise of an NQSO, the
Participant must include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise
and the Participant's exercise price. The included amount must be treated as
ordinary income by the Participant and may be subject to withholding by the
Company (either by payment in cash or withholding out of the Participant's
salary). Upon resale of the shares by the Participant, any subsequent
appreciation or depreciation in the value of the shares will be treated as
capital gain or loss.
Restricted Stock and Stock Bonus Awards. Restricted stock and stock bonus
awards will generally be subject to tax at the time of receipt, unless there
are restrictions that enable the Participant to defer tax. At the time the tax
is incurred, the tax treatment will be similar to that discussed above for
NQSOs.
Maximum Tax Rates. The maximum tax rate applicable to ordinary income is
39.6%. Long-term capital gain is taxed at a maximum rate of 20%. To receive
long-term capital gain treatment, the stock must be held for more than one
year. Capital gains may be offset by capital losses and up to $3,000 of
capital losses may be offset annually against ordinary income.
10
Tax Treatment of the Company. The Company generally will be entitled to a
deduction in connection with the exercise of an NQSO by a Participant or the
receipt of restricted stock or stock bonuses by a Participant to the extent
that the Participant recognizes ordinary income, provided that the Company
timely reports such income to the Internal Revenue Service. The Company will
be entitled to a deduction in connection with the disposition of ISO Shares
only to the extent that the Participant recognizes ordinary income on a
disqualifying disposition of the ISO Shares.
ERISA. The Incentive Plan is not subject to any of the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA") and is not qualified
under Section 401(a) of the Code.
The Board recommends a vote for the amendment of the 1999 Equity Incentive
Plan
NEW PLAN BENEFITS
The amounts of future option grants under the Incentive Plan are not
determinable because, under the terms of the Incentive Plan, such grants are
made in the discretion of the Committee. Future option exercise prices are not
determinable because they are based upon fair market value of the Company's
common stock on the date of grant. Similarly, the amounts of future stock
purchases under the Stock Purchase Plan are not determinable because, under
the terms of the Stock Purchase Plan, purchases are based upon elections made
by Participating Employees. Future purchase prices are not determinable
because they are based upon fair market value of the Company's common stock.
Only Outside Directors of the Company who are not representatives of
venture capital funds or corporate investors are eligible to participate in
the Directors Plan. The grant of options under the Directors Plan is not
discretionary. Under the Directors Plan, each outside director is
automatically granted an option to purchase 7,500 shares of the Company's
common stock on the date of each Annual Meeting at which he continues to serve
as an outside director. Each outside director who first joins the Board before
the next annual meeting is automatically granted an option to purchase 15,000
shares of the Company's common stock on the date of his or her first
appointment to the Board. The exercise prices of these options are not
determinable because they are equal to fair market value of the Company's
common stock on the date of grant.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Company has selected PricewaterhouseCoopers LLP as its independent
auditors to perform the audit of the Company's financial statements for 2000
and the stockholders are being asked to ratify such selection.
PricewaterhouseCoopers LLP has been the Company's independent auditor since
October 3, 1995. Representatives of PricewaterhouseCoopers LLP will be present
at the Annual Meeting, will have the opportunity to make a statement at the
Annual Meeting if they desire to do so, and will be available to respond to
appropriate questions.
The Board recommends a vote for the ratification of the selection of
PricewaterhouseCoopers LLP
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us with respect
to beneficial ownership of our common stock as of April 12, 2000 by (1) each
stockholder known by us to be the beneficial owner of more than 5% of our
common stock, (2) each of our directors, (3) each Named Executive Officer (as
defined under "Executive Compensation" below) and (4) all current executive
officers and directors as a group.
Shares
Beneficially
Owned(1)
------------------
Name of Beneficial Owner Number Percent
- ------------------------ ---------- -------
Geocapital IV, L.P.(2)..................................... 3,416,842 12.94
Jay C. Hoag................................................ 2,929,608 11.09
Technology Crossover Ventures(3)
Payam Zamani(4)............................................ 2,321,430 8.79
Mark R. Ross............................................... 2,191,251 8.30
On Word Information, Inc.(5)
Dean A. DeBiase(6)......................................... 1,630,476 5.94
Farhang Zamani(7).......................................... 1,414,679 5.36
Samuel M. Hedgpeth III(8).................................. 257,231 *
Gordon H. Kass(9).......................................... 36,562 *
David L. Greene(10)........................................ 75,952 *
Robert M. Shapiro(11)...................................... 61,406 *
Peter S. Sealey(12)........................................ 19,688 *
Mark N. Diker(13).......................................... -- --
All directors and executive officers as a group (15
persons)(14).............................................. 10,773,398 38.72%
- --------
* Represents beneficial ownership of less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Unless otherwise indicated
below, the persons and entities named in the table have sole voting and
sole investment power with respect to all shares beneficially owned,
subject to community property laws where applicable. Shares of common
stock subject to options that are currently exercisable or exercisable
within 60 days of April 12, 2000 are deemed to be outstanding and to be
beneficially owned by the person holding such options for the purpose of
computing the percentage ownership of such person but are not treated as
outstanding for the purpose of computing the percentage ownership of any
other person.
(2) Based on a Schedule 13G filed with the Commission on February 14, 2000.
All of the shares are held of record by Geocapital IV, L.P. Geocapital
IV, L.P., its sole general partner Geocapital IV Management, L.P. and
Geocapital IV Management, L.P.'s general partners, Stephen J. Clearman,
Lawrence W. Lepard and Richard A. Vines each hold shared voting and
dispositive power with respect to the all of the shares. Geocapital IV
Management, L.P., Stephen J. Clearman, Lawrence W. Lepard and Richard A.
Vines each expressly disclaims beneficial ownership, except to the extent
of its or his pecuniary interest therein, if any. The address of
Geocapital IV, L.P. is One Bridge Plaza, Fifth Floor, Fort Lee, NJ 07024.
The address of Geocapital IV, L.P. is One Bridge Plaza, Fifth Floor, Fort
Lee, New Jersey 07024.
(3) Represents 1,401,448 shares held of record by Technology Crossover
Ventures II, L.P., 1,077,453 shares held of record by TCV II (Q), L.P.,
213,973 shares held of record by Technology Crossover Ventures II, C.V.,
191,209 shares held of record by TCV II Strategic Partners, L.P. and
45,525 shares held of record by TCV II, V.O.F. Mr. Hoag, one of our
directors, is a managing member of Technology Crossover Management II,
L.L.C., the general partner of Technology Crossover Ventures. Mr. Hoag
has shared voting and investment power over all of these shares and he
disclaims beneficial ownership of these shares except to the extent of
his pecuniary interest in such shares arising from his interest in
Technology Crossover
12
Management II, L.L.C. The address for Mr. Hoag and each of these entities
is Technology Crossover Ventures, 575 High Street, Suite 400, Palo Alto,
California 94301.
(4) Mr. Payam Zamani is a co-founder and former executive officer and
director of the company. Mr. Zamani resigned his executive officer and
director positions with the company during 1999. Mr. Zamani's address is
Purpletie.com, 4780 Chabot Drive, Second Floor, Pleasanton, CA 94588.
(5) Represents 1,864,863 held of record by On Word Information, Inc., 84,906
shares held of record by Mark Ross' wife and 84,967 shares held of record
by Mark Ross. The address of Mark Ross, one of our directors, and On Word
Information, Inc. is 1644 Warnall Avenue, Los Angeles, CA 90024. Also
represents shares held of record by Robert Ross and John Davies in the
amounts of 75,515 and 81,000, respectively. Robert Ross and John Davies
are directors of OnWord Information, Inc..
(6) Includes an immediately exercisable option to purchase 1,034,816 shares
of common stock, of which 336,639 shares are vested. Mr. DeBiase is our
Chairman of the Board and Chief Executive Officer. His address is c/o
Autoweb.com, Inc., 3270 Jay Street, Building 6, Santa Clara, California
95054.
(7) Mr. Farhang Zamani is a co-founder and former executive officer and
director of the company. Mr. Zamani resigned his executive officer and
director positions with the company during 1999. Mr. Zamani's address is
P.O. Box 848, Cupertino, CA 95015.
(8) Includes the purchase of 195,011 shares of our common stock, of which
42,649 shares are unvested and subject to our right of repurchase. Also
includes options to purchase 72,220 shares of our common stock, of which
46,942 shares are vested as of April 12, 2000. Mr. Hedgpeth is our
President and Chief Operating Officer.
(9) Includes the purchase of 36,562 shares of our common stock from an
immediately exercisable option. Mr. Kass was our Chief Technology Officer
until January 2000.
(10) Represents options to purchase 70,952 shares of common stock, of which
29,656 shares are vested as of April 12, 2000. Mr. Greene is our Vice
President, Sales and Dealer Network Operations.
(11) Represents options to purchase 61,406 shares of our common stock, of
which 20,051 shares are vested as of April 12, 2000. Mr. Shapiro is our
Vice President, Global Sales.
(12) Represents options to purchase 19,688 shares of our common stock, of
which 8,126 shares are vested as of April 12, 200. Mr. Sealey is one of
our directors.
