Exhibit 4.8
SOMBASA MEDIA INC.
INCENTIVE STOCK OPTION AGREEMENT
1999 Stock Plan
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Name of Participant
SOMBASA MEDIA INC.
INCENTIVE STOCK OPTION AGREEMENT
1999 Stock Plan
THIS AGREEMENT is entered into by and between Sombasa Media Inc., a
Delaware corporation with its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter the "Company"), and the undersigned
employee of the Company (hereinafter the "Participant").
WHEREAS, the Participant renders important services as an employee of
the Company of the type specified on the signature page below (such services to
be collectively herein referred to as "Service"), and the Company desires to
grant an incentive stock option to the Participant;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the parties hereto hereby agree as follows:
1. GRANT, EXERCISABILITY AND TERM OF OPTION.
(a) The Company hereby grants to the Participant pursuant to the 1999
Stock Plan (the "Plan"), a copy of which is attached as EXHIBIT 1, the option
(the "Option") to purchase from the Company upon the terms and conditions
hereinafter set forth the number of shares ("Shares") of the common stock, $0.01
par value ("Common Stock"), of the Company set forth on the signature page below
at the purchase price per Share so set forth (the "Option Price"). The date of
grant of this Option is the date set forth at the execution page of this
Agreement as the "Option Date."
(b) This Option may be exercised only as to Shares which are "Vested
Shares," as defined in Section 5, at the time of exercise, and such exercise is
subject to any other restrictions provided in Section 5. This option shall
expire on the tenth anniversary of the Option Date, unless the Option is sooner
terminated as hereinafter specified. Only whole Shares may be purchased pursuant
to this Option.
2. CONDITIONS AND LIMITATIONS.
(a) The Option is granted on the condition that the purchase of shares
hereunder shall be for investment purposes and not with a view to resale or
distribution, except that such condition shall be inoperative if the offering of
Shares subject to the Option is registered under the Securities Act of 1933, as
amended, or if in the opinion of counsel for the Company such
Shares may be resold without registration. At the time of the exercise of the
Option or any installment thereof, the Participant will execute an Incentive
Stock Option Exercise Form in the form attached as EXHIBIT 2 and such further
agreements as the Company may require to implement the foregoing condition and
to acknowledge the Participant's familiarity with restrictions on the resale of
the Shares under applicable securities laws, and the Company may stamp such
legend on the certificate representing the Shares as may be necessary or
appropriate in light of the foregoing condition.
(b) The Company will furnish upon request of the Participant copies of
the Certificate of Incorporation of the Company, as amended (the "Certificate of
Incorporation"), and bylaws of the Company, as amended (the "Bylaws"), such
publicly available financial and other information concerning the Company and
its business and prospects as may be reasonably requested by the Participant in
connection with exercise of this Option (and such other financial and other
information concerning the Company as may be required to be delivered to
Optionees from time to time pursuant to applicable laws).
(c) The Option shall not be transferable otherwise than by will or by
the laws of descent and distribution, and except as provided in Section 4 the
Option shall be exercisable during the lifetime of the Participant by the
Participant only. Notwithstanding the foregoing, however, if the Participant is
determined to be mentally incompetent and a guardian or conservator (or other
similar person) is appointed by a court of competent jurisdiction to manage the
Participant's affairs, the guardian or conservator (or other similar person) may
exercise the Option on behalf of the Participant, provided that such exercise is
made within the time limits prescribed herein.
(d) The Option granted in this Agreement is subject to the terms,
conditions and definitions of the Plan. To the extent that the terms, conditions
and definitions of this Agreement are inconsistent with those of the Plan, those
of this Agreement shall govern. Capitalized terms not otherwise defined herein
shall have the meanings defined in the Plan. The Participant hereby accepts this
Option subject to all such provisions of the Plan and agrees that all decisions
under, and interpretations of, such provisions of the Plan by the Board, as
defined in the Plan, shall be final, binding and conclusive upon the Participant
and the Participant's heirs and transferees.
