Exhibit 4.1


 


DEL.ICIO.US,
INC. 2005 STOCK PLAN


 


SECTION 1. ESTABLISHMENT AND
PURPOSE.


 


The
purpose of the Plan is to offer selected persons an opportunity to acquire a
proprietary interest in the success of the Company, or to increase such
interest, by purchasing Shares of the Company’s Stock. The Plan provides both
for the direct award or sale of Shares and for the grant of Options to purchase
Shares. Options granted under the Plan may include Nonstatutory Options as well
as ISOs intended to qualify under Section 422 of the Code.


 


Capitalized
terms are defined in Section 12.


 


SECTION 2. ADMINISTRATION.


 


(a)           Committees of the Board of
Directors. The Plan may be administered by one or more Committees. Each
Committee shall consist of one or more members of the Board of Directors who
have been appointed by the Board of Directors. Each Committee shall have such
authority and be responsible for such functions as the Board of Directors has
assigned to it. If no Committee has been appointed, the entire Board of Directors
shall administer the Plan. Any reference to the Board of Directors in the Plan
shall be construed as a reference to the Committee (if any) to whom the Board
of Directors has assigned a particular function.


 


(b)           Authority of the Board of
Directors. Subject to the provisions of the Plan, the Board of
Directors shall have full authority and discretion to take any actions it deems
necessary or advisable for the administration of the Plan. All decisions,
interpretations and other actions of the Board of Directors shall be final and
binding on all Purchasers, all Optionees and all persons deriving their rights
from a Purchaser or Optionee.


 


SECTION 3. ELIGIBILITY.


 


(a)           General Rule. Only
Employees, Outside Directors and Consultants shall be eligible for the grant of
Nonstatutory Options or the direct award or sale of Shares. Only Employees
shall be eligible for the grant of ISOs.


 


(b)           Ten-Percent Stockholders.
A person who owns more than 10% of the total combined voting power of all
classes of outstanding stock of the Company, its Parent or any of its
Subsidiaries shall not be eligible for the grant of an ISO unless (i) the
Exercise Price is at least 110% of the Fair Market Value of a Share on the date
of grant and (ii) such ISO by its terms is not exercisable after the expiration
of five years from the date of grant. For purposes of this Subsection (b), in
determining stock ownership, the attribution rules of Section 424(d) of the
Code shall be applied.


 


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SECTION 4. STOCK SUBJECT TO PLAN.


 


(a)           Basic Limitation.
Not more than 700,000 Shares may be issued under the Plan (subject to
Subsection (b) below and Section 8). All of these Shares may be issued upon the
exercise of ISOs. The number of Shares that are subject to Options or other
rights outstanding at any time under the Plan shall not exceed the number of
Shares that then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan. Shares offered under
the Plan may be authorized but unissued Shares or treasury Shares.


 


(b)           Additional Shares.
In the event that Shares previously issued under the Plan are reacquired by the
Company, such Shares shall be added to the number of Shares then available for
issuance under the Plan. In the event that an outstanding Option or other right
for any reason expires or is canceled, the Shares allocable to the unexercised
portion of such Option or other right shall be added to the number of Shares
then available for issuance under the Plan.


 


SECTION 5. TERMS AND CONDITIONS
OF AWARDS OR SALES.


 


(a)           Stock Purchase Agreement.
Each award or sale of Shares under the Plan (other than upon exercise of an
Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser
and the Company. Such award or sale shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Board of Directors deems
appropriate for inclusion in a Stock Purchase Agreement. The provisions of the
various Stock Purchase Agreements entered into under the Plan need not be
identical.


 


(b)           Duration of Offers and
Nontransferability of Rights. Any right to acquire Shares under the
Plan (other than an Option) shall automatically expire if not exercised by the
Purchaser within 30 days after the grant of such right was communicated to the
Purchaser by the Company. Such right shall not be transferable and shall be
exercisable only by the Purchaser to whom such right was granted.