(13) Mr. Diker is a director of the company.
(14) Includes the shares beneficially owned by the persons and entities
described in footnotes (2)-(13) and includes (i) 42,649 shares of our
common stock which are unvested and subject to our right of repurchase
and (ii) exercisable options to purchase 1,259,082 shares of common
stock, of which 441,414 shares are vested as of April 12, 2000.
13
MANAGEMENT
Executive Officers and Directors
The following table sets forth certain information regarding our executive
officers as of April 12, 2000.
Name Age Position
- ---- --- --------------------------------------------------------
Dean A. DeBiase......... 41 Chairman of the Board and Chief Executive Officer
Samuel M. Hedgpeth III.. 53 President, Chief Operating Officer and Director
Thomas L. Stone......... 28 Chief Financial Officer
Catherine Y. Gordon..... 50 Vice President, Product Management
David L. Greene......... 41 Vice President, Sales and Dealer Network Operations
John E. Peters.......... 45 Vice President, Finance and Principal Accounting Officer
Fred L. Ruffin.......... 49 Vice President, Human Resources
Jeffrey A. Schwartz..... 34 Vice President, Strategic Development
Robert M. Shapiro....... 54 Vice President, Global Sales
James G. Wolfe.......... 38 Vice President, Marketing
Dean A. DeBiase has served as Chief Executive Officer and a director of
Autoweb.com since December 1998 and Chairman of the Board of Directors since
August 1999. He also served as President from December 1998 to November 1999.
From March 1998 to December 1998, he was the President of Start-Up-Partners, an
Internet consulting company, where he served as interim Chief Executive Officer
and director of CatchTV, a television/Web advertising and programming company.
From January 1995 to March 1998, Mr. DeBiase was the President, Chief Executive
Officer and a director of Worldplay Entertainment, an online games and
community company, which was a wholly-owned subsidiary of America Online. From
September 1993 to January 1995, he was Vice President of Marketing of Zenith
Electronics and Senior Vice President of its Network Systems Division. Mr.
DeBiase received a Bachelor of Science degree in marketing from Northern
Illinois University and a Masters in Business Administration degree from the
Keller Graduate School of Management.
Samuel M. Hedgpeth III has served as President and Chief Operating Officer
of Autoweb.com since November 1999 and a director since December 1999. He also
served as Secretary from September 1999 to January 2000 and as Vice President,
Finance and Administration, Treasurer and Chief Financial Officer from
September 1997 to November 1999. From April 1997 to September 1997, Mr.
Hedgpeth served as a consultant to various high technology companies, including
Excite, Inc. From September 1994 to April 1997, Mr. Hedgpeth was Vice
President, Finance and Administration and Chief Financial Officer for Prism
Solutions, a data warehousing software company. From July 1990 to July 1994,
Mr. Hedgpeth was Vice President, Finance and Administration of Versant Object
Technology Corporation, a computer database company. Mr. Hedgpeth received a
Bachelor of Science degree in business administration from the University of
California and a Master of Business Administration degree from the University
of California at Los Angeles.
Thomas L. Stone has served as Chief Financial Officer and Treasurer since
November 1999. From September 1999 to January 2000, Mr. Stone also served as
Vice President, Finance. He also served as Director of Finance from April 1999
to September 1999, Director of Financial Planning from December 1998 to April
1999 and Manager of Financial Planning from January 1998 to December 1998. From
March 1994 to August 1997, Mr. Stone was a Financial Analyst with Morgan
Stanley, an investment banking firm, in their West Coast Technology and West
Coast Health Care groups. Mr. Stone received a Bachelor of Arts degree in
Computer Science from Harvard University.
Catherine Y. Gordon has served as Vice President, Product Management since
February 1999. From June 1998 to February 1999, Ms. Gordon was Chief Operating
Officer and Vice President, Marketing for DATAFUSION, Inc., a software
development company. From January 1998 to April 1998, Ms. Gordon provided
consulting services to technology companies. From July 1984 to January 1998,
she held various positions with
14
Knight-Ridder Information, an online research service, most recently as Senior
Vice President Marketing and Product Management. Ms. Gordon received a
Bachelor of Arts degree in history from Immaculata College and a Masters in
Library Science degree from Villanova University.
David L. Greene has served as Vice President, Sales and Dealer Network
Operations of Autoweb.com since November 1999 and from January 1998 to January
1999. From January 1999 to November 1999 he served as Vice President, Major
Market Sales and Dealers Training. From December 1996 to January 1998, Mr.
Greene was a Training and Performance Consultant with the Rikess Group, a Los
Angeles based training and consulting company focusing in automotive sales.
Prior to this, Mr. Greene was General Sales Manager with several automotive
dealerships, including Stanford Lincoln-Mercury from June 1996 to December
1996, Burlingame Ford from March 1995 to June 1996 and McHugh Lincoln-Mercury
from January 1989 to March 1995. Mr. Greene attended the University of
Southern California, where he majored in journalism.
John E. Peters has served as Vice President, Finance of Autoweb.com since
January 2000. Mr. Peters served as senior manager in the international
services arena for KPMG from December 1996 to December 1999. From August 1988
to December 1996, Mr. Peters held a variety of positions, including Vice
President, Finance for Develco, Inc., a technology development company. He
served as an audit consultant for KPMG from July 1979 to August 1988. Mr.
Peters received a Bachelor of Science degree in Business from California State
University at Hayward and is a Certified Public Accountant in the state of
California.
Fred L. Ruffin has served as Vice President, Human Resources of Autoweb.com
since January 2000. From June 1994 to January 2000, Mr. Ruffin was Vice
President, Eastfield Ming Quong, Inc., a non-profit company. Prior to this,
Mr. Ruffin served as Vice President, Human Resources and Director, Human
Resources for Digital F/X, Inc. from July 1989 to June 1994. Previously, from
November 1986 to July 1989, Mr. Ruffin served as Manager, Human Resources at
Digital Equipment Corp, a computer company. From October 1984 to November
1986, Mr. Ruffin served as Director, Human Resources at Trilogy Corp, a
software company subsequently acquired by Digital Equipment Corp. From
November 1980 to October 1984, Mr. Ruffin served as Director, Human Resources
at Genentech, Inc., a biotechnology company. Previously, from June 1976 to
November 1980, Mr. Ruffin served as Director, Corporate Staff Industrial
Relations at Memorex Corp., a consumer electronics company. Mr. Ruffin
received a Bachelor of Arts degree in Psychology and Industrial Relations from
San Francisco State University.
Jeffrey A. Schwartz has served as Vice President, Strategic Development
since October 1999. From 1995 to 1999, Mr. Schwartz held various positions at
The Walt Disney Company, including Corporate Vice President responsible for
worldwide corporate alliance business development. In this role, Schwartz was
responsible for executing the company's long-term strategic marketing,
promotional, advertising, and licensing relationships. During his tenure at
Disney, Mr. Schwartz held several positions inside of the corporate group and
was responsible for worldwide political affairs, governmental relations, and
various strategic business communications and representations functions. From
1993 to 1995, Mr. Schwartz was a principal of California Communications Group,
advising corporate, non-profit, and governmental clients. Mr. Schwartz
received a Bachelors of Arts, Master of Arts, and Doctorate in Political
Science from the University of Southern California. Mr. Schwartz received
Bachelor of Arts, Master of Arts and Ph.D. degrees in Political Science from
the University of Southern California.
Robert M. Shapiro has served as Vice President, Global Sales since January
2000. From December 1998 to January 2000, Bob Shapiro served as Vice
President, Business Development and Advertising Sales. From June
15
1997 to December 1998, he was a consultant with Shapiro Group, a consulting
firm. From May 1995 to June 1997, Mr. Shapiro was the Senior Vice President of
Product Management and Marketing with R. L. Polk, a global information
services company. From January 1984 to May 1995, Mr. Shapiro held a variety of
positions, including Vice President of Marketing, with Prodigy Services
Company, an interactive services provider. Mr. Shapiro received a Bachelor of
Arts degree in political science from the University of San Diego.
James G. Wolfe has served as Vice President, Marketing since November 1999.
Previously, he served as Director of Marketing since joining the Company in
August 1999. Mr. Wolfe served The Clorox Company, a household products
company, as Director of Marketing from February 1999 to August 1999, as Brand
Manager from September 1996 to January 1999 and as Associate Marketing Manager
from November 1993 to August 1996. Mr. Wolfe received a Bachelor of Science
degree in Chemical Engineering from Arizona State University and a Masters in
Business Administration from the University of California at Berkeley.
16
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid for services rendered to us in all capacities during 1998 and 1999 by our
Chief Executive Officer and our four most highly compensated executive
officers who were serving as executive officers at the end of 1999 and one
executive officer who resigned during 1999 (each, a "Named Executive
Officer").
