1998 Employee Stock Purchase Plan - EarthWeb Inc.
EARTHWEB INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
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The following constitute the provisions of the 1998 Employee Stock
Purchase Plan of EarthWeb Inc..
1. Purpose. The purpose of the Plan is to provide employees of the
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Company and its Designated Parents or Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll deductions. It
is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.
2. Definitions. As used herein, the following definitions shall
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apply:
(a) "Applicable Laws" means the legal requirements relating to the
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administration of employee stock purchase plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws, the
Code, the rules of any applicable stock exchange or national market system, and
the rules of any foreign jurisdiction applicable to participation in the Plan by
residents therein.
(b) "Board" means the Board of Directors of the Company.
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(c) "Change in Control" means a change in ownership or control of the
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Company effected through the direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by the Company or by
a Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
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(e) "Common Stock" means the common stock of the Company.
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(f) "Company" means EarthWeb Inc., a Delaware corporation.
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(g) "Compensation" means an Employee's base salary from the Company
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or one or more Designated Parents or Subsidiaries, including such amounts of
base salary as are deferred by the Employee (i) under a qualified cash or
deferred arrangement described in Section 401(k) of the Code, or (ii) to a plan
qualified under Section 125 of the Code. Compensation does not include overtime,
bonuses, annual awards, other incentive payments, reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses, deferred
compensation, contributions (other than contributions described in the first
sentence) made on
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the Employee's behalf by the COmpany or one or more Designated Parents or
Subsidiaries under any employee benefit or welfare plan now or hereafter
established, and any other payments not specifically referenced in the first
sentence.
(h) "Corporate Transaction" means any of the following transactions:
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(1) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;
(2) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital
stock of the Company's subsidiary corporations) in connection with
complete liquidation or dissolution of the Company;
(3) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different from those
who held such securities immediately prior to such merger; or
(4) an acquisition by any person or related group of persons
(other than the Company or by a Company-sponsored employee benefit
plan) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding
securities (whether or not in a transaction also constituting a Change
in Control), but excluding any such transaction that the Plan
Administrator determines shall not be a Corporate Transaction.
(i) "Designated Parents or Subsidiaries" means the Parents or
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Subsidiaries which have been designated by the Plan Administrator from time to
time as eligible to participate in the Plan.
(j) "Effective Date" means the effective date of the Registration
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Statement relating to the Company's initial public offering of its Common Stock.
However, should any Designated Parent or Subsidiary become a participating
company in the Plan after such date, then such entity shall designate a separate
Effective Date with respect to its employee-participants.
(k) "Employee" means any individual, including an officer or
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director, who is an employee of the Company or a Designated Parent or Subsidiary
for purposes of Section 423 of the Code. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
individual's employer. Where the period of leave exceeds ninety (90) days and
the individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
ninety-first (91st) day of such leave, for purposes of determining eligibility
to participate in the Plan.
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(l) "Enrollment Date" means the first day of each Offer Period.
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(m) "Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
(n) "Exercise Date" means the last day of each Purchase Period.
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(o) "Fair Market Value" means, as of any date, the value of Common
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Stock determined as follows:
(1) Where there exists a public market for the Common Stock, the
Fair Market Value shall be (A) the closing price for a share of Common
Stock for the last market trading day prior to the time of the
determination (or, if no closing price was reported on that date, on
the last trading date on which a closing price was reported) on the
stock exchange determined by the Plan Administrator to be the primary
market for the Common Stock or the Nasdaq National Market, whichever
is applicable or (B) if the Common Stock is not traded on any such
exchange or national market system, the average of the closing bid and
asked prices of a share of Common Stock on the Nasdaq Small Cap Market
for the day prior to the time of the determination (or, if no such
prices were reported on that date, on the last date on which such
prices were reported), in each case, as reported in The Wall Street
Journal or such other source as the Plan Administrator deems reliable;
(2) In the absence of an established market of the type
described in (1), above, for the Common Stock, and subject to (3),
below, the Fair Market Value thereof shall be determined by the Plan
Administrator in good faith; or
(3) On the initial Effective Date of the Plan, the Fair Market
Value shall be the price at which the Board, or if applicable, the
Pricing Committee of the Board, and the underwriters agree to offer
the Common Stock to the public in the initial public offering of the
Common Stock, net of discounts and underwriting commissions.
