In addition to Messrs. Raifman and Edwards, the following persons were our
executive officers as of the record date:
NAME AGE POSITION
---- --- --------
M. Joy Fauvre............... 48 Senior Vice President, Marketing
Timothy M. Favia............ 37 Executive Vice President, Sales and Development
Walter Haefeker............. 39 Chief Operating Officer
Robert M. Henely............ 48 Senior Vice President, Technical Operations
Ruiqing "Barclay" Jiang..... 38 Chief Technology Officer
Brian J. Powley............. 38 Senior Vice President, Client Services
Sameer Prabhavalkar......... 37 Vice President, Finance and Controller
Alan M. Raifman............. 45 Vice President, Business and Legal Affairs
M. JOY FAUVRE has served as our Senior Vice President, Marketing since July
1999. Prior to joining us, Ms. Fauvre served as a marketing director for
Heller Financial, a commercial lender, from October 1994 to July 1999. From
June 1994 to October 1994, Ms. Fauvre served as acting advertising manager for
Qantas Airways, a commercial airline, and from August 1991 to January 1994,
she served as an account supervisor for D'Arcy Masius Benton & Bowles, an
advertising agency. Ms. Fauvre received a B.A. in theatre from the University
of California, Santa Barbara and an M.A. in theatre from Ball State
University.
TIMOTHY M. FAVIA has served as our Executive Vice President, Sales and
Development since January 1999. Prior to joining us, Mr. Favia was a co-
founder of Oxygen Electronics, LLC, a distributor of electronic components,
where he served as managing partner from June 1997 to December 1998. From
January 1996 to May 1997, Mr. Favia served as vice president, western region,
of Open Port Technology, an Internet messaging services company. From July
1988 to January 1996, he served as director of international sales for Thomson
Software Products, a software company. Mr. Favia received a B.A. in political
science from Fairfield University.
WALTER HAEFEKER has served as our Chief Operating Officer since January
1999. Since September 1994, Mr. Haefeker has served as a managing member for
PointBreak Ventures, LLC. From March 1994 to April 1995, Mr. Haefeker served
as chairman of the board of directors for CADIS Software, Ltd., a software
company. Mr. Haefeker received an Abitur in chemistry and physics from
Theodor-Heass Gymnasium, Pinneberg, Germany.
ROBERT M. HENELY has served as our Senior Vice President, Technical
Operations since March 1999. Prior to joining us, Mr. Henely served as
director of engineering for Boole & Babbage, Inc., a software company, from
December 1997 to March 1999. From November 1981 to December 1997, Mr. Henely
served as a research and development manager at Hewlett-Packard Company. Mr.
Henely received a B.S. in economics from California State University, Chico
and an M.S. in econometrics from the University of California, San Diego.
RUIQING "BARCLAY" JIANG has served as our Chief Technology Officer since
March 1999. Prior to joining us, Mr. Jiang served as president of Netranscend
Software, Inc., a business software company, from November 1996 until it was
acquired by us in March 1999. From October 1993 to September 1997, Mr. Jiang
served as a product manager for FutureLabs, Inc., a software company. Mr.
Jiang received a B.S. in computer science from Xi'an Jiaotong University,
China and an M.S. in applied statistics from Louisiana State University.
BRIAN J. POWLEY has served as our Senior Vice President, Client Services
since October 1999. Prior to joining us, Mr. Powley served as Partner,
Worldwide Account Director for Ogilvy Interactive, the interactive division of
Ogilvy Worldwide, from February 1994 to September 1999, where he was
responsible for global strategic direction and management of IBM's Interactive
Brand Advertising. He also held positions at Ziff-Davis
14
from January 1994 to February 1995, and at EMAP Computing from May 1992 to
January 1994. Mr. Powley received a degree in management studies from London
Guildhall University.
SAMEER PRABHAVALKAR has served as our Vice President of Finance and
Controller since August 1999. Prior to joining us, Mr. Prabhavalkar served in
various positions at PricewaterhouseCoopers LLP from November 1996 to August
1999, most recently as Business Assurance Manager in its high-tech group. From
February 1995 to November 1996, Mr. Prabhavalkar served as Financial
Controller at InfoGain Corporation (formerly InfoSoft, Inc.), a software and
services company. Mr. Prabhavalkar received a degree in financial management
from Bombay University and an MBA from Northeast Louisiana University. Mr.
Prabhavalkar has achieved Chartered Accountant status in India.
ALAN M. RAIFMAN has served as our Vice President, Business and Legal Affairs
since February 1999. Prior to joining us, Mr. Raifman served as an associate
for Albert A. Rettig & Associates, a business services company, from June 1997
through January 1999. From July 1989 to June 1997, Mr. Raifman served as
President and a director of Little Cargo, Inc., a juvenile product development
company that he co-founded. Mr. Raifman is currently on the board of directors
of Little Cargo, Inc. Mr. Raifman received a B.A. in history and a J.D. from
Washington University.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires our
officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, to file certain reports regarding
ownership of, and transactions in, our securities with the Securities and
Exchange Commission and with The Nasdaq Stock Market, Inc. Those officers,
directors, and 10% stockholders are also required to furnish us with copies of
all Section 16(a) forms that they file.
Based solely on our review of copies of Forms 3 and 4 and amendments to
those Forms furnished to us pursuant to Rule 16a3(e), and Forms 5 and
amendments thereto furnished to us with respect to the last fiscal year, and
any written representations referred to in Item 405(b)(2)(i) of Regulation S-K
stating that no Forms 5 were required, we believe that, during the last fiscal
year, all Section 16(a) filing requirements applicable to our officers and
directors were complied with, except that each of Pequot Capital Management,
Inc. and Lawrence D. Lenihan, Jr. did not timely file Forms 3.