 


(c)           Purchase Price.
The Purchase Price of Shares to be offered under the Plan, if newly issued,
shall not be less than the par value of such Shares. Subject to the preceding
sentence, the Board of Directors shall determine the Purchase Price at its sole
discretion. The Purchase Price shall be payable in a form described in Section
7.


 


(d)           Withholding Taxes.
As a condition to the purchase of Shares, the Purchaser shall make such
arrangements as the Board of Directors may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with such purchase.


 


(e)           Restrictions on Transfer
of Shares. Any Shares awarded or sold under the Plan shall be
subject to such special forfeiture conditions, rights of repurchase, rights of
first refusal and other transfer restrictions as the Board of Directors may
determine. Such restrictions shall be set forth in the applicable Stock
Purchase Agreement and shall apply in addition to any restrictions that may
apply to holders of Shares generally. A Stock Purchase Agreement may


 


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provide
for accelerated vesting in the event of the Purchaser’s death, disability or
retirement or other events.


 


SECTION 6. TERMS AND CONDITIONS
OF OPTIONS.


 


(a)           Stock Option Agreement.
Each grant of an Option under the Plan shall be evidenced by a Stock Option
Agreement between the Optionee and the Company. Such Option shall be subject to
all applicable terms and conditions of the Plan and may be subject to any other
terms and conditions which are not inconsistent with the Plan and which the
Board of Directors deems appropriate for inclusion in a Stock Option Agreement.
The provisions of the various Stock Option Agreements entered into under the
Plan need not be identical.


 


(b)           Number of Shares.
Each Stock Option Agreement shall specify the number of Shares that are subject
to the Option and shall provide for the adjustment of such number in accordance
with Section 8. The Stock Option Agreement shall also specify whether the
Option is an ISO or a Nonstatutory Option.


 


(c)           Exercise Price.
Each Stock Option Agreement shall specify the Exercise Price. The Exercise
Price of an ISO shall not be less than 100% of the Fair Market Value of a Share
on the date of grant, and a higher percentage may be required by Section 3(b). The
Exercise Price of a Nonstatutory Option to purchase newly issued Shares shall
not be less than 30% of the Fair Market Value of a Share on the date of grant. Subject
to the preceding two sentences, the Exercise Price under an Option shall be
determined by the Board of Directors at its sole discretion. The Exercise Price
shall be payable in a form described in Section 7.


 


(d)           Exercisability.
Each Stock Option Agreement shall specify the date when all or any installment
of the Option is to become exercisable. No Option shall be exercisable unless
the Optionee has delivered an executed copy of the Stock Option Agreement to
the Company. The Board of Directors shall determine the exercisability
provisions of any Stock Option Agreement at its sole discretion. All of an
Optionee’s Options shall become exercisable in full if Section 8(b)(iv)
applies.


 


(e)           Term. The Stock
Option Agreement shall specify the term of the Option. The term shall not
exceed 10 years from the date of grant, and in the case of an ISO a shorter
term may be required by Section 3(b). Subject to the preceding sentence, the
Board of Directors at its sole discretion shall determine when an Option is to
expire. A Stock Option Agreement may provide for expiration prior to the end of
its term in the event of the termination of the Optionee’s Service or death.


 


(f)            Restrictions on Transfer
of Shares. Any Shares issued upon exercise of an Option shall be
subject to such special forfeiture conditions, rights of repurchase, rights of
first refusal and other transfer restrictions as the Board of Directors may
determine. Such restrictions shall be set forth in the applicable Stock Option
Agreement and shall apply in addition to any restrictions that may apply to
holders of Shares generally.


 


(g)           Transferability of Options.
An Option shall be transferable by the Optionee only by (i) a beneficiary
designation, (ii) a will or (iii) the laws of descent and


 


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distribution,
except as provided in the next sentence. If the applicable Stock Option
Agreement so provides, a Nonstatutory Option shall also be transferable by gift
or domestic relations order to a Family Member of the Optionee. An ISO may be
exercised during the lifetime of the Optionee only by the Optionee or by the
Optionee’s guardian or legal representative.