(p) "Offer Period" means an Offer Period established pursuant to
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Section 4 hereof.
(q) "Parent" means a "parent corporation," whether now or hereafter
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existing, as defined in Section 424(e) of the Code.
(r) "Participant" means an Employee of the Company or Designated
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Parent or Subsidiary who is actively participating in the plan.
(s) "Plan" means this Employee Stock Purchase Plan.
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(t) "Plan Administrator" means either the Board or a committee of the
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Board that is responsible for the administration of the Plan as is designated
from time to time by resolution of the Board.
(u) "Purchase Period" means a period of approximately six months,
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commencing on February 1 and August 1 of each year and terminating on the next
following July 31 or January 31, respectively; provided, however, that the first
Purchase Period shall commence on the Effective Date and shall end on July 31,
1999.
(v) "Purchase Price" shall mean an amount equal to 85% of the Fair Market
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Value of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower.
(w) "Reserves" means the sum of the number of shares of Common Stock
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covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.
(x) "Subsidiary" means a "subsidiary corporation," whether now or
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hereafter existing, as defined in Section 424(f) of the Code.
3. Eligibility.
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(a) General. Subject to Section 5(a), below, any individual who is an
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Employee on a given Enrollment Date shall be eligible to participate in the Plan
for the Offer Period commencing with such Enrollment Date.
(b) Limitations on Grant and Accrual. Any provisions of the Plan to the
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contrary notwithstanding, no Employee shall be granted an option under the Plan
(i) if, immediately after the grant, such Employee (taking into account stock
owned by any other person whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding
options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any
Parent or Subsidiary, or (ii) which permits the Employee's rights to purchase
stock under all employee stock purchase plans of the Company and its Parents or
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars
($25,000) worth of stock (determined at the Fair Market Value of the shares at
the time such option is granted) for each calendar year in which such option is
outstanding at any time. The determination of the accrual of the right to
purchase stock shall be made in accordance with Section 423(b)(8) of the Code
and the regulations thereunder.
(c) Other Limits on Eligibility. Notwithstanding Subsection (a), above,
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the following Employees shall not be eligible to participate in the Plan for any
relevant Offer Period:
(i) Employees whose customary employment is 20 or fewer hours or less per week;
(ii) Employees whose customary employment is for not more than 5 or fewer months
in any
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calendar year; and (iii) Employees who are subject to rules or laws of a foreign
jurisdiction that prohibit or make impractical the participation of such
Employees in the Plan.
4. Offer Periods.
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(a) The Plan shall be implemented through overlapping or consecutive Offer
Periods until such time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been purchased or (ii) the Plan
shall have been sooner terminated in accordance with Section 19 hereof. The
maximum duration of an Offer Period shall be twenty-seven (27) months.
Initially, the Plan shall be implemented through overlapping Offer Periods of
twenty-four (24) months' duration commencing each February 1 and August 1
following the Effective Date (except that the initial Offer Period shall
commence on the Effective Date and shall end on January 31, 2001).
(b) A Participant shall be granted a separate option for each Offer Period
in which he or she participates. The option shall be granted on the Enrollment
Date and shall be automatically exercised in successive installments on the
Exercise Dates ending within the Offer Period.
(c) An Employee may participate in only one Offer Period at a time.
Accordingly, except as provided in Section 4(d), an Employee who wishes to join
a new Offer Period must withdraw from the current Offer Period in which the
Employee is participating and must also enroll in the new Offer Period prior to
the Enrollment Date for that Offer Period.
(d) If on the first day of any Purchase Period in an Offer Period in which
a Participant is participating, the Fair Market Value of the Common Stock is
less than the Fair Market Value of the Common Stock on the Enrollment Date of
the Offer Period (after taking into account any adjustment during the Offer
Period pursuant to Section 18(a)), the Offer Period shall be terminated
automatically and the Participant shall be enrolled automatically in the new
Offer Period which has its first Purchase Period commencing on that date,
provided the Participant is eligible to participate in the Plan on that date and
has not elected to terminate participation in the Plan.
(e) Except as specifically provided herein, the acquisition of Common
Stock through participation in the Plan for any Offer Period shall neither limit
nor require the acquisition of Common Stock by a Participant in any subsequent
Offer Period.
5. Participation.
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(a) An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the designated payroll office of
the Company at least ten (10) business days prior to the Enrollment Date for the
Offer Period in which such participation will commence, unless a later time for
filing the subscription agreement is set by the Plan Administrator for all
eligible Employees with respect to a given Offer Period.