Summary Compensation Table
Long-Term
Annual Compensation
Compensation Awards
------------------ ------------
Securities
Underlying
Name and Principal Position Year Salary($) Bonus($) Options(#)
- --------------------------- ---- --------- -------- ------------
Dean DeBiase.............................. 1999 250,000 100,000 --
Chairman of the Board and Chief Executive
Officer(1) 1998 -- -- 1,780,476
Samuel M. Hedgpeth III.................... 1999 166,875 36,000 304,987
President and Chief Operating Officer 1998 140,833 36,101 60,883
Gordon H. Kass............................ 1999 156,479 -- 135,000
Chief Technology Officer(1) 1998 -- -- --
David L. Greene........................... 1999 144,000 90,018 47,107
Vice President, Sales and Dealer Network
Operations 1998 110,032 66,121 52,893
Robert M. Shapiro......................... 1999 128,333 66,154 47,500
Vice President, Global Sales(1) 1998 7,608 -- 52,500
Payam Zamani.............................. 1999 125,000 65,810 --
Former Chief Executive Officer and
Executive Vice President(2) 1998 95,000 220,102 --
- --------
(1) Dean A. DeBiase and Robert M. Shapiro were each hired in December 1998 and
Gordon H. Kass was hired in February 1999.
(2) Payam Zamani was Chief Executive Officer from October 1998 to December
1998 and Executive Vice President from January 1999 to July 1999.
17
Option Grants in 1999
The following Named Executive Officers received grants of options in 1999.
Potential Realizable
Percentage Value at Assumed
Number of of Total Annual Rates of Stock
Securities Options Exercise Price Appreciation
Underlying Granted to Price for Option Term(4)
Options Employees Per Expiration ---------------------
Name Granted(1) In 1999(2) Share(3) Date 5% 10%
- ---- ---------- ---------- -------- ---------- ---------- ----------
Dean A. DeBiase......... -- --% $ -- -- $ -- $ --
Samuel M. Hedgpeth III.. 15,000 0.5% 3.33 1/21/09 31,413 79,607
29,987 1.0% 9.00 9/21/09 169,728 430,124
260,000 8.3% 8.75 11/5/09 1,430,735 3,625,764
Gordon H. Kass.......... 112,500 3.6% 3.33 2/25/09 235,600 597,056
22,500 0.7% 9.00 9/21/09 127,351 322,733
David L. Greene......... 6,000 0.2% 3.33 1/21/09 12,565 31,843
12,500 0.4% 9.00 3/21/09 70,751 179,296
18,607 0.6% 9.00 9/21/09 105,317 266,893
10,000 0.3% 8.75 11/5/09 55,028 139,452
Robert M. Shapiro....... 47,500 1.5% 9.00 9/21/09 268,852 681,325
- --------
(1) All options are either incentive stock options or nonqualified stock
options and generally vest monthly over four years from the issuance date
at the rate of 2.0833% of the shares per month, except that no shares vest
until the optionee's first anniversary of employment, at which time a
number of shares equal to 2.0833% of the shares multiplied by the number
of months between issuance and the optionee's first anniversary of
employment become vested. Options expire ten years from the date of grant,
subject to earlier termination upon termination of employment.
(2) Based on options to purchase a total of 3,121,231 shares of common stock
granted during 1999.
(3) Options were granted at an exercise price equal to the fair market value
of our common stock on grant date.
(4) Potential realizable values are computed by (a) multiplying the number of
shares of common stock subject to a given option by the market price of
such option on the date of grant, (b) assuming that the aggregate stock
value derived from that calculation compounds at the annual 5% and 10%
rates shown in the table for the entire ten-year term of the option and
(c) subtracting from the result the aggregate option exercise price. The
5% and 10% assumed annual rates of stock price appreciation are mandated
by the rules of the Securities and Exchange Commission and do not
represent our estimate or projection of future common stock prices.
18
Aggregate Option Exercises in 1999 and Values at December 31, 1999
The following table sets forth the number of shares acquired and the value
realized upon exercise of stock options during 1999 and the number of shares
of common stock subject to exercisable and unexercisable stock options held as
of December 31, 1999 by each Named Executive Officer. Also reported are values
of "in-the-money" options, which represent the positive spread between the
respective exercise prices of outstanding stock options and $10.875, the
closing price per share of our common stock on December 31, 1999.
Number of Securities Value of Unexercised
Number of Underlying Unexercised In-The-Money Options
Shares Options at December 31, 1999 at December 31, 1999
Acquired on Value -------------------------------- -------------------------
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- --------------- --------------- ----------- -------------
Dean A. DeBiase......... 745,660 $2,619,721 1,034,816 -- $10,736,216 $ --
Samuel M. Hedgpeth III.. -- -- 24,721 280,266 133,208 588,693
Gordon H. Kass.......... 36,562 279,538 75,938 22,500 572,952 42,188
David L. Greene......... 5,000 48,750 67,764 27,236 568,221 53,516
Robert M. Shapiro....... -- -- 55,468 44,532 550,253 83,498
Payam Zamani............ -- -- -- -- -- --
- --------
(1) "Value Realized" represents the fair market value of the shares of common
stock underlying the option on the date of exercise, less the aggregate
exercise price of the option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the compensation committee of the board has at any
time since our formation been an officer or employee of Autoweb.com. No
executive officer of Autoweb.com serves as a member of the board of directors
or compensation committee of any entity that has one or more executive
officers serving on our board or compensation committee.
REPORT ON EXECUTIVE COMPENSATION
This report on executive compensation is required by the Commission and
shall not be deemed to be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or under the Exchange Act, except to the
extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed soliciting material or filed
under such Acts.
Final decisions regarding executive compensation and stock option grants to
executives are made by the Compensation Committee of the Board (the
"Committee"). The Committee is composed of three independent non-employee
directors, none of whom have any interlocking relationships as defined by the
Commission.
General Compensation Policy.
The Committee acts on behalf of the Board to establish the general
compensation policy of the Company for all employees of the Company. The
Committee typically reviews base salary levels and target bonuses for the
Chief Executive Officer ("CEO"), Chief Operating Officer ("COO") and other
executive officers and employees of the Company during the first quarter of
each year. The Committee administers the Company's incentive and equity plans,
including the Incentive Plan and the 1999 Employee Stock Purchase Plan.
19
The Committee's philosophy in compensating all employees, including the CEO
and COO, is to relate compensation to both corporate and individual
performance. Thus, the Company's general compensation policy, which applies to
all employees of the Company, relates a portion of each individual's total
compensation to the Company-wide management, financial and individual
objectives set forth quarterly and at the beginning of the year. Consistent
with this policy, a designated portion of the compensation of the executive
officers of the Company is contingent on corporate performance and, in the
case of certain executive officers, adjusted based on the individual officer's
performance as measured against personal objectives, as determined by the
Committee in its discretion. Long-term equity incentives for executive
officers are effected through the granting of stock options under the
Incentive Plan. Stock options generally have value for the executive only if
the price of the Company's stock increases above the fair market value on the
grant date and the executive remains in the Company's employ for the period
required for the options to vest.
The base salaries, incentive compensation and stock option grants of the
executive officers are determined in part by the Committee informally
reviewing data on prevailing compensation practices in technology companies
with whom the Company competes for executive talent, and by their evaluating
such information in connection with the Company's corporate goals. In
addition, the Committee occasionally commissions consultants to review current
compensation levels in the context of the market environment. To this end, the
Committee attempts to compare the compensation of the Company's executive
officers with the compensation practices of comparable companies to determine
base salary, target bonuses and target total cash compensation. In addition to
their base salaries, the Company's executive officers, including the CEO and
COO, are each eligible to receive a cash bonus and to participate in the
Incentive Plan and the 1999 Employee Stock Purchase Plan.
1999 Executive Compensation.
Base Compensation. The Committee reviewed individual and company
performance and established a base salary level to be effective January 1,
1999 or, in the case of promotions, at the effective point, for each executive
officer, including the CEO and COO.
Incentive Compensation. During 1999, cash bonuses were paid for 1998 and
the first three quarters of 1999 based on individual and company performance.
For the fourth quarter of 1999, cash bonuses were awarded during 2000 only if
an executive officer achieved predetermined individual performance goals and
the Company met predetermined corporate objectives set by the Committee. In
certain cases, such as for the CEO, cash bonuses were paid exclusively based
on rates stipulated in individual offer letters. During 2000, these objectives
will be set quarterly in accordance with the Incentive Plan implemented during
the fourth quarter of 1999. The CEO's subjective judgment of executives'
performance (other than his own) is taken into account in determining whether
those goals have been satisfied. The target amount of bonus and the actual
amount of bonus are determined by the Committee, in its discretion.
Stock Options. Stock options are an essential element of the Company's
executive compensation package. The Committee believes that equity-based
compensation in the form of stock options links the interests of management
and stockholders by focusing employees and management on increasing
stockholder value. The actual value of such equity-based compensation depends
entirely on appreciation of the Company's stock. Approximately 100% of the
Company's full-time employees participate in the Incentive Plan.
In 1999, stock options were granted to each executive officer except Mr.
DeBiase. Stock options typically have been granted to executive officers when
the executive first joins the Company, in connection with a significant change
in responsibilities and, occasionally, to achieve equity within a peer group.