(e) In the event that the Company, upon the advice of counsel, deems it
necessary to list upon official notice of issuance any shares to be issued
pursuant to the Plan on a national securities exchange or market system or to
register under the Securities Act of 1933 or other applicable federal or state
statute any shares to be issued pursuant to the Plan, or to qualify any such
shares for exemption from the registration requirements of the Securities Act of
1933 under the rules and regulations of the Securities and Exchange Commission
or for similar exemption under state law, then the Company shall notify the
Participant to that effect and no Shares shall be issued until such
registration, listing or exemption has been obtained. The Company shall make
prompt application for any such registration, listing or exemption pursuant to
federal or state law or rules of such securities exchange which it deems
necessary and shall make reasonable efforts to cause such registration, listing,
or exemption to become and remain effective.
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3. EXERCISE OF OPTION; WITHHOLDING TAXES.
(a) Written notice of the exercise of the Option or any installment
thereof shall be given to the Company in the form attached as EXHIBIT 2,
specifying the number of shares for which the Option is exercised and
accompanied by (i) payment in full of the Option Price or (ii) if the Common
Stock is registered under the Exchange Act, irrevocable instructions to a broker
to promptly deliver to the Company full payment in accordance with this Section
of the amount necessary to pay the aggregate exercise price. Payment shall be
made (a) in cash, (b) by check, (c) at such time as the Common Stock is
registered under the Exchange Act, by actual delivery or deemed delivery and
assignment to the Company of shares of Common Stock owned by the Participant
which (i) have a Fair Market Value not less than the Option Price (as specified
on the signature page below), and (ii) have been owned by the Participant for at
least six months prior to the date of delivery or deemed delivery of such shares
(or such other period as may be required to avoid a charge to the Company's
earnings) or were not acquired, directly or indirectly, from the Company, (d) by
such other consideration and method of payment approved by the Board or (e) by
any combination of the foregoing. Notwithstanding the foregoing, this Option may
not be exercised by delivery and assignment to the Company of shares of Common
Stock to the extent that such delivery and assignment would constitute a
violation of the provisions of any law, or related regulation or rule, or any
agreement or Company policy, restricting the transfer or redemption of the
Common Stock. For purposes of this Section, a deemed delivery of shares shall
mean the offset by the Company of a number of shares subject to the Option
against an equal number of shares of the Common Stock owned by the Participant,
which may be accomplished by attestation by the Participant as to such shares
owned. The Company reserves the right to decline to approve any such procedure
in the Company's sole and absolute discretion.
(b) The Company's obligation to deliver Shares upon exercise of an
Option shall be subject to the Participant's satisfaction of all applicable
income and employment tax withholding obligations. Without limiting the
generality of the foregoing, the Company shall have the right to deduct from
payments of any kind otherwise due to the Participant any taxes of any kind
required by law to be withheld with respect to any Shares issued upon exercise
of the Option. Payment of withholding taxes may be made (i) by cash, (ii) when
the Common Stock is registered under the Exchange Act, through the surrender (by
actual or deemed delivery) of shares of Common Stock which the Participant
already owns and which, except to the extent otherwise permitted by the Board in
any instance, have been owned by the Participant for at least six months prior
to the date of delivery or deemed delivery of such Shares (or such other period
as may be required to avoid a charge to the Company's earnings) or were not
acquired, directly or indirectly, from the Company, or (iii) to the extent of
the minimum applicable federal, state and local withholding rate only, through
the surrender of shares of Common Stock to which the Participant is otherwise
entitled under the Plan, subject to the discretion of the Board to require
payment in cash if it determines that payment by other methods is not in the
best interests of the Company.