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(b) Payroll deductions for a Participant shall commence with the
first partial or full payroll period beginning on the Enrollment Date and shall
end on the last complete payroll period during the Offer Period, unless sooner
terminated by the Participant as provided in Section 10.
6. Payroll Deductions.
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(a) At the time a Participant files a subscription agreement, the
Participant shall elect to have payroll deductions made during the Offer Period
in amounts between one percent (1%) and not exceeding fifteen percent (15%) of
the Compensation which the Participant receives during the Offer Period.
(b) All payroll deductions made for a Participant shall be credited
to the Participant's account under the Plan and will be withheld in whole
percentages only. A Participant may not make any additional payments into such
account.
(c) A Participant may discontinue participation in the Plan as
provided in Section 10, or may increase or decrease the rate of payroll
deductions during the Offer Period by completing and filing with the Company a
change of status notice in the form of Exhibit B to this Plan authorizing an
increase or decrease in the payroll deduction rate. Any decrease in the rate of
a Participant's payroll deductions shall be effective with the first full
payroll period commencing ten (10) business days after the Company's receipt of
the change of status notice unless the Company elects to process a given change
in participation more quickly. Any increase in the rate of a Participant's
payroll deductions shall be effective with the next Purchase Period following
the Purchase Period in which the Company receives the change of status notice if
such notice is filed within ten (10) business days before the commencement of
the next Purchase Period. A Participant's subscription agreement (as modified by
any change of status notice) shall remain in effect for successive Offer Periods
unless terminated as provided in Section 10. The Plan Administrator shall be
authorized to limit the number of payroll deduction rate changes during any
Offer Period.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) herein, a Participant's
payroll deductions may be decreased to 0% at such time during any Purchase
Period which is scheduled to end during the current calendar year (the "Current
Purchase Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Purchase Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Purchase Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such Participant's subscription
agreement, as amended, at the beginning of the first Purchase Period which is
schedule to end in the following calendar year, unless terminated by the
Participant as provided in Section 10.
7. Grant of Option. On the Enrollment Date, each Participant shall
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be granted an option to purchase (at the applicable Purchase Price) up to a
number of shares of the Common Stock determined by dividing fifteen percent
(15%) of such Participant's Compensation receivable during the Offer Period by
the applicable Purchase Price; provided (i)
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that such option shall be subject to the limitations set forth in Sections 3(b)
and 12 hereof, and (ii) the maximum number of shares of Common Stock a
Participant shall be permitted to purchase in any Purchase Period shall be 5,000
shares, subject to adjustment as provided in Section 18 hereof. Exercise of the
option shall occur as provided in Section 8, unless the Participant has
withdrawn pursuant to Section 10, and the option, to the extent not exercised,
shall expire on the last day of the Offer Period.
8. Exercise of Option. Unless a Participant withdraws from the Plan
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as provided in Section 10, below, the Participant's option for the purchase of
shares will be exercised automatically on each Exercise Date, by applying the
accumulated payroll deductions in the Participant's account to purchase the
maximum number of full shares subject to the option by dividing such
Participant's payroll deductions accumulated prior to such Exercise Date and
retained in the Participant's account as of the Exercise Date by the applicable
Purchase Price. No fractional shares will be purchased; any payroll deductions
accumulated in a Participant's account which are not sufficient to purchase a
full share shall be carried over to the next Purchase Period or Offer Period,
whichever applies, or returned to the Participant, if the Participant withdraws
from the Plan. Notwithstanding the foregoing, any amount remaining in a
Participant's account following the purchase of shares on the Exercise Date due
to the application of Section 423(b)(8) of the Code or Section 7, above, shall
be returned to the Participant and shall not be carried over to the next Offer
Period. During a Participant's lifetime, a Participant's option to purchase
shares hereunder is exercisable only by the Participant.
9. Delivery. Upon receipt of a request from a Participant after each
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Exercise Date on which a purchase of shares occurs, the Company shall arrange
the delivery to such Participant, as promptly as practicable, of a certificate
representing the shares purchased upon exercise of the Participant's option.
