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Exhibit 10.03
QUOKKA SPORTS, INC.
1997 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
(INCENTIVE AND NONSTATUTORY STOCK OPTIONS)
Pursuant to the Stock Option Grant Notice ("Grant Notice") and this
Stock Option Agreement, Quokka Sports, Inc. (the "Company") has granted you an
option under its 1997 Equity Incentive Plan (the "Plan") to purchase the number
of shares of the Company's Common Stock indicated in the Grant Notice at the
exercise price indicated in the Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.
The details of your option are as follows:
1. VESTING. Subject to the limitations contained herein, your
option will vest as provided in the Grant Notice, provided that vesting will
cease upon the termination of your Continuous Status as an Employee, Director or
Consultant.
2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares
subject to your option and your exercise price per share referenced in the Grant
Notice may be adjusted from time to time for Capitalization Adjustments, as
provided in the Plan.
3. INCENTIVE STOCK OPTION $100,000 LIMITATION. As stated in Section
10(d) of the Plan, to the extent that the aggregate Fair Market Value
(determined at the time of grant) of stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any
calendar year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), the Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Nonstatutory Stock Options.
4. EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in
your Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise"
of your option is permitted) and subject to the provisions of your option, you
may elect at any time that is both (i) during the period of your Continuous
Service and (ii) during the term of your option, to exercise all or part of your
option, including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to
cover first vested shares of Common Stock and then the earliest vesting
installment of unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from
installments that have not vested as of the date of exercise shall be subject to
the purchase option in favor of the Company as described in the Company's form
of Early Exercise Stock Purchase Agreement;
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(c) you shall enter into the Company's form of Early Exercise Stock
Purchase Agreement with a vesting schedule that will result in the same vesting
as if no early exercise had occurred:
(d) this option shall not be exercisable under this paragraph 4 to
the extent such exercise would cause the aggregate fair market value of any
shares subject to incentive stock options granted to you by the Company or any
Affiliate of the Company (valued as of their grant date) which would become
exercisable for the first time during any calendar year to exceed $100,000 (the
"ISO Exercise Limitation"); and
(e) Notwithstanding Section 4(d), above, the ISO Exercise Limitation
shall terminate, and you may exercise your Incentive Stock Option with respect
to any shares of Common Stock that vest during each year in which an ISO
Exercise Limitation is imposed. Upon such termination of the ISO Exercise
Limitation, your option shall be deemed a Nonstatutory Stock Option to the
extent of the number of shares of Common Stock subject to your option that would
otherwise exceed the ISO Exercise Limitation.
5. METHOD OF PAYMENT. Payment of the exercise price is due in full upon
exercise of all or any part of your option. You may elect to make payment of
the exercise price in cash or by check or in any other manner PERMITTED BY THE
GRANT NOTICE, which may include one or more of the following:
(a) In the Company's sole discretion at the time your option is
exercised and provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve
Board which, prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of irrevocable
instructions to pay the aggregate exercise price to the Company from sales
proceeds.
(b) Provided that at the time of exercise the Common Stock is
publicly traded and quoted regularly in The Wall Street Journal, by delivery of
already-owned shares of Common Stock, held for the period required to avoid a
charge to the Company's reported earnings (generally six months) or were not
acquired, directly or indirectly from the Company, owned free and clear of any
liens, claims, encumbrances or security interests, and valued at its Fair
Market Value on the date of exercise. "Delivery" for these purposes, in the
sole discretion of the Company at the time your option is exercised, shall
include delivery to the Company of your attestation of ownership of such shares
of Common Stock in a form approved by the Company. Notwithstanding the
foregoing, your option may not be exercised by tender to the Company of Common
Stock to the extent such tender would constitute a violation of the provisions
of any law, regulation or agreement restricting the redemption of the Company's
stock.
6. WHOLE SHARES. Your option may only be exercised for whole shares.
7. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, your option may not be exercised unless the shares issuable
upon exercise of
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your option are then registered under the Securities Act or, if such shares are
not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Securities
Act. The exercise of your option must also comply with other applicable laws
and regulations governing the option, and the option may not be exercised if
the Company determines that the exercise would not be in material compliance
with such laws and regulations.
8. TERMS. The term of your option commences on the Date of Grant and
expires upon the EARLIEST of the following:
(a) three (3) months after the termination of your Continuous Status
as an Employee, Director or Consultant for any reason other than your
Disability or your death, provided that if during any part of such three (3)
month period the option is not exercisable solely because of the condition set
forth in paragraph 7, the option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period
of three (3) months after the termination of your Continuous Status as an
Employee, Director or Consultant;
(b) twelve (12) months after the termination of your Continuous
Status as an Employee, Director or Consultant due to Disability;
(c) eighteen (18) months after your death if you die either during
your Continuous Status as an Employee, Director or Consultant or within three
(3) months after your Continuous Status as an Employee, Director or Consultant
terminates,
(d) the Expiration Date indicated in the Grant Notice; or
(e) the tenth (10th) anniversary of the Date of ▇▇▇▇▇.