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4. TERMINATION OF OPTION. In the event that the Participant ceases to
perform Service for the Company or any parent or subsidiary of the Company
(collectively, the "Company Group") at any time prior to the exercise of this
Option in full, this Option shall terminate according to the following
provisions:
(a) If the Participant ceases to perform Service for any reason other
than death or disability (as defined in Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the "Code")), the Participant may at any time within a
period of 30 days after the date of such cessation of Service exercise the
Option to the extent that the Option was exercisable on the date of such
cessation;
(b) If the Participant ceases to perform Service because of disability
(as defined in Section 22(e)(3) of the Code), the Participant may at any time
within a period of 180 days after the date of such cessation of Service exercise
the Option to the extent that the Option was exercisable on the date of such
cessation; and
(c) If the Participant ceases to perform Service because of death, the
Option, to the extent that the Participant was entitled to exercise it on the
date of death, may be exercised within a period of 180 days after the
Participant's death by the person or persons to whom the Participant's rights
under the Option shall pass by will or by the laws of descent and distribution;
provided, however, that this Option may not be exercised to any extent by anyone
after the date of its expiration.
5. EXERCISABILITY OF OPTION. So long as Participant performs Service,
this Option may be exercised only as follows:
Months of Service after the Extent to which Option
Vesting Commencement Date May be Exercised*
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Fewer than twelve months 0.0%
Twelve months 33.3%
Each additional three month period
thereafter, an additional 8.33%
*Less the number of Shares as to which the Option previously has been
exercised.
The Vesting Commencement Date is specified on the signature page below. Shares
as to which this Option may be exercised at any time are herein referred to as
"Vested Shares."
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or
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in part, with respect to all unpurchased Vested Shares until the earlier of the
tenth anniversary of the Option Date or the earlier termination of this option
under Section 4 hereof or the Plan.
6. REPURCHASE OF SHARES UPON TERMINATION OF SERVICES. The following
repurchase provisions hereby are imposed upon the Vested Shares:
(a) REPURCHASE RIGHTS FOR VESTED SHARES. If the Participant for any
reason whatsoever (including without limitation voluntary or involuntary
termination, death or disability) ceases to perform Service then the Company
shall have the right, but not the obligation, to repurchase or to designate one
or more subscribers for all or any portion of the Vested Shares at a price per
share equal to the fair value of such Vested Shares repurchased hereunder at the
close of business on the last business day of the month prior to which the
Participant ceased to perform Service.
(b) REPURCHASE PROCEDURES. Upon notice from the Company of exercise of
its rights hereunder, the Vested Shares or appropriate part thereof shall be
transferred by the Participant to the Company or its designee(s) against payment
by the Company or its designee(s) of the purchase price as specified above. If
the Company shall fail to exercise its rights under this Section 6 within ninety
(90) days of the receipt of notification that the Participant has ceased to
perform Service, the repurchase rights with respect to the Shares imposed by
this Section 6 shall terminate and the Participant or his legal representatives
may thereafter transfer the Vested Shares, subject, however, to such other
restrictions on transfer as may then exist thereon (including those imposed by
Section 8).
(c) FAILURE OF HOLDER TO COMPLY. If the Participant fails to comply
with any of the provisions of this Section 6 or of Section 8, the Company, at
its option and in addition to its other remedies, may suspend the rights of the
Participant to vote or to receive dividends on the Shares or may refuse to
register on its books any transfer of the Shares or otherwise to recognize any
transfer or change in the ownership of the Shares or in the right to vote
thereon, until the provisions of this Section 6 or Section 8 are complied with
to the satisfaction of the Company. The Participant, if a director, shall not
vote with respect to any action taken by the Board in pursuing or exercising its
rights under the provisions of this Section 6 or Section 8.
7. "MARKET STAND OFF" AGREEMENT.
(a) The Participant, if requested by the Company or any managing
underwriter of the Company's securities, shall agree not to sell or otherwise
transfer or dispose of any Shares of the Company held by the Participant during
the period up to 180 days, as requested by the Company or such underwriter,
following the effective date of a registration statement of the Company filed
under the Securities Act of 1933 (except for any Company securities held by the
Participant sold pursuant to such registration statement). Such agreement shall
be in writing in form satisfactory to the Company or such underwriter. The
Company may impose stop-transfer instructions with respect to the Shares subject
to the foregoing restriction until the end of such period.