10. Withdrawal; Termination of Employment.
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(a) A Participant may either (i) withdraw all but not less than all
the payroll deductions credited to the Participant's account and not yet used to
exercise the Participant's option under the Plan or (ii) terminate future
payroll deductions, but allow accumulated payroll deductions to be used to
exercise the Participant's option under the Plan at any time by giving written
notice to the Company in the form of Exhibit B to this Plan. If the Participant
elects withdrawal alternative (i) described above, all of the Participant's
payroll deductions credited to the Participant's account will be paid to such
Participant in the payroll period than commences thirty (30) days after receipt
of notice of withdrawal, such Participant's option for the Offer Period will be
automatically terminated, and no further payroll deductions for the purchase of
shares will be made during the Offer Period. If the Participant elects
withdrawal alternative (ii) described above, no further payroll deductions for
the purchase of shares will be made during the Offer Period, all of the
Participant's payroll deductions credited to the Participant's account will be
applied to the exercise of the Participant's option on the next Exercise Date,
and after such Exercise Date, such Participant's option for the Offer Period
will be automatically terminated. If a Participant withdraws from an Offer
Period, payroll deductions will not resume at the
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beginning of the succeeding Offer Period unless the Participant delivers to the
Company a new subscription agreement.
(b) Upon termination of a Participant's employment relationship (as
described in Section 2(k)) at a time more than three (3) months from the next
scheduled Exercise Date, the payroll deductions credited to such Participant's
account during the Offer Period but not yet used to exercise the option will be
returned to such Participant or, in the case of his/her death, to the person or
persons entitled thereto under Section 14, and such Participant's option will be
automatically terminated. Upon termination of a Participant's employment
relationship (as described in Section 2(k)) within three (3) months of the next
scheduled Exercise Date, the payroll deductions credited to such Participant's
account during the Offer Period but not yet used to exercise the option will be
applied to the purchase of Common Stock on the next Exercise Date, unless the
Participant (or in the case of the Participant's death, the person or persons
entitled to the Participant's account balance under Section 14) withdraws from
the Plan by submitting a change of status notice in accordance with subsection
(a) of this Section 10. In such a case, no further payroll deductions will be
credited to the Participant's account following the Participant's termination of
employment and the Participant's option under the Plan will be automatically
terminated after the purchase of Common Stock on the next scheduled Exercise
Date.
11. Interest. No interest shall accrue on the payroll deductions
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credited to a Participant's account under the Plan.
12. Stock.
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(a) Subject to adjustment upon changes in capitalization of the
Company as provided in Section 18, the maximum number of shares of Common Stock
which shall be made available for sale under the Plan shall be 159,000 shares,
plus an annual increase to be added on the first day of the Company's fiscal
year beginning in 2000 equal to the lesser of (i) 400,000 shares, (ii) two
percent (2%) of the outstanding shares on such date, or (iii) a lesser number of
shares determined by the Plan Administrator. If on a given Exercise Date the
number of shares with respect to which options are to be exercised exceeds the
number of shares then available under the Plan, the Plan Administrator shall
make a pro rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine to be
equitable.
(b) A Participant will have no interest or voting right in shares
covered by the Participant's option until such shares are actually purchased on
the Participant's behalf in accordance with the applicable provisions of the
Plan. No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date of such purchase.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
his or her spouse.
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13. Administration. The Plan shall be administered by the Plan
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Administrator which shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Plan Administrator shall, to the full
extent permitted by Applicable Law, be final and binding upon all persons.
14. Designation of Beneficiary.
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(a) Each Participant will file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the Participant's account
under the Plan in the event of such Participant's death. If a Participant is
married and the designated beneficiary is not the spouse, spousal consent shall
be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the Participant
(and the Participant's spouse, if any) at any time by written notice. In the
event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living (or in existence) at the time of such
Participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the Participant, or if no such
executor or administrator has been appointed (to the knowledge of the Plan
Administrator), the Plan Administrator shall deliver such shares and/or cash to
the spouse (or domestic partner, as determined by the Administrator) of the
Participant, or if no spouse (or domestic partner) is known to the Plan
Administrator, then to the issue of the Participant, such distribution to be
made per stirpes (by right of representation).
15. Transferability. Neither payroll deductions credited to a
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Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Plan Administrator may treat such act as an election to
withdraw funds from an Offer Period in accordance with Section 10.
16. Use of Funds. All payroll deductions received or held by the
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Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each
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Participant in the Plan. Statements of account will be given to Participants at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance, if any.
18. Adjustments Upon Changes in Capitalization; Corporate
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Transactions.