 


(h)           Withholding Taxes.
As a condition to the exercise of an Option, the Optionee shall make such
arrangements as the Board of Directors may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with such exercise. The Optionee shall also make such arrangements
as the Board of Directors may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.


 


(i)            No Rights as a Stockholder.
An Optionee, or a transferee of an Optionee, shall have no rights as a
stockholder with respect to any Shares covered by the Optionee’s Option until
such person becomes entitled to receive such Shares by filing a notice of
exercise and paying the Exercise Price pursuant to the terms of such Option.


 


(j)            Modification, Extension
and Assumption of Options. Within the limitations of the Plan, the
Board of Directors may modify, extend or assume outstanding Options or may
accept the cancellation of outstanding Options (whether granted by the Company or
another issuer) in return for the grant of new Options for the same or a
different number of Shares and at the same or a different Exercise Price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s
obligations under such Option.


 


SECTION 7. PAYMENT FOR SHARES.


 


(a)           General Rule. The
entire Purchase Price or Exercise Price of Shares issued under the Plan shall
be payable in cash or cash equivalents at the time when such Shares are
purchased, except as otherwise provided in this Section 7.


 


(b)           Surrender of Stock.
At the discretion of the Board of Directors, all or any part of the Exercise
Price may be paid by surrendering, or attesting to the ownership of, Shares
that are already owned by the Optionee. Such Shares shall be surrendered to the
Company in good form for transfer and shall be valued at their Fair Market
Value on the date when the Option is exercised. The Optionee shall not
surrender, or attest to the ownership of, Shares in payment of the Exercise
Price if such action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to the Option for financial
reporting purposes.


 


(c)           Services Rendered.
At the discretion of the Board of Directors, Shares may be awarded under the
Plan in consideration of services rendered to the Company, a Parent or a
Subsidiary prior to the award.


 


(d)           Promissory Note.
At the discretion of the Board of Directors, all or a portion of the Exercise
Price or Purchase Price (as the case may be) of Shares issued under the Plan
may be paid with a full-recourse promissory note. The Shares shall be pledged
as security


 


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for
payment of the principal amount of the promissory note and interest thereon. The
interest rate payable under the terms of the promissory note shall not be less
than the minimum rate (if any) required to avoid (i) the imputation of
additional interest under the Code and (ii) the recognition of compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes. Subject to the foregoing, the Board of Directors
(at its sole discretion) shall specify the term, interest rate, amortization
requirements (if any) and other provisions of such note.


 


(e)           Exercise/Sale. To
the extent that a Stock Option Agreement so provides, and if Stock is publicly
traded, payment may be made all or in part by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes.


 


(f)            Exercise/Pledge.
To the extent that a Stock Option Agreement so provides, and if Stock is
publicly traded, payment may be made all or in part by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company, as security for a loan,
and to deliver all or part of the loan proceeds to the Company in payment of
all or part of the Exercise Price and any withholding taxes.


 


(g)           Other Forms of Payment.
At the discretion of the Board of Directors, the Purchase Price or Exercise
Price of Shares issued under the Plan may be paid in any other form permitted
by the Delaware General Corporation Law, as amended.


 


SECTION 8. ADJUSTMENT OF SHARES.


 


(a)           General. In the
event of a subdivision of the outstanding Stock, a declaration of a dividend
payable in Shares or a combination or consolidation of the outstanding Stock
into a lesser number of Shares, corresponding adjustments shall automatically
be made in each of (i) the number of Shares available for future grants under
Section 4, (ii) the number of Shares covered by each outstanding Option and
(iii) the Exercise Price under each outstanding Option. In the event of a
declaration of an extraordinary dividend payable in a form other than Shares in
an amount that has a material effect on the Fair Market Value of the Stock, a
recapitalization, a spin-off, a reclassification or a similar occurrence, the
Board of Directors at its sole discretion may make appropriate adjustments in
one or more of (i) the number of Shares available for future grants under
Section 4, (ii) the number of Shares covered by each outstanding Option or
(iii) the Exercise Price under each outstanding Option.