The Committee may, however, grant additional stock options to executives for
other reasons. The number of shares subject to each stock option granted is
within the discretion of the Committee and is based on anticipated future
contribution and ability to impact corporate and/or business unit results,
past performance or consistency within the executive's peer group. In 1999,
the Committee considered these factors, as well as the number of options held
by such executive officers that remained unvested. In the discretion of the
Committee, executive officers may also be granted stock options to provide
greater incentives to continue their employment with the Company
20
and to strive to increase the value of the Company's common stock. The stock
options generally become exercisable over either a three-year or four-year
period and are granted at a price that is equal to the fair market value of
the Company's common stock on the date of grant.
For 2000, the Committee will be considering whether to grant future options
under the Incentive Plan to executive officers based on the factors described
above, with particular attention to the Company-wide management objectives and
the executive officers' success in obtaining specific individual financial and
operational objectives established or to be established for 2000 and to the
number of options currently held by the executive officers that remain
unvested.
Company Performance, CEO and COO Compensation. Messers. DeBiase and
Hedgpeth were responsible for the Company achieving a significant portion of
its objectives for 1999. These objectives included satisfactorily managing the
Company's overall corporate business plan, such as meeting the Company's
revenue targets and significantly strengthening the Company's market position.
Based upon the criteria set forth under the discussion of Incentive
Compensation above, the Committee awarded Mr. DeBiase incentive compensation
of $100,000. The Committee awarded Mr. Hedgpeth incentive compensation of
$36,000. These figures represent the bonus guaranteed in Mr. DeBiase's offer
letter and 100% of the target bonus for Mr. Hedgpeth. Mr. DeBiase was not
granted any stock options in 1999, after consideration of his prior
outstanding option grants and the number of options that remained
unexercisable, and the number of shares Mr. DeBiase already owns. In 1999, Mr.
Hedgpeth was awarded options to purchase aggregate of 304,987 shares of the
Company's common stock. The Committee reviewed the compensation practices of
the comparable companies in determining the compensation for Messrs. DeBiase
and Hedgpeth.
Compliance with Section 162(m) of the Internal Revenue Code of 1986. The
Company intends to comply with the requirements of Section 162(m) of the Code.
The Incentive Plan is already in compliance with Section 162(m) by limiting
stock awards to named executive officers. The Company does not expect cash
compensation for 2000 to be in excess of $1,000,000 or consequently to be
affected by the requirements of Section 162(m).
COMPENSATION COMMITTEE
Mark N. Diker
Jay C. Hoag
Mark R. Ross
21
COMPANY STOCK PRICE PERFORMANCE
The stock price performance graph below is required by the Commission and
shall not be deemed to be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended, or under the Exchange Act, except to the
extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed soliciting material or filed
under such Acts.
The graph below compares the cumulative total stockholder return on the
common stock of the Company from March 23, 1999 (based on the closing price on
the first day of trading of the Company's stock pursuant to the registration
statement declared effective for the Company's initial public offering) to
December 31, 1999 with the cumulative total return of the Nasdaq Composite and
TheStreet.com e-Commerce Index over the same period (assuming the investment
of $100 in the common stock of the Company and in each of the other indices on
March 23, 1999, and reinvestment of all dividends).
The comparisons in the graph below are based on historical data and are not
intended to forecast the possible future performance of the Company's common
stock.
Comparison of Cumulative Total Return Among
Autoweb.com, Inc., NASDAQ Composite and
TheStreet.com e-Commerce Index
3/23/99 3/31/99 6/30/99 9/30/99 12/31/99
- ------------------------------------------------------------------------------
AUTOWEB.COM $100.00 $ 89.06 $ 37.34 $ 22.34 $ 27.19
- ------------------------------------------------------------------------------
NASDAQ COMPOSITE $100.00 $105.97 $115.64 $118.22 $175.19
- ------------------------------------------------------------------------------
THESTREET.COM E-
COMMERCE INDEX $100.00 $100.00 $ 97.32 $ 79.68 $100.49
- ------------------------------------------------------------------------------
22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From January 1, 1999 to the present, there have been no currently proposed
transactions in which the amount involved exceeds $60,000 to which the Company
or any of its subsidiaries was (or is to be) a party and in which any
executive officer, director, 5% beneficial owner of the Company's common stock
or member of the immediate family of any of the foregoing persons had (or will
have) a direct or indirect material interest, except for compensatory payments
disclosed where required under "Proposal No. 1--Election of Directors--
Director Compensation" and "Executive Compensation" above and the transactions
described below.
Officer Loans. In January 1999, Dean DeBiase, our Chairman and Chief
Executive Officer, borrowed an aggregate of $921,982 from us pursuant to three
full-recourse, three-year, interest free promissory notes in the amounts of
$100,000, $686,396 and $135,586 in connection with the exercise of his options
to purchase 199,999 shares of common stock and 395,661 shares of our Series D
Preferred Stock. The $100,000 note is secured by the 199,999 shares of common
stock purchased and the $636,396 and $135,586 promissory notes are each
secured by the 395,661 shares of common stock into which the purchased Series
D Preferred Stock automatically converted at the time of our initial public
offering. As of April 12, 2000, the full $921,982 continued to remain
outstanding.
Lycos, Inc. Agreement. In March 2000, the Company and Lycos, Inc. entered
into a four year agreement under which a co-branded version of the Autoweb Web
site would be accessable across Lycos' network and all its Web properties.
Major elements of the Agreement include regularly scheduled payments to Lycos
for impressions, integration, and exclusivity. The Agreement calls for a split
of net advertising revenue on the co-branded site that is tiered by the amount
of gross revenue and varies from year to the year. Autoweb will also receive a
percentage of revenue from the placement of advertising on the Lycos Network
in areas and on properties other than the co-branded site for customers that
Autoweb may refer to Lycos. Lycos will share in a fixed amount of revenue per
transaction from those transactions on the co-branded site, if any, above a
minimum threshold dollar amount in total. In April 2000, in connection with
the agreement, Lycos acquired 3,035,025 shares of the Company's common stock
for $21,846,110.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Company's 2001
annual meeting of stockholders must be received by the Company at its
principal executive offices no later than January 12, 2001 in order to be
included in the Company's Proxy Statement and form of proxy relating to that
meeting. Stockholders wishing to bring a proposal before the 2001 annual
meeting of stockholders (but not include it in our proxy materials) must
provide written notice of the proposal to the Secretary of Autoweb.com at our
principal executive offices between March 9, 2001 and April 8, 2001. In
addition, stockholders must comply with the procedural requirements in our
Bylaws. Stockholders can obtain a copy of our Bylaws from us. The Bylaws are
also on file with the Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16 of the Exchange Act requires the Company's directors and
officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file initial reports of ownership and reports
of changes in ownership with the Commission. Such persons are required by
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors
of the Company, the Company believes that all Section 16(a) filing
requirements were met during 1999, except that one Form 3, reporting one
transaction, for Gordon Kass was filed late, one Form 3, reporting one
transaction, for Mark Ross was filed late, one Form 3, reporting one
transaction, for Jeffrey Schwartz was filed late and one Form 3, reporting six
transactions, for Thomas Stone was filed late.
23
OTHER BUSINESS
The Board does not intend to bring any other business before the Annual
Meeting, and, so far as is known to the Board, no matters are to be brought
before the Annual Meeting except as specified in the notice of the Annual
Meeting. As to any business that may properly come before the Annual Meeting,
however, it is intended that proxies, in the form enclosed, will be voted in
respect thereof in accordance with the judgment of the persons voting such
proxies.
Dated: May 12, 2000
By Order of the Board of Directors
Samuel M. Hedgpeth III
President and Chief Operating
Officer
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE,
SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED AT THE ANNUAL MEETING.
24
AUTOWEB.COM, INC.
1999 EQUITY INCENTIVE PLAN
As Adopted January 21, 1999,
and Amended April 27, 2000
1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company's future
performance through awards of Options, Restricted Stock and Stock Bonuses.
Capitalized terms not defined in the text are defined in Section 23.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the
total number of Shares reserved and available for grant and issuance pursuant
to this Plan will be 5,150,000 Shares plus (a) Shares that are subject to: (i)
issuance upon exercise of an Option but cease to be subject to such Option for
any reason other than exercise of such Option; (ii) an Award granted hereunder
but are forfeited or are repurchased by the Company at the original issue
price; and (iii) an Award that otherwise terminates without Shares being
issued; and (b) any authorized shares not issued or subject to outstanding
grants under the Company's 1997 Stock Option Plan (the "Prior Plan") on the
Effective Date (as defined below) and any shares issued under the Prior Plan
that are forfeited or repurchased by the Company or that are issuable upon
exercise of options granted pursuant to the Prior Plan that expire or become
unexercisable for any reason without having been exercised in full, which
shares will no longer be available for grant and issuance under the Prior
Plan, but will be available for grant and issuance under this Plan. At all
times the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan and all other outstanding but unvested Awards
granted under this Plan.