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(b) The provisions contained in this Section 7 shall not apply to any
transfer of Shares to or in trust for the sole benefit of the Participant, or
any member of the immediate family of the Participant, including for this
purpose the undersigned's spouse, domestic partner, parents, parents-in-law,
issue, nephews, nieces, god-children, brothers, brothers-in-law, sisters,
sisters-in-law, children-in-law and grandchildren-in-law, provided that such
transferee agrees in writing to be subject to the terms of this Agreement.
8. RESTRICTIONS ON TRANSFER; NOTICE OF DISPOSITION OF SHARES.
(a) Any restrictions on transfer of shares of the capital stock of the
Company contained in the Certificate of Incorporation or By-laws shall also
apply to the Shares.
(b) The Participant shall be subject to the requirements and
restrictions upon sale, disposition, pledge, encumbrance and transfer of the
Shares of contained in this Section 8; PROVIDED, HOWEVER, that this Section 8
shall not restrict or apply to (i) a sale or transfer pursuant to a registration
statement filed by the Company pursuant to the Securities Act of 1933, (ii) any
transfer to the Company, or (iii) a pledge of Shares provided that the Company
has consented thereto and that there is neither a transfer of the legal title of
the shares nor a transfer on the books of the corporation into the name of the
pledgee, but no pledgee or person claiming thereunder shall be entitled to make
or cause to be made any transfer of pledged Shares by sale thereof or otherwise
(including in this prohibition transfer on the books of the Company into the
name of the pledgee) except upon compliance with this Section 8.
Before selling, pledging, encumbering, or in any other way transferring
or disposing of any the Shares whether directly, indirectly or otherwise, and
whether for value or by gift or other transfer without consideration Participant
shall first notify the President or Secretary of the Company by certified mail,
return receipt requested, of his intention to do so, setting forth in full the
nature and terms of the proposed BONA FIDE sale, transfer or other disposition,
the name of the proposed transferee (the "Transferee") and the consideration, if
any, to be received therefor. Said notification shall contain an offer to sell
such shares to the Company or its designees at a purchase price per share (the
"Purchase Price'") equal to the purchase price per share to be paid by the
Transferee.
The Board of Directors may make such investigation as it deems
appropriate to establish the BONA FIDES of the offer. The Board may require that
the Transferee appear in person at a meeting of the Board. If, after written
request made by the Board, the Transferee fails to cooperate in such
investigation or fails to appear in person at a meeting of the Board, it shall
be established conclusively that his offer is not a bona fide. If the Company
agrees to accept such offer on its behalf or on behalf of one or more designees,
it shall accept such offer in writing to purchase all (but not less than all) of
such shares within 30 days following receipt of the Participant's notification.
If such offer is not accepted in writing within such period, it shall be deemed
to be rejected.
Except to the extent require by applicable law that cannot be waived,
the Company shall have no duty or obligation to disclose affirmatively to the
Participant or the Transferee, and the
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Participant and the Transferee shall have no right to be advised of, any
material information regarding the Company at the time prior to, upon, or in
connection with the Company's purchase of stock pursuant to this Section 8(b).
To the extent that any offers made pursuant to this Section 8(b) have
been rejected, then the Participant shall for a period of no more than 30 days
thereafter be at liberty, subject to applicable securities laws, to sell,
transfer or otherwise dispose of such shares to the Transferee name by him in
his original letter offering his Shares but to no other person, and then only in
the manner, at the Purchase Price and upon the exact terms states in such
letter. If the Participant fails to make such sale, transfer or other
disposition within such 30 days, then the Participant may not thereafter sell,
transfer or dispose of such stock without again complying with the provisions of
this Section 8(b).