If your option is an incentive stock option, note that, to obtain the
federal income tax advantages associated with an "incentive stock option," the
Code requires that at all times beginning on the date of grant of the option
and ending on the day three (3) months before the date of the option's
exercise, you must be an employee of the Company or an Affiliate, except in the
event of your death or your Disability. The Company has provided for extended
exercisability of your option under certain circumstances for your benefit, but
cannot guarantee that your option will necessarily be treated as an "incentive
stock option" if you provide services to the Company or an Affiliate as a
Consultant or Director or if you exercise your option more than three (3)
months after the date your employment with the Company or an Affiliate
terminates.
9. EXERCISE.
(a) You may exercise the vested portion of your option (and the
unvested portion of your option if the Grant Notice so permits) during its term
by delivering a Notice of Exercise (in a form designated by the Company)
together with the exercise price to the Secretary
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of the Company, or to such other person as the Company may designate, during
regular business hours, together with such additional documents as the Company
may then require.
(b) By exercising your option you agree that, as a condition to any
exercise of your option, the Company may require you to enter an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of your option,
(2) the lapse of any substantial risk of forfeiture to which the shares are
subject at the time of exercise, or (3) the disposition of shares acquired upon
such exercise.
(c) If your option is an incentive stock option, by exercising your
option you agree that you will notify the Company in writing within fifteen
(15) days after the date of any disposition of any of the shares of the Common
Stock issued upon exercise of your option that occurs within two (2) years
after the date of your option grant or within one (1) year after such shares of
Common Stock are transferred upon exercise of your option.
(d) By exercising your option you agree that the Company (or a
representative of the underwriters) may, in connection with the first
underwritten registration of the offering of any securities of the Company
under the Securities Act, require that you not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, any
shares of Common Stock or other securities of the Company held by you, for a
period of time specified by the underwriter(s) (not to exceed one hundred
eighty (180) days) following the effective date of the registration statement
of the Company filed under the Securities Act. You further agree to execute and
deliver such other agreements as may be reasonably requested by the Company
and/or the underwriter(s) which are consistent with the foregoing or which are
necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to
your Common Stock until the end of such period.
10. TRANSFERABILITY. Your option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.
11. RIGHT OF FIRST REFUSAL/RIGHT OF REPURCHASE. Vested shares that are
received upon exercise of your option are subject to any right of first refusal
that may be described in the Company's bylaws in effect at such time the
Company elects to exercise its right. The Company's right of first refusal
shall expire on the date of the first registration of an equity security of the
Company under Section 12 of the Exchange Act. In addition, to the extent
provided in the Company's bylaws, as amended from time to time, and any Early
Exercise Stock Purchase Agreement, the Company shall have the right to
repurchase all or any part of the shares received pursuant to the exercise of
your option.
12. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the
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Company or an Affiliate to continue your employment. In addition, nothing in
your option shall obligate the Company, or an Affiliate, their respective
shareholders, Boards of Directors, Officers or Employees to continue any
relationship that you might have as a Director or Consultant for the Company or
an Affiliate.
13. WITHHOLDING OBLIGATIONS.
(a) At the time your option is exercised, in whole or in part, or at
any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for (including by means of a "cashless
exercise" pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with your option.
(b) Upon your request and subject to approval by the Company, in its
sole discretion, and compliance with any applicable conditions or restrictions
of law, the Company may withhold from fully vested shares of Common Stock
otherwise issuable to you upon the exercise of your option a number of whole
shares having a Fair Market Value, determined by the Company as of the date of
exercise, not in excess of the minimum amount of tax required to be withheld by
law. If the date of determination of any tax withholding obligation is deferred
to a date later than the date of exercise of your option, share withholding
pursuant to the preceding sentence shall not be permitted unless you make a
proper and timely election under Section 83(b) of the Code, covering the
aggregate number of shares of Common Stock acquired upon such exercise with
respect to which such determination is otherwise deferred, to accelerate the
determination of such tax withholding obligation to the date of exercise of
your option. Notwithstanding the filing of such election, shares shall be
withheld solely from fully vested shares of Common Stock determined as of the
date of exercise of your option that are otherwise issuable to you upon such
exercise. Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.
(c) Your option is not exercisable unless the tax withholding
obligations of the Company and/or any Affiliate are satisfied. Accordingly, you
may not be able to exercise your option when desired even though your option is
vested, and the Company shall have no obligation to issue a certificate for
such shares or release such shares from any escrow provided for herein.
14. NOTICES. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
15. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option, and
is further subject to all interpretations, amendments, rules and regulations
which may from time to time be promulgated
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and adopted pursuant to the Plan. In the event of any conflict between the
provisions of your option and those of the Plan, the provisions of the Plan
shall control.
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