 


(b)           Mergers and Consolidations.
In the event that the Company is a party to a merger or consolidation, all
outstanding Options shall be subject to the agreement of merger or
consolidation. Such agreement shall provide for one or more of the following:


 


(i)            The
continuation of such outstanding Options by the Company (if the Company is the
surviving corporation).


 


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(ii)           The
assumption of such outstanding Options by the surviving corporation or its
parent in a manner that complies with Section 424(a) of the Code (whether or
not such Options are ISOs).


 


(iii)          The
substitution by the surviving corporation or its parent of new options for such
outstanding Options in a manner that complies with Section 424(a) of the Code
(whether or not such Options are ISOs).


 


(iv)          Full
exercisability of such outstanding Options and full vesting of the Shares
subject to such Options, followed by the cancellation of such Options. The full
exercisability of such Options and full vesting of the Shares subject to such
Options may be contingent on the closing of such merger or consolidation. The
Optionees shall be able to exercise such Options during a period of not less
than five full business days preceding the closing date of such merger or
consolidation, unless (A) a shorter period is required to permit a timely
closing of such merger or consolidation and (B) such shorter period still
offers the Optionees a reasonable opportunity to exercise such Options. Any
exercise of such Options during such period may be contingent on the closing of
such merger or consolidation.


 


(v)           The
cancellation of such outstanding Options and a payment to the Optionees equal
to the excess of (A) the Fair Market Value of the Shares subject to such
Options (whether or not such Options are then exercisable or such Shares are
then vested) as of the closing date of such merger or consolidation over (B)
their Exercise Price. Such payment shall be made in the form of cash, cash
equivalents, or securities of the surviving corporation or its parent with a
Fair Market Value equal to the required amount. Such payment may be made in
installments and may be deferred until the date or dates when such Options
would have become exercisable or such Shares would have vested. Such payment
may be subject to vesting based on the Optionee’s continuing Service, provided
that the vesting schedule shall not be less favorable to the Optionees than the
schedule under which such Options would have become exercisable or such Shares
would have vested. If the Exercise Price of the Shares subject to such Options
exceeds the Fair Market Value of such Shares, then such Options may be
cancelled without making a payment to the Optionees. For purposes of this
Paragraph (v), the Fair Market Value of any security shall be determined
without regard to any vesting conditions that may apply to such security.


 


SECTION 9. SECURITIES LAW
REQUIREMENTS.


 


Shares
shall not be issued under the Plan unless the issuance and delivery of such
Shares comply with (or are exempt from) all applicable requirements of law,
including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange or other securities
market on which the Company’s securities may then be traded.


 


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SECTION 10. NO RETENTION RIGHTS.


 


Nothing
in the Plan or in any right or Option granted under the Plan shall confer upon
the Purchaser or Optionee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any Parent or Subsidiary employing or retaining the
Purchaser or Optionee) or of the Purchaser or Optionee, which rights are hereby
expressly reserved by each, to terminate his or her Service at any time and for
any reason, with or without cause.


 


SECTION 11. DURATION AND
AMENDMENTS.


 


(a)           Term of the Plan.
The Plan, as set forth herein, shall become effective on the date of its
adoption by the Board of Directors, subject to the approval of the Company’s
stockholders. If the stockholders fail to approve the Plan within 12 months
after its adoption by the Board of Directors, then any grants, exercises or
sales that have already occurred under the Plan shall be rescinded and no
additional grants, exercises or sales shall thereafter be made under the Plan. The
Plan shall terminate automatically 10 years after the later of (i) its adoption
by the Board of Directors or (ii) the most recent increase in the number of
Shares reserved under Section 4 that was approved by the Company’s stockholders.
The Plan may be terminated on any earlier date pursuant to Subsection (b)
below.