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(a) Adjustments Upon Changes in Capitalization. Subject to any
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required action by the stockholders of the Company, the Reserves, the Purchase
Price, as well as any other terms that the Plan Administrator determines require
adjustment shall be proportionately adjusted
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for (i) any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, (ii) any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company, or (iii) as the Plan Administrator may determine
in its discretion, any other transaction with respect to Common Stock to which
Section 424(a) of the Code applies; provided, however that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Plan
Administrator and its determination shall be final, binding and conclusive.
Except as the Plan Administrator determines, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason hereof shall be made with
respect to, the Reserves and the Purchase Price.
(b) Corporate Transactions. In the event of a proposed Corporate
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Transaction, each option under the Plan shall be assumed by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Plan Administrator determines, in the exercise of its sole discretion and in
lieu of such assumption, to shorten the Offer Period then in progress by setting
a new Exercise Date (the "New Exercise Date"). If the Plan Administrator
shortens the Offer Period then in progress in lieu of assumption in the event of
a Corporate Transaction, the Plan Administrator shall notify each Participant in
writing, at least ten (10) days prior to the New Exercise Date, that the
Exercise Date for the Participant's option has been changed to the New Exercise
Date and that the Participant's option will be exercised automatically on the
New Exercise Date, unless prior to such date the Participant has withdrawn from
the Offer Period as provided in Section 10. For purposes of this Subsection, an
option granted under the Plan shall be deemed to be assumed if, in connection
with the Corporate Transaction, the option is replaced with a comparable option
with respect to shares of capital stock of the successor corporation or Parent
thereof. The determination of option comparability shall be made by the Plan
Administrator prior to the Corporate Transaction and its determination shall be
final, binding and conclusive on all persons.
19. Amendment or Termination.
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(a) The Plan Administrator may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 18, no such
termination can affect options previously granted, provided that an Offer Period
may be terminated by the Plan Administrator on any Exercise Date if the Plan
Administrator determines that the termination of the Offer Period is in the best
interests of the Company and its stockholders. Except as provided in Section 18,
no amendment may make any change in any option theretofore granted which
adversely affects the rights of any Participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other Applicable Law), the Company shall obtain stockholder approval in such a
manner and to such a degree as required
(b) Without stockholder consent and without regard to whether any
Participant rights may be considered to have been "adversely affected," the Plan
Administrator shall be entitled to limit the frequency and/or number of changes
in the amount withheld during
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Offer Periods, change the length of Purchase Periods within any Offer Period,
determine whether subsequent Offer Periods shall be consecutive or overlapping,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, establish additional terms, conditions, rules or procedures
to accommodate the rules or laws of applicable foreign jurisdictions, permit
payroll withholding in excess of the amount designated by a Participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied towards the purchase of Common Stock for each Participant properly
correspond with amounts withheld from the Participant's Compensation, and
establish such other limitations or procedures as the Plan Administrator
determines in its sole discretion advisable and which are consistent with the
Plan.
20. Notices. All notices or other communications by a Participant to
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the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Plan Administrator at the
location, or by the person, designated by the Plan Administrator for the receipt
thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued
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with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all Applicable
Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance. As a condition to the exercise of an option,
the Company may require the Participant to represent and warrant at the time of
any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned Applicable Laws. In addition, no options shall be exercised
or shares issued hereunder before the Plan shall have been approved by
stockholders of the Company as provided in Section 23.
22. Term of Plan. The Plan shall become effective upon the earlier to
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occur of its adoption by the Board or its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 19.
23. Stockholder Approval. Continuance of the Plan shall be subject to
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approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the degree and manner required under Applicable Laws.
24. No Employment Rights. The Plan does not, directly or indirectly,
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create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company or
a Designated Parent or Subsidiary, and it shall not be deemed to interfere in
any way with such employer's right to terminate, or otherwise modify, an
employee's employment at any time.
25. No Effect on Retirement and Other Benefit Plans. Except as
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specifically provided in a retirement or other benefit plan of the Company or a
Designated Parent or
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Subsidiary, participation in the Plan shall not be deemed compensation for
purposes of computing benefits or contributions under any retirement plan of the
Company or a Designated Parent or Subsidiary, and shall not affect any benefits
under any other benefit plan of any kind or any benefit plan subsequently
instituted under which the availability or amount of benefits is related to
level of compensation. The Plan is not a "Retirement-Plan" or "Welfare Plan"
under the Employee Retirement Income Security Act of 1974, as amended.