15
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS, MANAGEMENT AND
DIRECTORS OF MEDIAPLEX
The following table sets forth information, as of April 30, 2000, the record
date, with respect to beneficial ownership of our common stock by:
. each person or entity who beneficially owns more than 5% of our common
stock;
. each of our named executive officers;
. each of our directors; and
. all executive officers and directors as a group.
Except as otherwise noted, the address of each 5% stockholder listed in the
table is: c/o Mediaplex, Inc., 177 Steuart Street, Second Floor, San
Francisco, California 94105. The table includes all shares of common stock
issuable within 60 days of April 30, 2000, upon the exercise of options and
warrants beneficially owned by the indicated stockholders on that date based
on options and warrants outstanding as of April 30, 2000. Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange
Commission and includes voting and investment power with respect to shares. To
our knowledge, except under applicable community property laws or as otherwise
indicated, the persons named in the table have sole voting and sole investment
control with respect to all shares beneficially owned. The applicable
percentage of ownership for each stockholder is based on 32,987,886 shares of
common stock outstanding as of April 30, 2000, together with applicable
options and warrants for that stockholder. Shares of common stock issuable
upon exercise of options and warrants beneficially owned are deemed
outstanding for the purpose of computing the percentage ownership of the
person holding those options and warrants, but are not deemed outstanding for
computing the percentage ownership of any other person.
NUMBER OF SHARES PERCENT
OF COMMON STOCK OF SHARES
NAME BENEFICIALLY OWNED OUTSTANDING
---- ------------------ -----------
Zeron Capital Ltd.(1)........................... 2,625,000 8.0
44 Church Street
Hamilton HM12
Bermuda
Pequot Capital Management, Inc.(2).............. 1,771,309 5.4
500 Nyala Farm Road
Westport, CT 06880
Gregory R. Raifman(3)........................... 7,010,312 20.2
Jon L. Edwards(4)............................... 6,760,313 19.6
Ruiqing "Barclay" Jiang(5)...................... 2,265,667 6.8
Walter Haefeker(6).............................. 1,580,000 4.6
Lawrence D. Lenihan, Jr.(7)..................... 1,771,309 5.4
James DeSorrento(8)............................. 360,000 1.1
A. Brooke Seawell(9)............................ 135,000 *
Peter S. Sealey(10)............................. 60,000 *
Timothy M. Favia(11)............................ 626,000 1.9
All executive officers and directors as a group
(14 persons)(12)............................... 20,751,156 53.8
* Less than 1%
16
(1) Includes 1,500,000 shares held of record by Odyssey Venture Partners and
1,000,000 shares held of record by Argossy Limited. Odyssey Venture
Partners and Argossy Limited are venture funds affiliated with Zeron
Capital Ltd. Also includes a warrant held by Zeron Capital Ltd. to
purchase 125,000 shares.
(2) Includes 1,483,484 shares held of record by Pequot Private Equity Fund,
L.P., 187,825 shares held of record by Pequot Offshore Private Equity
Fund, Inc. and 100,000 shares held in other funds collectively managed by
Pequot Capital Management, Inc. Pequot Private Equity Fund, L.P. and
Pequot Offshore Private Equity Fund, Inc. are managed by Pequot Capital
Management, Inc.
(3) Includes 19,360 shares held of record by R&E Holdings, LLC and 1,750,000
shares issuable upon the exercise of options exercisable within 60 days of
April 30, 2000. Mr. Raifman is one of the beneficial owners of R&E
Holdings, LLC. Mr. Raifman disclaims beneficial interest of the shares
held by R&E Holdings, LLC, except to the extent of his pecuniary interest
in such entity.
(4) Includes 19,360 shares held of record by R&E Holdings, LLC and 1,500,000
shares of Common Stock issuable upon the exercise of options exercisable
within 60 days of April 30, 2000. Mr. Edwards is one of the beneficial
owners of R&E Holdings, LLC. Mr. Edwards disclaims beneficial interest of
the shares held by R&E Holdings, LLC, except to the extent of his
pecuniary interest in such entity.
(5) Includes 286,667 shares issuable upon the exercise of options exercisable
within 60 days of April 30, 2000.
(6) Includes 1,250,000 shares issuable upon the exercise of options
exercisable within 60 days of April 30, 2000.
(7) Includes 1,771,309 shares beneficially owned by Pequot Capital Management,
Inc. See note (2). Mr. Lenihan is the fund manager of Pequot Capital
Management, Inc. Mr. Lenihan disclaims beneficial ownership of these
shares, except to the extent of his pecuniary interest in that entity.
(8) Includes 300,000 shares held of record by DeSorrento Revocable Trust, of
which Mr. DeSorrento is the beneficial owner, 50,000 shares held by Mr.
DeSorrento and 10,000 shares issuable upon the exercise of option
exercisable within 60 days of April 30, 2000.
(9) Includes 75,000 shares held of record by Seawell Revocable Trust, A.
Brooke Seawell & Patricia C. Seawell, trustees, 50,000 shares held by Mr.
Seawell and 10,000 shares issuable upon the exercise of option exercisable
within 60 days of April 30, 2000. Mr. Seawell is one of the beneficial
owners of the Seawell Revocable Trust.
(10) Includes 60,000 shares issuable upon the exercise of options exercisable
within 60 days of April 30, 2000.
(11) Includes 500,000 shares issuable upon the exercise of a warrant
exercisable within 60 days of April 30, 2000 and 125,000 shares issuable
upon the exercise of options exercisable within 60 days of April 30,
2000.