These restrictions may be waived or modified with respect to any
specific transfer or transaction by the affirmative vote of a majority of the
Board of Directors.
In the event the Shares are to be sold to the Company or its designees
pursuant to any of the terms of this Section 8(b), the Participant or his legal
representatives shall deliver said Shares to the Company or its designees on a
date which is 30 business days following the date on which the obligation to
sell such Shares becomes fixed in accordance with any of the terms of this
Section 8(b), unless some other date is mutually agreed upon by the parties. The
certificates evidencing such shares shall be delivered to the principal office
of the Company, endorsed and otherwise in proper form for transfer, against
payment of the Purchase Price in accordance with this Section 8(b).
Payment for Shares purchase shall be made against presentation of the
Shares properly endorsed for transfer. Payment shall be made as follows: (i) in
cash in full, or (ii) at the option of the purchaser, at least 50% of the
Purchase Price in cash upon delivery of the Shares and the balance by delivery
at that time of an unsecured promissory note of the purchaser payable one year
from the date of the initial cash payment. Such note shall bear interest on the
unpaid principal amount outstanding at a rate equal to the prime rate posted in
the Wall Street Journal from time to time. The purchaser shall have the right to
prepay such note in whole at any time or in part from time to time without
penalty or premium.
The restrictions set forth in this Section 8(b) shall terminate
automatically upon the effectiveness of the first registration statement of
common stock of the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, which registration results in the Company being required
to file periodic reports under Section 13 or 15(d) of the Securities Exchange
Act of 1934.
(c) The Participant hereby agrees to notify the Company promptly if the
Participant disposes of any Shares within one (1) year after the date the
Participant exercises all or part of this Option or within two (2) years after
the Option Date. At any time during the one or two year periods set forth above,
the Company may place a legend on any certificate representing Shares requesting
the transfer agent for the Company's stock to notify the Company of any such
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transfer, and the Participant hereby authorizes such transfer agent so to notify
the Company (whether or not such Participant's stock certificates have been so
legended). The obligation of the Participant to notify the Company of any such
transfer shall continue notwithstanding that a legend has been placed on the
certificate pursuant to the preceding sentence. The Participant is urged to
review the description of the Plan provided by the Company for a more detailed
discussion the Federal tax consequences of such a disposition under current law
and the consult his or her own tax adviser regarding the same.
9. $100,000 LIMITATION. Under Section 422 of the Code, the aggregate
Fair Market Value of the shares with respect to which incentive stock options
granted by any member of the Company Group first become exercisable by an
employee during any calendar year cannot exceed $100,000 (the "$100,000
limitation"). To the extent, if any, that the $100,000 limitation is exceeded by
reason of the grant of this Option, this Option shall be deemed, to the maximum
extent possible, if any, to be an incentive stock option, and the portion of
this Option that is exercisable for shares in excess of the $100,000 limitation
shall, pursuant to Section 422(d) of the Code, be treated as an option which is
not an incentive stock option.
10. NOTICES. All notices or demands given pursuant to this Agreement
shall be in writing and shall be deemed to have been sufficiently given if
delivered by hand or sent by certified or registered mail, postage prepaid,
addressed to the Company at its principal office or to the Participant (or the
Participant's legal representatives) at the address stated in the Participant's
(or their) notice or at the Participant's address appearing on the books of the
Company.
11. NO SERVICE COMMITMENT; TAX TREATMENT. Nothing herein contained
shall be deemed to be or constitute an agreement or commitment by the Company or
any other member of the Company Group to continue the Participant in Service.
Although the Option granted hereunder is intended to qualify as an incentive
stock option under Section 422 of the Code, the Company makes no representation
about the tax treatment to the Participant with respect to receipt or exercise
of the Option or acquiring, holding or disposing of the Shares. The Participant
represents that the Participant has had the opportunity to discuss such
treatment with the Participant's tax adviser. The Participant shall have no
rights as a stockholder with respect to the Shares subject to the Option until
the exercise of the Option and the issuance of a stock certificate for the
Shares with respect to which the Option shall have been exercised.