2.2 Adjustment of Shares. In the event that the number of outstanding
shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration, then (a) the
number of Shares reserved for issuance under this Plan, (b) the Exercise
Prices of and number of Shares subject to outstanding Options, and (c) the
number of Shares subject to other outstanding Awards will be proportionately
adjusted, subject to any required action by the Board or the stockholders of
the Company and compliance with applicable securities laws; provided, however,
that fractions of a Share will not be issued but will either be replaced by a
cash payment equal to the Fair Market Value of such fraction of a Share or
will be rounded up to the nearest whole Share, as determined by the Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent
contractors and advisors of the Company or any Parent or Subsidiary of the
Company; provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a capital-
raising transaction. No person will be eligible to receive more than 1,000,000
Shares in any calendar year under this Plan pursuant to the grant of Awards
hereunder, other than new employees of the Company or of a Parent or
Subsidiary of the Company (including new employees who are also officers and
directors of the Company or any Parent or Subsidiary of the Company), who are
eligible to receive up to a maximum of 2,000,000 Shares in the calendar year
in which they commence their employment. A person may be granted more than one
Award under this Plan.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the
Board, the Committee will have full power to implement and carry out this
Plan. Without limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination with,
in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency
in this Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned; and
(k) make all other determinations necessary or advisable for the
administration of this Plan.
4.2 Committee Discretion. Any determination made by the Committee with
respect to any Award will be made in its sole discretion at the time of grant
of the Award or, unless in contravention of any express term of this Plan or
Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this
Plan. The Committee may delegate to one or more officers of the Company the
authority to grant an Award under this Plan to Participants who are not
Insiders of the Company.
5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISO") or Nonqualified Stock Options ("NQSOs"), the
number of Shares subject to the Option, the Exercise Price of the Option, the
period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO ("Stock Option Agreement"), and will be in such form and
contain such provisions (which need not be the same for each Participant) as
the Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3 Exercise Period. Options may be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or
by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary of
the Company ("Ten Percent Stockholder") will be exercisable after the
expiration of five (5) years from the date
-2-
the ISO is granted. The Committee also may provide for Options to become
exercisable at one time or from time to time, periodically or otherwise, in
such number of Shares or percentage of Shares as the Committee determines.
5.4 Exercise Price. The Exercise Price of an Option will be determined
by the Committee when the Option is granted and may be not less than 85% of
the Fair Market Value of the Shares on the date of grant; provided that: (i)
the Exercise Price of an ISO will be not less than 100% of the Fair Market
Value of the Shares on the date of grant; and (ii) the Exercise Price of any
ISO granted to a Ten Percent Stockholder will not be less than 110% of the
Fair Market Value of the Shares on the date of grant. Payment for the Shares
purchased may be made in accordance with Section 8 of this Plan.
5.5 Method of Exercise. Options may be exercised only by delivery to
the Company of a written stock option exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same
for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's
investment intent and access to information and other matters, if any, as may
be required or desirable by the Company to comply with applicable securities
laws, together with payment in full of the Exercise Price for the number of
Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a) If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant's
Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than three (3) months
after the Termination Date (or such shorter or longer time period not
exceeding five (5) years as may be determined by the Committee, with
any exercise beyond three (3) months after the Termination Date deemed
to be an NQSO), but in any event, no later than the expiration date of
the Options.
(b) If the Participant is Terminated because of Participant's death or
Disability (or the Participant dies within three (3) months after a
Termination other than for Cause or because of Participant's
Disability), then Participant's Options may be exercised only to the
extent that such Options would have been exercisable by Participant on
the Termination Date and must be exercised by Participant (or
Participant's legal representative or authorized assignee) no later
than twelve (12) months after the Termination Date (or such shorter or
longer time period not exceeding five (5) years as may be determined by
the Committee, with any such exercise beyond (a) three (3) months after
the Termination Date when the Termination is for any reason other than
the Participant's death or Disability, or (b) twelve (12) months after
the Termination Date when the Termination is for Participant's
Disability, deemed to be an NQSO), but in any event no later than the
expiration date of the Options.
(c) Notwithstanding the provisions in paragraph 5.6(a) above, if a
Participant is terminated for Cause, neither the Participant, the
Participant's estate nor such other person who may then hold the Option
shall be entitled to exercise any Option with respect to any Shares
whatsoever, after termination of service, whether or not after
termination of service the Participant may receive payment from the
Company or Subsidiary for vacation pay, for services rendered prior to
termination, for services rendered for the day on which termination
occurs, for salary in lieu of notice, or for any other benefits. In
making such determination, the Board shall give the Participant an
opportunity to present to the Board evidence on his behalf. For the
purpose of this paragraph, termination of service shall be deemed to
occur on the date when the Company dispatches notice or advice to the
Participant that his service is terminated.
5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.
-3-
5.8 Limitations on ISO. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISO are exercisable for
the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company, Parent or
Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISO are exercisable for
the first time by a Participant during any calendar year exceeds $100,000,
then the Options for the first $100,000 worth of Shares to become exercisable
in such calendar year will be ISO and the Options for the amount in excess of
$100,000 that become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are amended
after the Effective Date of this Plan to provide for a different limit on the
Fair Market Value of Shares permitted to be subject to ISO, such different
limit will be automatically incorporated herein and will apply to any Options
granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights
under any Option previously granted. Any outstanding ISO that is modified,
extended, renewed or otherwise altered will be treated in accordance with
Section 424(h) of the Code. The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of
this Plan for Options granted on the date the action is taken to reduce the
Exercise Price.
5.10 No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to
sell to an eligible person Shares that are subject to restrictions. The
Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the price to be paid (the "Purchase Price"), the
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a Restricted
Stock Award made pursuant to this Plan will be evidenced by an Award Agreement
("Restricted Stock Purchase Agreement") that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of
this Plan. The offer of Restricted Stock will be accepted by the Participant's
execution and delivery of the Restricted Stock Purchase Agreement and full
payment for the Shares to the Company within thirty (30) days from the date
the Restricted Stock Purchase Agreement is delivered to the person. If such
person does not execute and deliver the Restricted Stock Purchase Agreement
along with full payment for the Shares to the Company within thirty (30) days,
then the offer will terminate, unless otherwise determined by the Committee.
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a
Restricted Stock Award will be determined by the Committee on the date the
Restricted Stock Award is granted, except in the case of a sale to a Ten
Percent Stockholder, in which case the Purchase Price will be 100% of the Fair
Market Value. Payment of the Purchase Price may be made in accordance with
Section 8 of this Plan.
6.3 Terms of Restricted Stock Awards. Restricted Stock Awards shall be
subject to such restrictions as the Committee may impose. These restrictions
may be based upon completion of a specified number of years of service with
the Company or upon completion of the performance goals as set out in advance
in the Participant's individual Restricted Stock Purchase Agreement.
Restricted Stock Awards may vary from Participant to Participant and between
groups of Participants. Prior to the grant of a Restricted Stock Award, the
Committee shall: (a) determine the nature, length and starting date of any
Performance Period for the Restricted
-4-
Stock Award; (b) select from among the Performance Factors to be used to
measure performance goals, if any; and (c) determine the number of Shares that
may be awarded to the Participant. Prior to the payment of any Restricted
Stock Award, the Committee shall determine the extent to which such Restricted
Stock Award has been earned. Performance Periods may overlap and Participants
may participate simultaneously with respect to Restricted Stock Awards that
are subject to different Performance Periods and having different performance
goals and other criteria.
6.4 Termination During Performance Period. If a Participant is
Terminated during a Performance Period for any reason, then such Participant
will be entitled to payment (whether in Shares, cash or otherwise) with
respect to the Restricted Stock Award only to the extent earned as of the date
of Termination in accordance with the Restricted Stock Purchase Agreement,
unless the Committee will determine otherwise.
7. STOCK BONUSES.
7.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which
may consist of Restricted Stock) for services rendered to the Company or any
Parent or Subsidiary of the Company. A Stock Bonus may be awarded for past
services already rendered to the Company, or any Parent or Subsidiary of the
Company pursuant to an Award Agreement (the "Stock Bonus Agreement") that will
be in such form (which need not be the same for each Participant) as the
Committee will from time to time approve, and will comply with and be subject
to the terms and conditions of this Plan. A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant's individual Award Agreement (the "Performance Stock Bonus
Agreement") that will be in such form (which need not be the same for each
Participant) as the Committee will from time to time approve, and will comply
with and be subject to the terms and conditions of this Plan. Stock Bonuses
may vary from Participant to Participant and between groups of Participants,
and may be based upon the achievement of the Company, Parent or Subsidiary
and/or individual performance factors or upon such other criteria as the
Committee may determine.
7.2 Terms of Stock Bonuses. The Committee will determine the number of
Shares to be awarded to the Participant. If the Stock Bonus is being earned
upon the satisfaction of performance goals pursuant to a Performance Stock
Bonus Agreement, then the Committee will: (a) determine the nature, length and
starting date of any Performance Period for each Stock Bonus; (b) select from
among the Performance Factors to be used to measure the performance, if any;
and (c) determine the number of Shares that may be awarded to the Participant.