(12) See notes (3) through (11). Includes an aggregate of 5,075,972 shares
issuable upon exercise of options and 500,000 shares issuable upon the
exercise of warrants held by our executive officers and directors
exercisable within 60 days of April 30, 2000.
17
EXECUTIVE COMPENSATION
The following table sets forth the total compensation received for services
rendered to us during the fiscal years ended December 31, 1998 and 1999 by our
Chief Executive Officer and our next four most highly paid executive officers.
These five officers are referred to as the "named executive officers" in this
proxy statement. In 1998, Messrs. Gregory Raifman and Jon Edwards, general
partners of Raifman & Edwards, LLP, provided legal and management services to
us, for which Raifman & Edwards, LLP was paid approximately $197,000. See
"Related Party Transactions." Except as disclosed below and in "Related Party
Transactions," we gave no bonuses, stock-based compensation or other
compensation to our named executive officers in 1998 and 1999.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------
NAME AND PRINCIPAL POSITION SALARY ($) BONUS ($) OTHER ($)
--------------------------- ---------- --------- ---------
Gregory R. Raifman, Chief Executive Offi-
cer (1).................................. 1999 $223,333 $38,000 $8,250(2)
1998 $ 35,000 -- --
Jon L. Edwards, President (3)............. 1999 $223,333 $38,000 $8,250(2)
1998 $ 35,000 -- --
Walter Haefeker, Chief Operating Officer
(4)...................................... 1999 $198,333 $34,250 --
1998 $ 41,100 -- --
Ruiqing "Barclay" Jiang, Chief Technology
Officer (5).............................. 1999 $131,762 $17,375 --
Timothy M. Favia, Executive Vice
President, Sales and Development (6)..... 1999 $151,682 $50,500 --
(1) Mr. Raifman began employment with us in September 1998.
(2) Represents an annual automobile allowance.
(3) Mr. Edwards began employment with us in April 1998.
(4) Mr. Haefeker began employment with us in September 1998.
(5) Mr. Jiang began employment with us in March 1999.
(6) Mr. Favia began employment with us in January 1999.
OPTION GRANTS DURING LAST FISCAL YEAR
The following table sets forth certain information with respect to stock
options granted to each of our named executive officers in the fiscal year
ended December 31, 1999, including the potential realizable value over the
ten-year term of the options, based on assumed rates of stock appreciation of
0%, 5% and 10%, compounded annually. These assumed rates of appreciation
comply with the rules of the Securities and Exchange Commission and do not
represent our estimate of future stock price. Actual gains, if any, on stock
option exercises will be dependent on the future performance of our common
stock.
In fiscal 1999, we granted options to purchase up to an aggregate of
9,659,721 shares to employees, directors and consultants. All options were
granted under our Amended and Restated 1999 Stock Plan at exercise prices at
or above the fair market value of our common stock on the date of grant, as
determined in good faith by our board of directors. All options have a term of
ten years. Optionees may pay the exercise price by cash, check, cancellation
of any outstanding indebtedness of the optionholder to us, delivery of
already-owned shares of our common stock or consideration received under a
cashless exercise program. Options listed below for Messrs. Raifman, Edwards
and Haefeker are immediately exercisable upon grant; however, any unvested
shares are subject to repurchase by us at their cost if the optionee's service
with us terminates. Option shares for Messrs. Raifman, Edwards, and Haefeker
vest at the rate of 1/6th of the shares on the six-month anniversary of the
vesting commencement date, and 1/36th of the shares per month thereafter as
long as the optionee is employed by us.
18
Option shares for Messrs. Jiang and Favia vest and become exercisable at the
rate of 1/4th of the shares on the one-year anniversary of the vesting
commencement date and 1/48th of the shares per month thereafter as long as the
optionee is employed by us.
% OF TOTAL
OPTIONS POTENTIAL REALIZABLE VALUE AT
NUMBER OF GRANTED TO DEEMED ASSUMED ANNUAL RATES OF STOCK
SECURITIES EMPLOYEES VALUE PER PRICE APPRECIATION FOR OPTION
UNDERLYING IN LAST EXERCISE SHARE ON TERM
OPTIONS FISCAL PRICE DATE OF EXPIRATION --------------------------------
NAME GRANTED YEAR PER SHARE GRANT DATE 0% 5% 10%
---- ---------- ---------- --------- --------- ---------- ---------- ---------- ----------
Gregory R. Raifman...... 1,750,000 18.12% $0.50 $1.125 2/19/09 $1,968,750 $3,206,886 $5,106,430
Jon L. Edwards.......... 1,500,000 15.53 0.50 1.125 2/19/09 1,687,500 2,748,760 4,376,940
Walter Haefeker......... 1,250,000 12.94 0.50 1.125 2/19/09 1,406,250 2,290,633 3,647,450
Ruiqing "Barclay" Jiang. 688,000 7.12 0.50 1.125 3/25/09 774,000 1,260,764 2,007,557
Timothy M. Favia........ 500,000 5.18 0.50 1.125 2/19/09 562,500 916,253 1,458,980
AGGREGATE OPTION EXERCISES DURING LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table sets forth information with respect to our named
executive officers concerning exercisable and unexercisable options held as of
December 31, 1999. The named executive officers did not exercise any of their
options during the fiscal year ended December 31, 1999.