12. ADJUSTMENT IN SHARES. In the event of any stock dividends, stock
splits, stock combinations, recapitalizations and other similar changes in the
capital structure of the Company after the Option Date, the number of shares of
Common Stock deliverable upon the exercise of this Option shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the Option Price to reflect such subdivision, combination or stock
dividend. In the event of a change of the Common Stock resulting from a merger
or similar reorganization as to which the Company is the surviving corporation
after the Option Date the number and kind of Shares subject to this Option and
the Option Price thereof shall be appropriately adjusted in such manner as the
Board may deem equitable to prevent dilution or enlargement of the rights
available or granted hereunder. The Board's determination in any
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specific situation 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 this Option.
13. ACQUISITION EVENTS.
(a) An "Acquisition Event" shall mean: (x) any merger or
consolidation after which the voting securities of the Company outstanding
immediately prior thereto represent (either by remaining outstanding or by being
converted into voting securities of the surviving or acquiring entity) less than
50% of the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such event; or (y)
any sale of all or substantially all of the assets or capital stock of the
Company (other than in a spin-off or similar transaction); or (z) any other
acquisition of the business of the Company, as determined by the Board.
(b) Upon the occurrence of an Acquisition Event, the Board or
the board of directors of any entity assuming the obligations of the Company
hereunder (as used in this Section 13(b), also the "Board") shall, as to this
Option, either (i) make appropriate provision for the continuation of this
Option by substituting on an equitable basis for the Shares then subject to this
Option either (1) the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Acquisition Event, (2) shares of
stock of the surviving or successor corporation or (3) such other securities as
the Board deems appropriate, the Fair Market Value of which shall not materially
differ from the Fair Market Value of the shares of Common Stock subject to this
Option immediately preceding the Acquisition Event; or (ii) upon written notice
to the Participant, provide that this Option shall become exercisable in full
and must be exercised within a specified number of days of the date of such
notice, at the end of which period any unexercised portion of this Option shall
terminate.
If this Option is assumed or an option is substituted therefor
pursuant to the immediately preceding paragraph, such option shall include a
provision to the effect that such Option shall become immediately exercisable in
full if, on or prior to the first anniversary of the Acquisition Event, the
Participant terminates his or her employment for Good Reason or is terminated
without Cause by the surviving or acquiring corporation. "Good Reason" shall
mean termination by the Participant upon not less than 30 days' prior written
notice (to allow the Company to cure any basis for Good Reason) as a result of
(i) a change in the scope of the Participant's duties and responsibilities that
results in the assignment of duties and responsibilities materially different
from the duties and responsibilities of the Participant as of the date
immediately prior to the Acquisition Event or (ii) any reduction in the annual
cash compensation payable to the Participant from and after Stock Acquisition
Event. For purposes of this Agreement, "Cause" shall mean (i) dishonesty, gross
negligence or willful misconduct by the Participant, (ii) misconduct which
materially and adversely affects the business, affairs or reputation of the
employer, (iii) misconduct which materially and adversely affects the
Participant's ability to perform his duties for the employer, (iv) the
conviction of the Participant of, or the entry of a pleading of guilty or NOLO
CONTENDERE by the Participant to, any crime
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involving any felony, (v) fraud, embezzlement or theft against the employer,
(vi) a breach by the Participant of any material provision of any employment
contract, assignment of inventions, confidentiality and/or nondisclosure
agreement between the Participant and the employer or (vii) the willful failure
of the Participant to follow written directions from the Board of Directors or
the officer to whom the Participant reports which are consistent with his
duties, and in the case of clauses (i), (iii), (vi) or (vii) above, which
breach, misconduct or non-performance is not cured by the Participant within
thirty (30) days after the Participant receives written notice from the employer
of such breach, misconduct or non-performance. The Participant shall be
considered to have been discharged for "Cause" if the Company determines, within
30 days after the Participant's resignation, that discharge for Cause was
warranted.