 


(b)           Right to Amend or
Terminate the Plan. The Board of Directors may amend, suspend or
terminate the Plan at any time and for any reason; provided, however, that any
amendment of the Plan shall be subject to the approval of the Company’s stockholders
if it (i) increases the number of Shares available for issuance under the Plan
(except as provided in Section 8) or (ii) materially changes the class of
persons who are eligible for the grant of ISOs. Stockholder approval shall not
be required for any other amendment of the Plan. If the stockholders fail to
approve an increase in the number of Shares reserved under Section 4 within 12
months after its adoption by the Board of Directors, then any grants, exercises
or sales that have already occurred in reliance on such increase shall be
rescinded and no additional grants, exercises or sales shall thereafter be made
in reliance on such increase.


 


(c)           Effect of Amendment or
Termination. No Shares shall be issued or sold under the Plan after
the termination thereof, except upon exercise of an Option granted prior to
such termination. The termination of the Plan, or any amendment thereof, shall
not affect any Share previously issued or any Option previously granted under
the Plan.


 


SECTION 12. DEFINITIONS.


 


(a)           “Board of Directors”
shall mean the Board of Directors of the Company, as constituted from time to
time.


 


(b)           “Code” shall
mean the Internal Revenue Code of 1986, as amended.


 


(c)           “Committee”
shall mean a committee of the Board of Directors, as described in Section 2(a).


 


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(d)           “Company” shall
mean del.icio.us, Inc., a Delaware corporation.


 


(e)           “Consultant”
shall mean a person who performs bona fide services for the Company, a Parent
or a Subsidiary as a consultant or advisor, excluding Employees and Outside
Directors.


 


(f)            “Employee”
shall mean any individual who is a common-law employee of the Company, a Parent
or a Subsidiary.


 


(g)           “Exercise Price”
shall mean the amount for which one Share may be purchased upon exercise of an
Option, as specified by the Board of Directors in the applicable Stock Option
Agreement.


 


(h)           “Fair Market Value”
shall mean the fair market value of a Share, as determined by the Board of
Directors in good faith. Such determination shall be conclusive and binding on
all persons.


 


(i)            “Family
Member” shall mean (i) any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, (ii) any person sharing the
Optionee’s household (other than a tenant or employee), (iii) a trust in which
persons described in Clause (i) or (ii) have more than 50% of the beneficial interest,
(iv) a foundation in which persons described in Clause (i) or (ii) or the
Optionee control the management of assets and (v) any other entity in which
persons described in Clause (i) or (ii) or the Optionee own more than 50% of
the voting interests.


 


(j)            “ISO”
shall mean an employee incentive stock option described in Section 422(b) of
the Code.


 


(k)           “Nonstatutory Option”
shall mean a stock option not described in Sections 422(b) or 423(b) of the
Code.


 


(l)            “Option”
shall mean an ISO or Nonstatutory Option granted under the Plan and entitling
the holder to purchase Shares.


 


(m)          “Optionee” shall
mean a person who holds an Option.


 


(n)           “Outside Director”
shall mean a member of the Board of Directors who is not an Employee.


 


(o)           “Parent” shall
mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than
the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such date.


 


(p)           “Plan” shall
mean this del.icio.us, Inc. 2005 Stock Plan.


 


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(q)           “Purchase Price”
shall mean the consideration for which one Share may be acquired under the Plan
(other than upon exercise of an Option), as specified by the Board of
Directors.


 


(r)            “Purchaser”
shall mean a person to whom the Board of Directors has offered the right to
acquire Shares under the Plan (other than upon exercise of an Option).


 


(s)           “Service” shall
mean service as an Employee, Outside Director or Consultant.


 


(t)            “Share”
shall mean one share of Stock, as adjusted in accordance with Section 8 (if
applicable).


 


(u)           “Stock” shall
mean the Common Stock of the Company, with a par value of $0.0001 per Share.


 


(v)           “Stock Option Agreement”
shall mean the agreement between the Company and an Optionee that contains the
terms, conditions and restrictions pertaining to the Optionee’s Option.


 


(w)          “Stock Purchase Agreement”
shall mean the agreement between the Company and a Purchaser who acquires
Shares under the Plan that contains the terms, conditions and restrictions
pertaining to the acquisition of such Shares.


 


(x)            “Subsidiary”
shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a
Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.


 


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