The "Value of Unexercised In-the-Money Options at December 31, 1999" is
based on a value of $62.75 per share, the closing price of our common stock on
The Nasdaq Stock Market's National Market as of December 31, 1999, less the
per share exercise price, multiplied by the number of shares issuable upon
exercise of the option. All options were granted under our Amended and
Restated 1999 Stock Plan. Options listed below for Messrs. Raifman, Edwards
and Haefeker are immediately exercisable; however, as a condition of exercise,
the optionee must enter into a restricted stock purchase agreement granting us
the right to repurchase any unvested portion of the shares issuable by such
exercise at their cost if the optionee's service with us terminates. Option
shares for Messrs. Raifman, Edwards, and Haefeker vest at the rate of 1/6th of
the shares on the six-month anniversary of the vesting commencement date, and
1/36th of the shares per month thereafter as long as the optionee is employed
by us. Option shares for Messrs. Jiang and Favia vest and become exercisable
at the rate of 1/4th of the shares on the one-year anniversary of the vesting
commencement date and 1/48th of the shares per month thereafter as long as the
optionee is employed by us.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEYOPTIONS
AT DECEMBER 31, 1999 (#) AT DECEMBER 31, 1999 ($)
---------------------------------- --------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------- ---------------- ------------ -------------
Gregory R. Raifman...... 1,750,000 -- $108,937,500 --
Jon L. Edwards.......... 1,500,000 -- 93,375,000 --
Walter Haefeker......... 1,250,000 -- 77,812,500 --
Ruiqing "Barclay" Jiang. 172,000 516,000 10,707,000 $32,121,000
Timothy M. Favia........ -- 500,000 -- 31,125,000
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to establishing the compensation committee, our board of directors as
a whole performed the functions delegated to the compensation committee. No
member of the board of directors or the compensation committee serves as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of our board of
directors or compensation committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS DURING THE LAST FISCAL YEAR
During the year ended December 31, 1999, we have never been party to, and
have no plan to be a party to, any transaction or series of similar
transactions in which the amount involved exceeded or will exceed
19
$60,000 and in which any of our director, executive officer or holder of more
than 5% of our common stock had or will have an interest, other than as
described in the transactions below.
Raifman & Edwards LLP
Gregory R. Raifman and Jon L. Edwards, two of our current executive
officers, are general partners of Raifman & Edwards LLP. In September 1996, we
issued 350,000 shares of our common stock to Raifman & Edwards LLP, at a
purchase price of $0.0001 per share, for a total purchase price of $35. In
July 1997, we issued a convertible promissory note to Raifman & Edwards LLP,
in consideration for past services rendered, for $64,569. This convertible
promissory note bore interest at a rate of 6% per annum, and had a due date of
July 1999. In March 1999, we converted the outstanding amount and accrued
interest of $6,458 into 947,009 shares of our common stock, at a conversion
rate of $0.075 per share, for a total purchase price of $71,027. In July 1998,
Michael Schwartz transferred a convertible promissory note, issued by us, to
Raifman & Edwards LLP, which in March 1999 was converted into 4,643,228 shares
of our common stock, at a conversion rate of $0.05 per share, for a total
purchase price of $23,216. On August 6, 1999, we issued to Raifman & Edwards
LLP 19,360 shares of our Series C preferred stock in exchange for cancellation
of existing debt in the amount of $69,502.
All shares initially issued to, or subsequently purchased by, Raifman &
Edwards LLP have been transferred to R&E Holdings, LLC, a limited liability
company in which Gregory R. Raifman and Jon L. Edwards are managing members.
On April 3, 2000, R&E Holdings, LLC distributed 5,138,453 shares to Jon L.
Edwards and 5,138,452 shares to Gregory R. Raifman.
PointBreak Ventures, LLC
Gregory R. Raifman and Jon L. Edwards are managing members of, and hold
substantial interest in, PointBreak Ventures, LLC. Walter Haefeker, a current
executive officer, also holds a substantial interest in PointBreak Ventures,
LLC. In October 1996, we issued 250,000 shares of our common stock to
PointBreak Ventures, LLC at a purchase price of $0.0001 per share for a total
purchase price of $25. On April 3, 2000 PointBreak Ventures, LLC distributed
62,500 shares to Gregory R. Raifman, 62,500 shares to Jon L. Edwards and
125,000 shares to Walter Haefeker.
Kuni Research Corporation
In December 1996, Mediaplex issued 800,000 shares of its common stock to
Kuni Research Corporation at a purchase price of $0.05 per share for a total
purchase price of $40,000. In February 1997, PointBreak Ventures, LLC, an
entity controlled by Gregory R. Raifman, Jon L. Edwards and Walter Haefeker,
entered into an agreement with Kuni Research Corporation, which provided that
PointBreak Ventures, LLC would render certain management services to Kuni
Research Corporation. Under the terms of that agreement, Kuni Research
Corporation, a limited partner of PointBreak Ventures, LLC, agreed to
distribute to PointBreak Ventures, LLC an amount equal to 20.0% of the
potential profits from investments made by Kuni Research Corporation or by
PointBreak Ventures, LLC on behalf of Kuni Research Corporation. On April 4,
2000, pursuant to its February 1996 agreement with PointBreak Ventures, LLC,
Kuni Research Corporation distributed 40,000 shares, 40,000 shares and 80,000
shares to Messrs. Raifman, Edwards and Haefeker, respectively, in
consideration for those past services.
CERTAIN BUSINESS RELATIONSHIPS
In May 1998, we entered into an oral agreement with Raifman & Edwards LLP to
sublease a portion of the office space we currently occupy at our headquarters
in San Francisco, California. The sublease terms and payments made by us to
Raifman & Edwards LLP are substantially similar to the lease terms and
payments made by Raifman & Edwards LLP to the landlord. Since May 1998, we
have paid Raifman & Edwards LLP a total of approximately $121,000 for these
lease payments.