(c) MODIFICATION OF INCENTIVE STOCK OPTIONS. Notwithstanding the
foregoing, any adjustment made pursuant to Section 12 or Section 13(b) with
respect to this Option shall be made only after the Board, after consulting with
counsel for the Company, determines whether such adjustments would constitute a
"modification" (as that term is defined in Section 424 of the Code) of this
Option or would cause any adverse tax consequences for the Participant. If the
Board determines that such adjustment made with respect to this Option would
constitute a modification of this Option or would cause adverse tax consequences
to the holders, it may refrain from making such adjustments.
(d) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, this Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the Board.
14. FORFEITURE OF OPTION GAIN AND UNEXERCISED OPTIONS IF PARTICIPANT
ENGAGES IN CERTAIN Activities.
(a) If, at any time (1) during the Participant's Service or (2) within
one year after termination of Service or (3) within one year after Participant
exercises any portion of this Option, whichever is the latest, Participant
engages in any activity in competition with any activity of the Company, or
inimical, contrary or harmful to the interests of the Company, including, but
not limited to: (i) conduct related to Participant's employment for which either
criminal or civil penalties against Participant may be sought, (ii) directly or
indirectly, whether as principal, agent, employee, consultant, stockholder or in
any other capacity, engaging in or having a financial interest in (other than
holding up to 1% of equity in a publicly traded company), any business which is
competitive with the products and services being designed, conceived, marketed,
distributed or developed by the Company during the term or at termination of
Service, (iii) employing or recruiting any present, former or future employee of
the Company, (iv) soliciting or encouraging any client or customer of the
Company to terminate its relationship with the Company or to conduct with any
other person any business which such client or customer has conducted with the
Company during the term of Service, or (v) disclosing or misusing any
confidential information or material concerning the Company, then (I) this
Option shall terminate effective as of the date on which Participant enters into
such activity, unless terminated sooner by operation of another term or
condition of this Option or the Plan, and (II)
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any option gain realized by Participant from exercising all or a portion of this
Option during the one-year period prior to the occurrence of any of the
above-specified activities shall be paid by Participant to the Company.
(b) Upon exercise of this Option, the Participant shall certify on a
form acceptable to the Board that the Participant is in compliance with the
terms and conditions of this Agreement and the Plan.
(c) The Company shall immediately notify the Participant in writing of
any cancellation of any unexercised portion of this Option pursuant to this
Section. Following receipt of such notice, the Participant shall have no further
rights with respect to this Option.
(d) The Company shall notify the Participant in writing of any
rescission of an exercise of this Option within one year after the activity
referred to in Section 14(a) above. Within ten days after receiving such a
notice from the Company, the Participant shall either (i) pay to the Company the
excess of the fair market value of the Common Stock on the date of exercise of
this Option over the exercise price for the portion of the Option that was
exercised or (ii) return the Common Stock received upon the exercise of this
Option (in which case the Company will return the exercise price, without
interest, to the Participant).
(e) The Participant may be released from the Participant's obligations
under Section 14(a) above only if the Board (or its duly appointed agent)
determines in its sole discretion that such action is in the best interest of
the Company.
15. MISCELLANEOUS. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of Massachusetts
applicable to contracts made in and to be wholly performed within such
Commonwealth. This Agreement shall be binding upon and inure to the benefit of
the heirs and legal representatives of the Participant and the successors and
assigns of the Company, but shall not be assigned by the Participant at any time
without the prior written permission of the Company, and any such attempted
assignment shall be void.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.)
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IN WITNESS WHEREOF the parties have executed this Incentive
Stock Option Agreement as of the Option Date set forth below.