26. Effect of Plan. The provisions of the Plan shall, in accordance
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with its terms, be binding upon, and inure to the benefit of, all successors of
each Participant, including, without limitation, such Participant's estate and
the executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.
27. Governing Law. The Plan is to be construed in accordance with and
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governed by the internal laws of the State of New York without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of New York to the rights
and duties of the parties, except to the extent the internal laws of the State
of New York are superseded by the laws of the United States. Should any
provision of the Plan be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.
12
<PAGE>
EXHIBIT A
<TABLE>
EarthWeb Inc. 1998 Employee Stock Purchase Plan
SUBSCRIPTION AGREEMENT
Effective with the Offer Period beginning on:
[_] ESPP Effective Date [_] February 1, 1999 or [_] August 1, 1999
<S> <C> <C> <C>
1. PERSONAL INFORMATION (MODIFY DATA REQUESTED AS APPROPRIATE)
Legal Name (Please Print) _____________________________________________________ _____________________ ___________________
(Last) (First) (MI) Location Department
Street Address ________________________________________________________________ ___________________________________________
Daytime Telephone
City, Sate/Country, Zip _______________________________________________________ ___________________________________________
E-Mail Address
Social Security No._______________________________ Employee I.D. No.___________ ___________________________________________
Manager Mgr. Location
</TABLE>
2. ELIGIBILITY Any Employee whose customary employment is more than 20 hours
per week and more than (5) months per calendar year, who does not hold
(directly or indirectly five percent (5%) or more of the combined voting
power of the Company, a parent or a subsidiary whether in stock or options to
acquire stock is eligible to participate in the Earth Web Inc. 1998 Employee
Stock Purchase Plan (the "ESPP") provided, however, that Employees who are
subject to the rules or laws of a foreign jurisdiction that prohibit or make
impractical the participation of such Employees in the ESPP are not eligible
to participate.
3. DEFINITIONS Each capitalized term in this Subscription Agreement shall have
the meaning set forth in the ESPP.
4. SUBSCRIPTION I hereby elect to participate in the ESPP and subscribe to
purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the ESPP. I have received a complete copy of the
ESPP and a prospectus describing the ESPP and understand that my
participation in the ESPP is in all respects subject to the terms of the
ESPP. The effectiveness of this Subscription Agreement is dependent on my
eligibility to participate in the ESPP.
5. PAYROLL DEDUCTION AUTHORIZATION I hereby authorize payroll deductions from
my Compensation during the Offer Period in the percentage specified below
(payroll reductions may not exceed 15% of Compensation nor $21,250 per
calendar year):
-----------------------------------------------------------------------
Percentage be Deducted (circle one) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12%
-----------------------------------------------------------------------
-----------
13% 14% 15%
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6. ESPP ACCOUNTS AND PURCHASE PRICE I understand that all payroll deductions
will be credited to my account under the ESPP. No additional payments may be
made to my account. No interest will be credited an funds held in the account
at any time including any refund of the account caused by withdrawal from the
ESPP. All payroll deductions shall be accumulated for the purchase of Company
Common Stock at the applicable Purchase Price determined in accordance with
the ESPP.
7. WITHDRAWAL AND CHANGES IN PAYROLL Deduction I understand that I may
discontinue my participation in the ESPP at any time prior to an Exercise
Date as provided in Section 10 of the ESPP, but if I do not withdraw from the
ESPP, any accumulated payroll deductions will be applied automatically to
purchase Company Common Stock. I may increase or decrease the rate of my
payroll deductions in whole percentage increments to not less than one
percent (1%) on one occasion during any Purchase Period by completing and
timely filing a Change of Status Notice. Any decrease will be effective for
the full payroll period occurring after ten (10) business days from the
Company's receipt of the Change of Status Notice. Any increase will be
effective for the next Purchase Period occurring after the Purchase Period in
which the Change of Status Notice is filed with the Company if such notice is
filed more than ten (10) business days prior to the commencement of the next
Purchase Period.
8. PERPETUAL SUBSCRIPTION I understand that this Subscription Agreement shall
remain in effect for successive Offer Periods until I withdraw from
participation in the ESPP, or termination of the ESPP.