20
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In connection with his employment by us in January 1999, we issued a warrant
to purchase 500,000 shares of our common stock at an exercise price of $0.50
per share to Timothy M. Favia, one of our current executive officers. Such
warrant is fully vested and exercisable and expires on January 11, 2002.
In connection with our acquisition of Netranscend Software, Inc. in March
1999, we issued to Ruiqing "Barclay" Jiang, one of our current executive
officers and formerly the sole shareholder of Netranscend Software, Inc., a
promissory note in the principal amount of $430,000, payable in four annual
installments, and an aggregate of 1,979,000 shares of common stock valued at
$2.6 million. Of the shares issued, 300,000 are currently being held in escrow
as security to cover potential breaches of representations and warranties made
by Mr. Jiang and Netranscend Software, Inc. in the agreement and plan of
reorganization executed in connection with the acquisition.
In February 1999, we sold an aggregate of 1,206,000 shares of series A
preferred stock to investors at a purchase price of $1.25 per share or
$1,507,500 in the aggregate. In June 1999, we sold an aggregate of 4,500,000
shares of series B preferred stock to investors at a purchase price of $2.00
per share or $9,000,000 in the aggregate. In August 1999, we sold an aggregate
of 4,000,000 shares of series C preferred stock to investors at a purchase
price of $3.59 per share or $14,360,000 in the aggregate. The shares of series
A, B and C preferred stock automatically converted into an aggregate of
9,706,000 shares of common stock upon the closing of our initial public
offering. The holders of converted shares of series C preferred stock are
entitled to demand and piggy-back registration rights.
The investors in the preferred stock included the following entities that
hold 5% or more of our stock or that are affiliated with our directors or
executive officers, or both:
SHARES OF SHARES OF SHARES OF
SERIES A SERIES B SERIES C AGGREGATE
PREFERRED PREFERRED PREFERRED PURCHASE
INVESTOR STOCK STOCK STOCK PRICE
-------- --------- --------- --------- ---------
5% Stockholder Entities Affiliated
with a Mediaplex Director
or Executive Officer:
Entity affiliated with James
DeSorrento (1)(2).................... 160,000 140,000 -- $ 480,000
Entity affiliated with A. Brooke
Seawell (1)(3)....................... -- 75,000 -- 150,000
Entity affiliated with Gregory R.
Raifman and
Jon L. Edwards (1)(4)................ -- -- 19,360 69,502
Entities affiliated with Lawrence D.
Lenihan, Jr. (1)(5).................. -- -- 1,671,309 5,999,999
Other 5% Stockholders
Zeron Capital Ltd. (6)............... -- 2,625,000 -- 5,250,000
(1) James DeSorrento, A. Brooke Seawell, Gregory R. Raifman, Jon L. Edwards
and Lawrence D. Lenihan, Jr. are each members of our board of directors.
(2) All shares are held of record by DeSorrento Revocable Trust under an
agreement dated 12/17/80.
(3) All shares are held of record by Seawell Revocable Trust, A. Brooke
Seawell & Patricia C. Seawell, trustees.
(4) All shares are held of record by R&E Holdings, LLC. Messrs. Gregory R.
Raifman and Jon L. Edwards are the managing members and beneficial owners
of R&E Holdings, LLC. Each of Mr. Raifman and Mr. Edwards disclaims
beneficial ownership of these shares, except to the extent of his
respective pecuniary interest therein.
(5) Represents 1,483,484 shares of series C preferred stock held of record by
Pequot Private Equity Fund, L.P. and 187,825 shares of series C preferred
stock held of record by Pequot Offshore Private Equity Fund, Inc. Mr.
Lenihan is the fund manager for Pequot Capital Management, Inc. He
disclaims beneficial ownership of these shares except to the extent of his
pecuniary interest therein.
21
(6) Includes 1,500,000 shares held of record by Odyssey Venture Partners and
1,000,000 shares held of record by Argossy Limited. Argossy Limited and
Odyssey Venture Partners are funds affiliated with Zeron Capital Ltd.
Zeron Capital Ltd. also holds a warrant to purchase 125,000 shares of
series B preferred stock.
In connection with the sale of our series B preferred stock in June 1999, we
issued a warrant to purchase 125,000 shares of series B preferred stock, at an
exercise price of $2.00 per share, to Zeron Capital, Ltd., a 5% stockholder.
The warrant is now exercisable for 125,000 shares of our common stock. The
warrant may be exercised at any time prior to its expiration in June 2002.
In connection with the sale of our series B preferred stock in June 1999 to
Zeron Capital, Ltd., we issued a warrant to purchase 150,000 shares of series
B preferred stock, at an exercise price of $2.00 per share, and a warrant to
purchase 100,000 shares of common stock, at a purchase price of $0.50 per
share, to Retail Ventures International, Inc., one of our financial advisors.
After our initial public offering, the warrant to purchase series B preferred
stock became exercisable for a like number of shares of our common stock. In
April 2000, both warrants were exercised for 242,938 shares of our common
stock using a net exercise provision.
22
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee is comprised of Peter S. Sealey and Lawrence D.
Lenihan, Jr., each who is a non-employee director. The Compensation Committee
sets, reviews and administers our executive compensation program. The role of
the Compensation Committee is to establish and recommend salaries and other
compensation paid to our executive officers and to administer our Amended and
Restated 1999 Stock Plan and 1999 Employee Stock Purchase Plan. The
Compensation Committee approves all stock option grants to executive officers,
all executive officer base salaries and any cash bonus payments to executive
officers and reviews all stock option grants to employees.
Our executive pay programs are designed to attract and retain executives who
will contribute to our long-term success, to mesh executive and stockholder
interest through stock option based plans and to provide a compensation
package that recognizes individual contributions and performance.