Prior to the payment of any Stock Bonus, the Committee shall determine the
extent to which such Stock Bonuses have been earned. Performance Periods may
overlap and Participants may participate simultaneously with respect to Stock
Bonuses that are subject to different Performance Periods and different
performance goals and other criteria. The number of Shares may be fixed or may
vary in accordance with such performance goals and criteria as may be
determined by the Committee. The Committee may adjust the performance goals
applicable to the Stock Bonuses to take into account changes in law and
accounting or tax rules and to make such adjustments as the Committee deems
necessary or appropriate to reflect the impact of extraordinary or unusual
items, events or circumstances to avoid windfalls or hardships.
7.3 Form of Payment. The earned portion of a Stock Bonus may be paid
currently or on a deferred basis with such interest or dividend equivalent, if
any, as the Committee may determine. Payment may be made in the form of cash
or whole Shares or a combination thereof, either in a lump sum payment or in
installments, all as the Committee will determine.
8. PAYMENT FOR SHARE PURCHASES.
8.1 Payment. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by
the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by Participant
for more than six (6) months and have been paid for within the meaning
of SEC Rule 144 (and, if such shares were purchased from
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the Company by use of a promissory note, such note has been fully paid
with respect to such shares); or (2) were obtained by Participant in the
public market;
(c) by tender of a full recourse promissory note having such terms as may
be approved by the Committee and bearing interest at a rate sufficient
to avoid imputation of income under Sections 483 and 1274 of the Code;
provided, however, that Participants who are not employees or directors
of the Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by collateral
other than the Shares;
(d) by waiver of compensation due or accrued to the Participant for
services rendered;
(e) with respect only to purchases upon exercise of an Option, and provided
that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD Dealer") whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of
the Shares so purchased to pay for the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or
(2) through a "margin" commitment from the Participant and a NASD Dealer
whereby the Participant irrevocably elects to exercise the Option
and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly
to the Company; or
(f) by any combination of the foregoing.
8.2 Loan Guarantees. The Committee may help the Participant pay for
Shares purchased under this Plan by authorizing a guarantee by the Company of
a third-party loan to the Participant.
9. WITHHOLDING TAXES.
9.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan,
payments in satisfaction of Awards are to be made in cash, such payment will
be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
9.2 Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be
issued that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined. All elections by a Participant to have
Shares withheld for this purpose will be made in accordance with the
requirements established by the Committee and be in writing in a form
acceptable to the Committee
10. PRIVILEGES OF STOCK OWNERSHIP.
10.1 Voting and Dividends. No Participant will have any of the rights of
a stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will
be a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant
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may become entitled to receive with respect to such Shares by virtue of a
stock dividend, stock split or any other change in the corporate or capital
structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided, further, that the Participant will have no right
to retain such stock dividends or stock distributions with respect to Shares
that are repurchased at the Participant's Purchase Price or Exercise Price
pursuant to Section 12.
10.2 Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services
in connection with the Company assure them access to equivalent information.
11. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by
will or by the laws of descent and distribution or as determined by the
Committee and set forth in the Award Agreement with respect to Awards that are
not ISOs. During the lifetime of the Participant an Award will be exercisable
only by the Participant, and any elections with respect to an Award may be
made only by the Participant unless otherwise determined by the Committee and
set forth in the Award Agreement with respect to Awards that are not ISOs.
12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company
may reserve to itself and/or its assignee(s) in the Award Agreement a right to
repurchase a portion of or all Unvested Shares held by a Participant following
such Participant's Termination at any time within ninety (90) days after the
later of Participant's Termination Date and the date Participant purchases
Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant's Exercise Price or Purchase Price, as the
case may be.
13. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and
other restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.
14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee
may cause a legend or legends referencing such restrictions to be placed on
the certificates. Any Participant who is permitted to execute a promissory
note as partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or part of
the Shares so purchased as collateral to secure the payment of Participant's
obligation to the Company under the promissory note; provided, however, that
the Committee may require or accept other or additional forms of collateral to
secure the payment of such obligation and, in any event, the Company will have
full recourse against the Participant under the promissory note
notwithstanding any pledge of the Participant's Shares or other collateral. In
connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note
may be released from the pledge on a pro rata basis as the promissory note is
paid.
15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time
buy from a Participant an Award previously granted with payment in cash,
Shares (including Restricted Stock) or other consideration, based on such
terms and conditions as the Committee and the Participant may agree.
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16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which
the Shares may then be listed or quoted, as they are in effect on the date of
grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver certificates for Shares under this Plan prior
to: (a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company will be under no obligation to register
the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any
right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent or Subsidiary of the Company or limit in any
way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant's employment or other relationship at any time, with or
without cause.
18. CORPORATE TRANSACTIONS.
18.1 Assumption or Replacement of Awards by Successor. In the event of
(a) a dissolution or liquidation of the Company, (b) a merger or consolidation
in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company immediately prior to such
merger (other than any stockholder that merges, or which owns or controls
another corporation that merges, with the Company in such merger) cease to own
their shares or other equity interest in the Company, (d) the sale of
substantially all of the assets of the Company, or (e) the acquisition, sale,
or transfer of more than 50% of the outstanding shares of the Company by
tender offer or similar transaction, any or all outstanding Awards may be
assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In
the alternative, the successor corporation may substitute equivalent Awards or
provide substantially similar consideration to Participants as was provided to
stockholders (after taking into account the existing provisions of the
Awards). The successor corporation may also issue, in place of outstanding
Shares of the Company held by the Participant, substantially similar shares or
other property subject to repurchase restrictions no less favorable to the
Participant. In the event such successor corporation (if any) refuses to
assume or substitute Awards, as provided above, pursuant to a transaction
described in this Subsection 18.1, such Awards will expire on such transaction
at such time and on such conditions as the Committee will determine.
Notwithstanding anything in this Plan to the contrary, the Committee may, in
its sole discretion, provide that the vesting of any or all Awards granted
pursuant to this Plan will accelerate upon a transaction described in this
Section 18. If the Committee exercises such discretion with respect to
Options, such Options will become exercisable in full prior to the
consummation of such event at such time and on such conditions as the
Committee determines, and if such Options are not exercised prior to the
consummation of the corporate transaction, they shall terminate at such time
as determined by the Committee.
18.2 Other Treatment of Awards. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 18, in the
event of the occurrence of any transaction described in Section 18.1, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, or sale of assets.
-8-
18.3 Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution of
such other company's award; or (b) assuming such award as if it had been
granted under this Plan if the terms of such assumed award could be applied to
an Award granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed award would have been
eligible to be granted an Award under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the Company assumes
an award granted by another company, the terms and conditions of such award
will remain unchanged (except that the exercise price and the number and
nature of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing option,
such new Option may be granted with a similarly adjusted Exercise Price.
19. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on
the date on which the registration statement filed by the Company with the SEC
under the Securities Act registering the initial public offering of the
Company's Common Stock is declared effective by the SEC (the "Effective
Date"). This Plan shall be approved by the stockholders of the Company
(excluding Shares issued pursuant to this Plan), consistent with applicable
laws, within twelve (12) months before or after the date this Plan is adopted
by the Board. Upon the Effective Date, the Committee may grant Awards pursuant
to this Plan; provided, however, that: (a) no Option may be exercised prior to
initial stockholder approval of this Plan; (b) no Option granted pursuant to
an increase in the number of Shares subject to this Plan approved by the Board
will be exercised prior to the time such increase has been approved by the
stockholders of the Company; (c) in the event that initial stockholder
approval is not obtained within the time period provided herein, all Awards
granted hereunder shall be cancelled, any Shares issued pursuant to any Awards
shall be cancelled and any purchase of Shares issued hereunder shall be
rescinded; and (d) in the event that stockholder approval of such increase is
not obtained within the time period provided herein, all Awards granted
pursuant to such increase will be cancelled, any Shares issued pursuant to any
Award granted pursuant to such increase will be cancelled, and any purchase of
Shares pursuant to such increase will be rescinded.
20. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of stockholder approval. This
Plan and all agreements thereunder shall be governed by and construed in
accordance with the laws of the State of California.
21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend this Plan in any respect, including without limitation amendment of
any form of Award Agreement or instrument to be executed pursuant to this
Plan; provided, however, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval.
22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
23. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:
"Award" means any award under this Plan, including any Option,
Restricted Stock or Stock Bonus.
"Award Agreement" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"Board" means the Board of Directors of the Company.
"Cause" means the commission of an act of theft, embezzlement, fraud,
dishonesty or a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Compensation Committee of the Board.
"Company" means Autoweb.com, Inc. or any successor corporation.
"Disability" means a disability, whether temporary or permanent,
partial or total, as determined by the Committee. For ISO purposes,
"Disability" means a disability within the meaning of Code Section 22(e)(3).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Price" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"Fair Market Value" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market, its
closing price on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal;
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of
determination on the principal national securities exchange on which
the Common Stock is listed or admitted to trading as reported in The
Wall Street Journal;
(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on
the date of determination as reported in The Wall Street Journal;
(d) in the case of an Award made on the Effective Date, the price per share
at which shares of the Company's Common Stock are initially offered for
sale to the public by the Company's underwriters in the initial public
offering of the Company's Common Stock pursuant to a registration
statement filed with the SEC under the Securities Act; or
(d) if none of the foregoing is applicable, by the Committee in good faith.