A-1
<PAGE>
9. TAXES I have reviewed the ESPP prospectus discussion of the federal tax
consequences of participation in the ESPP and consulted with tax
consultants as I deemed advisable prior to my participation in the ESPP. I
hereby agree to notify the Company in writing within thirty (30) days of
any disposition (transfer or sale) of any shares purchased under the ESPP
if such disposition occurs within two (2) years of the Enrollment Date (the
first day of the Offer Period during which the shares were purchased) or
within one (1) year of the Exercise Date (the date I purchased such
shares), and I will make adequate provision to the Company for foreign,
federal, state or other tax withholding obligations, if any, which arise
upon the disposition of the shares. In addition, the Company may withhold
from my Compensation any amount necessary to make applicable tax
withholding obligations incident to my participation in the ESPP, including
any withholding necessary to make available to the Company any tax
deductions or benefits contingent on such withholding.
10. DESIGNATION OF BENEFICIARY In the event of my death, I hereby designate the
following person or trust as my beneficiary to receive all payments and
shares due to me under the ESPP: [_] I am single [_] I am married
Beneficiary (please print)_________________________________________________
(Last) (First) (MI)
Relationship to Beneficiary (if any)_______________________________________
Street Address_____________________________________________________________
City, State/Country, Zip___________________________________________________
11. TERMINATION OF ESPP I understand that the Company has the right,
exercisable in its sole discretion, to amend or terminate the ESPP at any
time, and a termination may be effective as early as an Exercise Date
(after purchase of shares on such date) within each outstanding Offer
Period.
Date:_____________ Employee Signature:_____________________________________
________________________________________________________
spouse's signature (if beneficiary is other than spouse)
A-2
<PAGE>
EXHIBIT B
EarthWeb Inc. 1998 Employee Stock Purchase Plan
CHANGE OF STATUS NOTICE
____________________________________________
Participant Name (Please Print)
_____________________________________________
Social Security Number
================================================================================
WITHDRAWAL FROM ESPP
I hereby withdraw from the EarthWeb Inc. 1998 Employee Stock Purchase Plan
(the "ESPP") and agree that my option under the applicable Offer Period
will be automatically terminated and all accumulated payroll deductions
credited to my account will be refunded to me or applied to the purchase of
Common Stock depending on the alternative indicated below. No further
payroll deductions will be made for the purchase of shares in the
applicable Offer Period and I shall be eligible to participate in a future
Offer Period only by timely delivery to the Company of a new Subscription
Agreement.
[_] WITHDRAWAL AND PURCHASE OF COMMON STOCK
Payroll deductions will terminate, but your account balance will be applied
to purchased Common Stock on the next Exercise Date. Any remaining balance
will be refunded.
[_] WITHDRAWAL WITHOUT PURCHASE OF COMMON STOCK
Entire account balance will be refunded to me and no Common Stock will be
purchased on the next Exercised Date provided this notice is submitted to
the Company ten (10) business days prior to the next Exercise Date.
================================================================================
[_] CHANGE IN PAYROLL DEDUCTION
I hereby elect to change my rate of payroll deduction under the ESPP as
follows (select one):
----------------------------------------------------------------------
Percentage to be Deducted (circle one) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11%
12% 13% 14% 15%
----------------------------------------------------------------------
The following rules under ESPP apply to changing your payroll deduction
rate:
DECREASE-- Decrease in payroll deduction will be effective for the first
--------
full payroll period commencing no fewer than ten (10) business
days following the Company's receipt of this notice, unless this
change is processed more quickly.
INCREASE-- An increase in payroll deduction will be effective for the next
--------
Purchase Period following the Purchase Period in which this
notice is received by the Company provided that this notice is
submitted to the Company no fewer than ten (10) business days
before the first day of the upcoming Purchase Period.
================================================================================
B-1
<PAGE>
================================================================================
[_] CHANGE OF BENEFICIARY [_] I am single [_] I am married
This change of beneficiary shall terminate my previous beneficiary
designation under the ESPP. In the event of my death, I hereby designate
the following person or trust as my beneficiary to receive all payments and
shares due to me under the ESPP:
Beneficiary (please print)______________________________________________________
(Last) (First) (MI)
Relationship to Beneficiary (if any)____________________________________________
Street Address__________________________________________________________________
City, State/Country, Zip________________________________________________________
================================================================================
Date:______________ Employee Signature:_____________________________________
________________________________________________________
spouse's signature (if beneficiary is other than spouse
B-1