At this stage in our growth, the Compensation Committee has determined that
the most effective means of compensation are base salaries and long-term
incentives through our stock option programs.
BASE SALARIES
The base salaries of executive officers are initially determined by
evaluating the responsibilities of the position held and the experience and
performance of the individual, with reference to the competitive marketplace
for executive talent, including a comparison to base salaries for comparable
positions in high growth, technology-based companies of reasonably similar
size in the San Francisco bay area. To assist in the process, the Compensation
Committee reviews data from independent compensation consultants concerning
the compensation paid to officers of such companies. Based on these industry
surveys, the Compensation Committee has set most executive officers' salaries
at the midpoint of the range determined in the industry surveys. The
Compensation Committee reviews executive salaries annually and adjusts them as
appropriate to reflect changes in the market conditions and individual
performance and responsibility. During fiscal 1999, salaries for executive
officers were increased by $30,000 to $55,000, depending on the executive
officer.
STOCK OPTIONS
Under our Amended and Restated 1999 Stock Plan, stock options may be granted
to our executive officers and other employees. Upon joining us, an
individual's initial option grant is based on the individual's
responsibilities and position. The sizes of stock option awards are based
primarily on an individual's performance and responsibilities. Stock options
are granted at the fair market value of our common stock on the date of grant
which was determined by the Board of Directors prior to the initial public
offering and is now determined as the closing sales price of the common stock
on the Nasdaq National Market of The Nasdaq Stock Market. Because of the
competitive nature of the technology industry in which we compete, the
Compensation Committee believes stock option grants are an effective method of
incentivising executives to take a longer term view of our performance and to
ensure that the executive's and the stockholder's interests are aligned. In
1999, we granted an aggregate of 6,255,500 stock options under our Amended and
Restated 1999 Stock Plan to our executive officers, including 1,750,000 stock
options granted to Gregory R. Raifman, our Chief Executive Officer and
Chairman of the Board, and 1,500,000 Stock Options granted to Jon L. Edwards,
our President.
BONUSES
The discretionary bonuses awarded by the Compensation Committee to executive
officers are determined based on achievement of individual and company
performance goals. In 1999, through employment agreements, all executive
officers were eligible to participate in any management bonus plan or similar
incentive compensation program adopted by us. In 1999, our executive officers
earned an aggregate of $273,751 in bonuses pursuant to contractual
obligations.
BENEFITS
In 1999, we offered medical and life insurance benefits to our executive
officers that were substantially the same as those offered to all of our
regular employees.
We maintain a retirement and deferred savings plan, or 401(k) Plan, covering
our full-time employees, including executive officers. Under the 401(k) plan,
participants may elect to contribute, through salary
23
contributions, up to 20% of their annual compensation, subject to a statutory
maximum. During fiscal 1999, we did not match any employee contributions under
the 401(k) plan.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
During 1999, Gregory R. Raifman served as the Company's Chief Executive
Officer and Chairman of the Board of Directors.
In September 1999, the Compensation Committee increased Mr. Raifman's salary
from $210,000 to $250,000 and during 1999 he earned bonuses aggregating
$38,000. Prior to the August 1999 establishment of the Compensation Committee,
our Board of Directors granted Mr. Raifman an option to purchase 1,750,000
shares of our common stock. In determining Mr. Raifman's salary, the
Compensation Committee considered the same criteria it considered with respect
to the other executive officers. The Compensation Committee noted that in
1999, under Mr. Raifman's leadership, the Company successfully completed the
initial public offering of its common stock, significantly increased revenues,
developed significant strategic partnerships, and penetrated key agency
markets.
TAX LAW LIMITS ON EXECUTIVE COMPENSATION
The Compensation Committee has considered the potential impact of Section
162(m) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder. Section 162(m) disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1 million in any taxable
year for any of the executive officers, unless such compensation is
performance-based. Since the cash compensation of each of the executive
officers is below the $1 million threshold and the Compensation Committee
believes that any options granted under the Stock Plan will meet the
requirements of being performance-based, the Compensation Committee believes
that Section 162(m) will not reduce the tax deduction available to us. Our
policy is to qualify, to the extent reasonable, our executive officers'
compensation for deductability under applicable tax laws. However, the
Compensation Committee believes that its primary responsibility is to provide
a compensation program that will attract, retain and reward the executive
talent necessary to our success. Consequently, the Compensation Committee
recognizes that the loss of a tax deduction could be necessary in some
circumstances.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Peter S. Sealey
Lawrence D. Lenihan, Jr.
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PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total stockholder return
of $100 invested in our Common Stock on November 19, 1999 (the day our shares
commenced trading) through December 31, 1999 with the cumulative total return
of $100 invested in the Nasdaq Composite Index and a Self-Constructed Peer
Group Index calculated similarly for the same period.
COMPARISON OF 2-MONTH CUMULATIVE TOTAL RETURN*
AMONG MEDIAPLEX INC., THE NASDAQ COMPOSITE INDEX,
AND PEER GROUP (1)
* THE GRAPH ABOVE ASSUMES $100 INVESTED ON 11/19/99 IN MEDIAPLEX, INC., THE
NASDAQ COMPOSITE INDEX, AND THE PEER GROUP, INCLUDING REINVESTING OF
DIVIDENDS.
NASDAQ
COMPOSITE PEER
MEDIAPLEX, INC. INDEX GROUP
--------------- --------- -------
11/19/99................................... $100.00 $100.00 $100.00
12/31/99................................... $522.92 $120.78 $131.17
(1) Peer Group includes the following companies: DoubleClick Inc., 24/7 Media,
Inc., Engage Technologies, and Interpublic Group of Companies.