"Insider" means an officer or director of the Company or any other
person whose transactions in the Company's Common Stock are subject to Section
16 of the Exchange Act.
"Option" means an award of an option to purchase Shares pursuant to
Section 5.
"Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations
other than the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
"Participant" means a person who receives an Award under this Plan.
"Performance Factors" means the factors selected by the Committee from
among the following measures to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:
(a) Net revenue and/or net revenue growth;
(b) Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;
(c) Operating income and/or operating income growth;
(d) Net income and/or net income growth;
(e) Earnings per share and/or earnings per share growth;
(f) Total stockholder return and/or total stockholder return growth;
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(g) Return on equity;
(h) Operating cash flow return on income;
(i) Adjusted operating cash flow return on income;
(j) Economic value added; and
(k) Individual confidential business objectives.
"Performance Period" means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for Restricted Stock Awards or Stock Bonuses.
"Plan" means this Autoweb.com, Inc. 1999 Equity Incentive Plan, as
amended from time to time.
"Restricted Stock Award" means an award of Shares pursuant to Section 6.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Company's Common Stock reserved for
issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and any
successor security.
"Stock Bonus" means an award of Shares, or cash in lieu of Shares,
pursuant to Section 7.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
"Termination" or "Terminated" means, for purposes of this Plan with
respect to a Participant, that the Participant has for any reason ceased to
provide services as an employee, officer, director, consultant, independent
contractor, or advisor to the Company or a Parent or Subsidiary of the
Company. An employee will not be deemed to have ceased to provide services in
the case of (i) sick leave, (ii) military leave, or (iii) any other leave of
absence approved by the Committee, provided, that such leave is for a period
of not more than 90 days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute or unless provided otherwise
pursuant to formal policy adopted from time to time by the Company and issued
and promulgated to employees in writing. In the case of any employee on an
approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the
Company or a Subsidiary as it may deem appropriate, except that in no event
may an Option be exercised after the expiration of the term set forth in the
Option agreement. The Committee will have sole discretion to determine whether
a Participant has ceased to provide services and the effective date on which
the Participant ceased to provide services (the "Termination Date").
"Unvested Shares" means "Unvested Shares" as defined in the Award
Agreement.
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No.
AUTOWEB.COM, INC.
1999 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is made and entered into as
of the Date of Grant set forth below (the "Date of Grant") by and between
Autoweb.com, Inc., a Delaware corporation (the "Company"), and the Optionee
named below ("Optionee"). Capitalized terms not defined herein shall have the
meanings ascribed to them in the Company's 1999 Equity Incentive Plan (the
"Plan").
Optionee:
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Social Security Number:
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Optionee's Address:
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Total Option Shares:
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Exercise Price Per Share:
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Date of Grant:
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First Vesting Date:
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Expiration Date:
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(unless earlier terminated under Section 3 hereof)
Type of Stock Option
(Check one): [ ] Incentive Stock Option
[ ] Nonqualified Stock Option
1. Grant of Option. The Company hereby grants to Optionee an option (this
"Option") to purchase up to the total number of shares of Common Stock of the
Company set forth above as Total Option Shares (collectively, the "Shares") at
the Exercise Price Per Share set forth above (the "Exercise Price"), subject
to all of the terms and conditions of this Agreement and the Plan. If
designated as an Incentive Stock Option above, this Option is intended to
qualify as an "incentive stock option" ("ISO") within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), to the
extent permitted under Code Section 422.
2. Vesting; Exercise Period.
2.1 Vesting of Shares. This Option shall be exercisable as it vests.
Subject to the terms and conditions of the Plan and this Agreement, this
Option shall vest and become exercisable as follows: (a) this Option shall not
vest nor be exercisable with respect to any of the Shares until the First
Vesting Date set forth on page 1 of this Agreement; (b) if Optionee has
continuously provided services to the Company or any Parent or Subsidiary of
the Company, then on the First Vesting Date, this Option shall vest and become
exercisable as to such number of shares equal to the product of (i) 2.08333%
of the Shares multiplied by (ii) the number of months from the Date of Grant
to the First Vesting Date; and (c) thereafter this Option shall vest and
become exercisable as to an additional 2.08333% of the Shares on each monthly
anniversary of the First Vesting Date until this Option is vested and
exercisable with respect to 100% of the Shares, provided that Optionee has
continuously provided services to the Company, or any Parent or Subsidiary of
the Company at all times during the relevant month. This Option shall cease to
vest upon Optionee's Termination and Optionee shall in no event be entitled
under this Option to purchase a number of shares of the Company's Common Stock
greater than the "Total Option Shares."
2.2 Vesting of Options. Shares that are vested pursuant to the schedule
set forth in Section 2.1 hereof are "Vested Shares." Shares that are not
vested pursuant to the schedule set forth in Section 2.1 hereof are "Unvested
Shares."
2.3 Expiration. This Option shall expire on the Expiration Date set
forth above and must be exercised, if at all, on or before the earlier of the
Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3 hereof.
3. Termination.
3.1 Termination for Any Reason Except Death, Disability or Cause. If
Optionee is Terminated for any reason except Optionee's death, Disability or
Cause, then this Option, to the extent (and only to the extent) that it is
vested in accordance with the schedule set forth in Section 2.1 hereof on the
Termination Date, may be exercised by Optionee no later than three (3) months
after the Termination Date, but in any event no later than the Expiration
Date.
3.2 Termination Because of Death or Disability. If Optionee is
Terminated because of death or Disability of Optionee (or the Optionee dies
within three (3) months after Termination other than for Cause or because of
Disability), then this Option, to the extent that it is vested in accordance
with the schedule set forth in Section 2.1 hereof on the Termination Date, may
be exercised by Optionee (or Optionee's legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date, but in
any event no later than the Expiration Date. Any exercise after three months
after the Termination Date when the Termination is for any reason other than
Optionee's death or disability, within the meaning of Code Section 22(e)(3),
shall be deemed to be the exercise of a nonqualified stock option.
3.3 Termination for Cause. If Optionee is Terminated for Cause, this
Option will expire on the Optionee's date of Termination.
3.4 No Obligation to Employ. Nothing in the Plan or this Agreement
shall confer on Optionee any right to continue in the employ of, or other
relationship with, the Company or any Parent or Subsidiary of the Company, or
limit in any way the right of the Company or any Parent or Subsidiary of the
Company to terminate Optionee's employment or other relationship at any time,
with or without Cause.
4. Manner of Exercise.
4.1 Stock Option Exercise Agreement. To exercise this Option, Optionee
(or in the case of exercise after Optionee's death, Optionee's executor,
administrator, heir or legatee, as the case may be) must deliver to the
Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Company
from time to time (the "Exercise Agreement"), which shall set forth, inter
alia, Optionee's election to exercise this Option, the number of shares being
purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Optionee's investment intent and access to
information as may be required by the Company to comply with applicable
securities laws. If someone other than Optionee exercises this Option, then
such person must submit documentation reasonably acceptable to the Company
that such person has the right to exercise this Option.
4.2 Limitations on Exercise. This Option may not be exercised unless
such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. This Option
may not be exercised as to fewer than 100 Shares unless it is exercised as to
all Shares as to which this Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by full
payment of the Exercise Price for the Shares being purchased in cash (by
check), or where permitted by law:
(a) by cancellation of indebtedness of the Company to the Optionee;
2
(b) by surrender of shares of the Company's Common Stock that either: (1)
have been owned by Optionee for more than six (6) months and have been
paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has
been fully paid with respect to such shares); or (2) were obtained by
Optionee in the open public market; and (3) are clear of all liens,
claims, encumbrances or security interests;
(c) by waiver of compensation due or accrued to Optionee for services
rendered;
(d) provided that a public market for the Company's stock exists: (1)
through a "same day sale" commitment from Optionee and a broker-dealer
that is a member of the National Association of Securities Dealers (an
"NASD Dealer") whereby Optionee irrevocably elects to exercise this
Option and to sell a portion of the Shares so purchased to pay for the
Exercise Price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly to the
Company; or (2) through a "margin" commitment from Optionee and an NASD
Dealer whereby Optionee irrevocably elects to exercise this Option and
to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to
the Company;
(f) by any other form of consideration as approved by the Committee; or
(g) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise
of this Option, Optionee must pay or provide for any applicable federal or
state withholding obligations of the Company. If the Committee permits,
Optionee may provide for payment of withholding taxes upon exercise of this
Option by requesting that the Company retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case,
the Company shall issue the net number of Shares to the Optionee by deducting
the Shares retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement and
payment are in form and substance satisfactory to counsel for the Company, the
Company shall issue the Shares registered in the name of Optionee, Optionee's
authorized assignee, or Optionee's legal representative, and shall deliver
certificates representing the Shares with the appropriate legends affixed
thereto.