25
OTHER MATTERS
We know of no other matters to be submitted to the meeting. If any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed proxy to vote the shares they represent as our board of
directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares that you hold. You are, therefore, urged to execute
and return the accompanying proxy in the envelope that has been enclosed, at
your earliest convenience.
FOR THE BOARD OF DIRECTORS
Gregory R. Raifman
Chairman and Chief Executive Officer
May 11, 2000
26
ANNEX A
AMENDED AND RESTATED 1999 STOCK PLAN
1. Purposes of the Plan. The purposes of this Amended and Restated 1999
Stock Plan are:
. to attract and retain the best available personnel for positions of
substantial responsibility,
. to provide additional incentive to Employees, Directors and Consultants,
and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or
Stock Purchase Rights are, or will be, granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Mediaplex, Inc., a Delaware corporation.
(h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held
by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall
be sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such
stock (or the
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closing bid, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading
day prior to the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
(o) "Inside Director" means a Director who is an Employee.
(p) "Nonstatutory Stock Option" means an Option not intended to qualify
as an Incentive Stock Option.
(q) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase
Right grant. The Notice of Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the Plan.
(t) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(u) "Option Exchange Program" means a program whereby outstanding Options
are surrendered in exchange for Options with a lower exercise price.
(v) "Optioned Stock" means the Common Stock subject to an Option or Stock
Purchase Right.
(w) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.
(x) "Outside Director" means a Director who is not an Employee.
(y) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this Amended and Restated 1999 Stock Plan.
(aa) "Restricted Stock" means shares of Common Stock acquired pursuant to
a grant of Stock Purchase Rights under Section 11 of the Plan.
(bb) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted
Stock Purchase Agreement is subject to the terms and conditions of the Plan
and the Notice of Grant.
(cc) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect
to the Plan.
(dd) "Section 16(b) " means Section 16(b) of the Exchange Act.
(ee) "Service Provider" means an Employee, Director or Consultant.
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(ff) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 14 of the Plan.
(gg) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(hh) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 14 of the
Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is twelve million (12,000,000) Shares, plus an annual increase
to be added on the first day of the Company's fiscal year commencing in 2000
equal to the lesser of (i) 1,000,000 Shares, (ii) 4% of the outstanding Shares
of the Company's capital stock or (iii) such lesser amount as may be
determined by the Board of Directors. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued
under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by
the Company at their original purchase price, such Shares shall become
available for future grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be administered by
different Committees with respect to different groups of Service
Providers.
(ii) Section 162(m). To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m)
of the Code, the Plan shall be administered by a Committee of two or
more "outside directors" within the meaning of Section 162(m) of the
Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption
under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated by
the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be covered
by each Option and Stock Purchase Right granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not
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limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or
Stock Purchase Right or the shares of Common Stock relating thereto,
based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vi) to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was
granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to modify or amend each Option or Stock Purchase Right (subject
to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined.
All elections by an Optionee to have Shares withheld for this purpose
shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;
(xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase
Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or advisable
for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 6(a), Incentive Stock Options shall be taken into
account in the order in which they were granted. The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to
such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
A-4
(i) No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 500,000 Shares.
(ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 500,000
Shares which shall not count against the limit set forth in subsection
(i) above.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described
in Section 14.
(iv) If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Option will be counted against
the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction
will be treated as a cancellation of the Option and the grant of a new
Option.
7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a
term of ten (10) years unless terminated earlier under Section 16 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten
(10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years
from the date of grant or such shorter term as may be provided in the Option
Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(1) granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of
grant.
(2) granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of
a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per
Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with a
per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate
transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before
the Option may be exercised.
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(c) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the
time of grant. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than
six months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted hereunder shall be tolled during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized
by the Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the
Optionee or, if requested by the Optionee, in the name of the Optionee and
his or her spouse. Until the Shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue
(or cause to be issued) such Shares promptly after the Option is exercised.
No adjustment will be made for a dividend or other right for which the
record date is prior to the date the Shares are issued, except as provided
in Section 14 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period
of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option
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Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for three (3) months following the
Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in
the Option Agreement to the extent the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the
Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of
such Option as set forth in the Notice of Grant), by the Optionee's estate
or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date
of death. In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the
Optionee's termination. If, at the time of death, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately revert to the Plan. The Option may
be exercised by the executor or administrator of the Optionee's estate or,
if none, by the person(s) entitled to exercise the Option under the
Optionee's will or the laws of descent or distribution. If the Option is
not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing or electronically, by means of a Notice
of Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to
purchase, the price to be paid, and the time within which the offeree must
accept such offer. The offer shall be accepted by execution of a Restricted
Stock Purchase Agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate
determined by the Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.
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(d) Rights as a Stockholder. Once the Stock Purchase Right is exercised,
the purchaser shall have the rights equivalent to those of a stockholder,
and shall be a stockholder when his or her purchase is entered upon the
records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is
prior to the date the Stock Purchase Right is exercised, except as provided
in Section 13 of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Stock Purchase Right transferable,
such Option or Stock Purchase Right shall contain such additional terms and
conditions as the Administrator deems appropriate.
13. Formula Option Grants to Outside Directors. All grants of Options to
Outside Directors pursuant to this Section shall be automatic and
nondiscretionary and shall be made strictly in accordance with the following
provisions:
(a) All Options granted pursuant to this Section shall be Nonstatutory
Stock Options and, except as otherwise provided herein, shall be subject to
the other terms and conditions of the Plan.
(b) No person shall have any discretion to select which Outside Directors
shall be granted Options under this Section or to determine the number of
Shares to be covered by such Options.