5. Notice of Disqualifying Disposition of ISO Shares. To the extent this
Option is an ISO, if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (a) the date two (2)
years after the Date of Grant, and (b) the date one (1) year after transfer of
such Shares to Optionee upon exercise of this Option, then Optionee shall
immediately notify the Company in writing of such disposition.
6. Compliance with Laws and Regulations. The exercise of this Option and
the issuance and transfer of Shares shall be subject to compliance by the
Company and Optionee with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer. Optionee understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission
or any stock exchange to effect such compliance.
7. Nontransferability of Option. This Option may not be transferred in any
manner other than by will or by the laws of descent and distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of
this Option shall be binding upon the executors, administrators, successors
and assigns of Optionee.
8. Tax Consequences. Set forth below is a brief summary as of the date the
Board adopted the Plan of some of the federal tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
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8.1 Exercise of Incentive Stock Option. To the extent this Option
qualifies as an ISO, there will be no regular federal income tax liability
upon the exercise of this Option, although the excess, if any, of the fair
market value of the Shares on the date of exercise over the Exercise Price
will be treated as a tax preference item for federal income tax purposes and
may subject the Optionee to the alternative minimum tax in the year of
exercise.
8.2 Exercise of Nonqualified Stock Option. To the extent this Option
does not qualify as an ISO, there may be a regular federal income tax
liability upon the exercise of this Option. Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to
the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. The Company may be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
8.3 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
a. Incentive Stock Options. If the Shares are held for more than
twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of an ISO and are disposed of more than two (2) years after the
Date of Grant, any gain realized on disposition of the Shares will be treated
as capital gain for federal income tax purposes. If Shares purchased under an
ISO are disposed of within the applicable one (1) year or two (2) year period,
any gain realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the excess, if any, of the
fair market value of the Shares on the date of exercise over the Exercise
Price.
b. Nonqualified Stock Options. If the Shares are held for more than
twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of an NQSO, any gain realized on disposition of the Shares will
be treated as long-term capital gain.
c. Withholding. The Company may be required to withhold from
Participant's compensation or collect from the Participant and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income.
9. Privileges of Stock Ownership. Optionee shall not have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to
Optionee.
10. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Optionee.
11. Entire Agreement. The Plan is incorporated herein by reference. This
Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with
respect to such subject matter.
12. Notices. Any notice required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal
delivery; three (3) days after deposit in the United States mail by certified
or registered mail (return receipt requested); one (1) business day after
deposit with any return receipt express courier (prepaid); or one (1) business
day after transmission by facsimile.
13. Successors and Assigns. The Company may assign any of its rights under
this Agreement. This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Company. Subject
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to the restrictions on transfer set forth herein, this Agreement shall be
binding upon Optionee and Optionee's heirs, executors, administrators, legal
representatives, successors and assigns.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without regard
to that body of law pertaining to choice of law or conflict of law.
15. Acceptance. Optionee hereby acknowledges receipt of a copy of the Plan
and this Agreement. Optionee has read and understands the terms and provisions
thereof, and accepts this Option subject to all the terms and conditions of
the Plan and this Agreement. Optionee acknowledges that there may be adverse
tax consequences upon exercise of this Option or disposition of the Shares and
that the Company has advised Optionee to consult a tax advisor prior to such
exercise or disposition.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in
duplicate by its duly authorized representative and Optionee has executed this
Agreement in duplicate as of the Date of Grant.
AUTOWEB.COM, INC. OPTIONEE
By: ______________________________________
------------------------------------------
(Signature)
- ------------------------------------------ ------------------------------------------
(Please print name) (Please print name)
- ------------------------------------------
(Please print title)
6
EXHIBIT A
STOCK OPTION EXERCISE AGREEMENT
Succeeding Grant
Exhibit A
AUTOWEB.COM, INC.
1999 EQUITY INCENTIVE PLAN (the "Plan")
STOCK OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of
AUTOWEB.COM, INC. (the "Company") as set forth below:
Optionee _________________________________ Number of Shares Purchased: ______________
Social Security Number: __________________ Purchase Price per Share: ________________
Address: _________________________________ Aggregate Purchase Price: ________________
_________________________________ Date of Option Agreement: ________________
_________________________________
Type of Option: [ ] Incentive Stock Option
Exact Name of Title to Shares: ___________
[ ] Nonqualified Stock
Option
------------------------------------------
1. Delivery of Purchase Price. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):
[ ] in cash (by check) in the amount of $ , receipt of
which is acknowledged by the Company;
[ ] by cancellation of indebtedness of the Company to Optionee in the amount
of $ ;
[ ] by delivery of fully-paid, nonassessable
and vested shares of the Common Stock of the Company owned by Optionee
for at least six (6) months prior to the date hereof (and which have been
paid for within the meaning of SEC Rule 144), or obtained by Optionee in
the open public market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current Fair Market
Value of $ per share;
[ ] by the waiver hereby of compensation due or accrued to Optionee for
services rendered in the amount of $ ;
[ ] through a "same-day-sale" commitment, delivered herewith, from Optionee
and the NASD Dealer named therein, in the amount of
$ ; or
[ ] through a "margin" commitment, delivered herewith from Optionee and the
NASD Dealer named therein, in the amount of
$ .
2. Market Standoff Agreement. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not
to sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by Optionee during the period requested by the
managing underwriter following the effective date of a registration statement
of the Company filed under the Securities Act, provided that all officers and
directors of the Company are required to enter into similar agreements. Such
agreement shall be in writing in a form satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions with respect to
the shares (or other securities) subject to the foregoing restriction until
the end of such period.
3. Tax Consequences. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
4. Entire Agreement. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement
constitute the entire agreement and understanding of the parties and supersede
in their entirety all prior understandings and agreements of the Company and
Optionee with respect to the subject matter hereof, and are governed by
California law except for that body of law pertaining to choice of law or
conflict of law.
Date: ____________________________________
---------------------
Signature of Optionee
Spousal Consent
I acknowledge that I have read the foregoing Stock Option Exercise
Agreement (the "Agreement") and that I know its contents. I hereby consent to
and approve all of the provisions of the Agreement, and agree that the shares
of the Common Stock of Autoweb.com, Inc. purchased thereunder (the "Shares")
and any interest I may have in such Shares are subject to all the provisions
of the Agreement. I will take no action at any time to hinder operation of the
Agreement on these Shares or any interest I may have in or to them.
Date:
---------------------------------
Signature of Optionee's Spouse
---------------------------------
Spouse's Name--Typed or Printed
---------------------------------
Optionee's Name--Typed or Printed
PROXY
AUTOWEB.COM, INC.
3270 Jay Street
Santa Clara, California 95054
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dean A. DeBiase and Samuel M. Hedgpeth III,
and each of them, as proxies, each with full powers of substitution, and hereby
authorizes them to represent and to vote, as designated below, all shares of
Common Stock, $0.001 par value, of Autoweb.com, Inc. (the "Company") held of
record by the undersigned on April 12, 2000, at the Annual Meeting of
Stockholders of the Company to be held on Wednesday, June 7, 2000, at 10:00
a.m., local time, and at any continuations or adjournments thereof (the
"Meeting").
This Proxy, when properly executed and returned in a timely manner, will be
voted at the Meeting and any adjournments or postponements thereof in the manner
described herein. If no contrary indication is made, the proxy will be voted
FOR the Board of Director nominees, FOR Proposals 2 and 3 and in accordance with
the judgment of the persons named as proxies herein on any other matters that
may properly come before the Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
- ------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED AND DATED SEE REVERSE
SIDE ON REVERSE SIDE SIDE
- ------------- -------------
- --------------------------
[X] Please mark votes DETACH HERE
as in this example.
- --------------------------
The Board of Directors unanimously recommends that you vote FOR the Class I
Director nominees and FOR Proposals 2 and 3.
- --------------------------------------------------------------------------------
1. Election of Class I Directors.
Nominees: Dean A. DeBiase and Mark R. Ross
FOR all nominees [_] WITHHOLD from all nominees [_]
-------------------------------------------------
To withhold authority to vote for any individual
Nominee, write that nominee's name on line above.
- --------------------------------------------------------------------------------
2. Proposal to approve an amendment to the Company's FOR AGAINST ABSTAIN
1999 Equity Incentive Plan to increase the number [_] [_] [_]
of shares of Common Stock reserved for issuance
thereunder from 2,800,000 to 5,150,000 shares.
- --------------------------------------------------------------------------------
3. Proposal to ratify the appointment of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as independent auditors [_] [_] [_]
for 2000.
- --------------------------------------------------------------------------------
In accordance with their judgment, the proxies are authorized to vote upon such
other matters as may properly come before the Meeting or any adjournment or
postponement thereof.
This Proxy must be signed exactly as your name appears hereon. If more than one
name appears, all persons so designated should sign. Attorneys, executors,
administrators, trustees and guardians should indicate their capacities. If the
signer is a corporation, please print full corporate name and indicate capacity
of duly authorized officer executing on behalf of the corporation. If the signer
is a partnership, please print full partnership name and indicate capacity of
duly authorized person executing on behalf of the partnership.
Signature: Signature:
----------------------------- -----------------------------
Date: , 2000 Date: , 2000
----------------- -----------------
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