(c) Each person who first becomes an Outside Director following the
effective date of this Plan, as determined in accordance with Section 7
hereof, shall be automatically granted an Option to purchase fifty thousand
(50,000) Shares (the "First Option") on the date on which such person first
becomes an Outside Director, whether through election by the stockholders
of the Company or appointment by the Board to fill a vacancy; provided,
however, that an Inside Director who ceases to be an Inside Director but
who remains a Director shall not receive a First Option.
(d) Each Outside Director shall be automatically granted an Option to
purchase ten thousand (10,000) Shares (a "Subsequent Option") on the date
of the annual meeting of the stockholders of the Company, if as of such
date, he or she shall have served on the Board for at least the preceding
six (6) months.
(e) Notwithstanding the provisions of subsections (c) and (d) hereof, any
exercise of an Option granted before the Company has obtained stockholder
approval of the Plan in accordance with Section 20 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in
accordance with Section 20 hereof.
(f) The terms of each Option granted pursuant to this Section shall be as
follows:
(i) the term of the Option shall be ten (10) years.
(ii) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the Option.
(iii) subject to Section 14 hereof, each Option granted pursuant to
this Section shall vest and become exercisable as to 25% of the Shares
subject to the Option on the first anniversary of its date of grant,
and as to 1/48th of the Shares subject to the Option each full month
thereafter, provided that the Optionee continues to serve as a Service
Provider on such dates.
14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to
A-8
which no Options or Stock Purchase Rights have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an Option
or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for 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,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; 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 Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, 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 thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Administrator shall notify each Optionee
as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10)
days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option would not otherwise be
exercisable. In addition, the Administrator may provide that any Company
repurchase option applicable to any Shares purchased upon exercise of an
Option or Stock Purchase Right shall lapse as to all such Shares, provided
the proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for
the Option or Stock Purchase Right, the Optionee shall fully vest in and
have the right to exercise the Option or Stock Purchase Right as to all of
the Optioned Stock, including Shares as to which it would not otherwise be
vested or exercisable. If an Option or Stock Purchase Right becomes fully
vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee
in writing or electronically that the Option or Stock Purchase Right shall
be fully vested and exercisable for a period of fifteen (15) days from the
date of such notice, and the Option or Stock Purchase Right shall terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option or Stock Purchase Right shall be considered assumed if, following
the merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option
or Stock Purchase Right immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for
each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by
the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received in the merger or sale of assets is not
solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, for each Share of Optioned Stock subject to the
Option or Stock Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
15. Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other
later date as is determined by the Administrator. Notice of the determination
shall be provided to each Optionee within a reasonable time after the date of
such grant.
A-9
16. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the
Optionee and the Company. Termination of the Plan shall not affect the
Administrator's ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such
termination.
17. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Option or Stock Purchase Right unless the exercise of such Option or
Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
Option or Stock Purchase Right, the Company may require the person
exercising such Option or Stock Purchase Right 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.
18. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
19. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
20. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan
is adopted. Such stockholder approval shall be obtained in the manner and to
the degree required under Applicable Laws.
A-10
[INSERT LOGO]
MEDIAPLEX, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
FRIDAY, JUNE 9, 2000
The undersigned hereby appoints Gregory R. Raifman and Alan M. Raifman, or
either of them, as proxies and attorneys-in-fact, each with full power of
substitution, to represent the undersigned at the Annual Meeting of Stockholders
of Mediaplex, Inc. to be held at Mediaplex's principal offices, at 177 Steuart
Street, San Francisco, California 94105, on June 9, 2000 at 10:00 a.m., local
time, and any adjournments or postponements thereof, and to vote the number of
shares the undersigned would be entitled to vote if personally present at the
meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH. In their discretion, the proxies
are authorized to vote upon such other business as may properly come before the
meeting or any adjournment thereof to the extent authorized by Rule 14a-4(c)
promulgated by the Securities and Exchange Commission.
(Continued and to be signed on the other side.)
MEDIAPLEX'S MANAGEMENT RECOMMENDS A VOTE FOR ALL THE NOMINEES FOR DIRECTOR
LISTED BELOW AND A VOTE "FOR" PROPOSALS 2 AND 3.
Proposal 1: To elect directors to hold office for three years or until their
successors are elected.
FOR all nominees listed at WITHHOLD AUTHORITY Nominees: Lawrence D. Lenihan, Jr. and
right (except as marked to to vote FOR ALL nominees Peter S. Sealey
the contrary) listed at right.
To withhold authority to vote for any
[ ] [ ] nominee(s), write such nominee(s)'
name(s) below:
----------------------------------------
Proposal 2: To ratify and approve amendments to Mediaplex's Amended and
Restated 1999 Stock Plan to: (i) increase the number of shares
reserved for issuance thereunder by 1,000,000 shares and (ii)
provide for a higher annual increase, to be added on the first day
of the fiscal year commencing in 2001, equal to the lesser of (a)
2,500,000 shares, (b) 5% of the outstanding shares of Mediaplex's
capital stock, or (c) such lesser amount as may be determined by
Mediaplex's board of directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 3: To ratify the selection of PricewaterhouseCoopers LLP as
Mediaplex's independent accountants for the year ended December 31,
2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Sign exactly as your name(s) appears on your stock certificate. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign this Proxy. If shares of stock are held of record by a
corporation, the Proxy should be executed by the President or Vice President,
and by the Secretary or Assistant Secretary. Executors or administrators or
other fiduciaries who execute the above Proxy for a deceased Stockholder should
give their full title.
Please date the Proxy.
Signature: _________________________
Signature: _________________________
Date: _________________________
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO SIGN
AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO THAT YOUR STOCK MAY BE
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