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Signature of Participant
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Print Name of Participant
Address:
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Type of Service:
-------------------
Option Date:
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No. of Shares:
---------------------
Option Price: $
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Vesting Commencement Date:
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Accepted, as the issuer of the Shares, in accordance with the terms of
the foregoing Incentive Stock Option Agreement as of the foregoing Option Date.
SOMBASA MEDIA INC.
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
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Name of Participant:
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Date of Exercise:
----------------------
INCENTIVE STOCK OPTION EXERCISE FORM
Sombasa Media Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sir/Madam:
The undersigned optionee (the "Participant"), presently or formerly an
employee of Sombasa Media Inc. (the "Company") was granted an Incentive stock
option (the "Option") to purchase _____________ shares of common stock of the
Company at an exercise price of $______ per share on _______________, _____
pursuant to the Company's 1999 Stock Plan (the "Plan") and an Incentive Stock
Option Agreement dated ___________ , 199_ (the "Option Agreement").
The Participant hereby elects to exercise the Option as to
______________shares of common stock of the Company (the "Shares").
Enclosed herewith is full payment in the amount of $__________________
for the Shares in the manner set forth in the Option Agreement. The Participant
will make adequate provision for any federal and state income tax withholding
obligations of the Company, if any, as more fully set forth in the Option
Agreement.
The Participant represents and warrants that the Participant is
acquiring the Shares for the Participant's own account for investment and not
with a view to, or for sale in connection with, any distribution of the Shares.
The Participant also represents that the Participant does not have any present
intention of selling, offering to sell or otherwise disposing of or distributing
the Shares or any portion thereof; and that, subject to the right of the
Participant to register the Shares in the joint names of the Participant and the
Participant's spouse, the entire legal and beneficial interest of the Shares is
being purchased for, and will be held for the account of, the Participant only
and not for any other person.
The Participant further represents and warrants that at no time was the
Participant presented with or solicited by any form of general solicitation or
any general advertising, including, but not limited to, any advertisement,
article, notice or other communication published in any newspaper, magazine, or
similar media or broadcast over television or radio or presented
at any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
The Participant acknowledges and understands that the purchase of the
Shares is a highly speculative investment, and the Participant represents and
warrants that the Participant is able, without impairing the Participant's
financial condition, to hold the Shares for an indefinite period of time and to
suffer a complete loss of the investment.
The Participant further acknowledges and understands that the Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act") and that consequently the Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available. The Participant further acknowledges and
understands that the Company is under no obligation to register the Shares,
that, in the absence of registration, the Shares may be transferred only under
limited circumstances, and that transfer of the Shares is subject to
restrictions contained in the Certificate of Incorporation and Bylaws of the
Company, as amended from time to time, and restrictions contained in the Option
Agreement. The Participant understands that the instrument evidencing the Shares
will be imprinted with legends which prohibit the transfer of the Shares unless
they are registered or such registration is not required in the opinion of
counsel satisfactory to the Company. The Participant does not have any contract,
agreement or arrangement with any person to sell, transfer or grant
participations, to such person or to any third person with respect to any of the
Shares.
The Participant is aware of the adoption of Rule 144 by the Securities
and Exchange Commission, promulgated under the Securities Act, which permits
limited public resale of securities acquired in a non-public offering subject to
the satisfaction of certain conditions, including, among other things: the
availability of certain public information about the Company, the resale
occurring not less than one year after the party has purchased and paid for the
securities to be sold, the sale being through a broker in an unsolicited
"brokers' transaction," and the amount of securities being sold during any
three-month period not exceeding specified limitations (generally, 1% of the
total amount outstanding).
The Participant agrees further that said Shares are being acquired by
the Participant in accordance with and subject to the terms, provisions and
conditions of the Plan and the Option Agreement, to each of which the
Participant hereby expressly assents. Such terms, provisions and conditions
shall bind and inure to the benefit of the Participant's heirs, legal
representatives, successors and assigns.
The Participant agrees to obtain the consent of the Participant's
spouse to any such agreement which may be required by the Company.
The Participant has reviewed and understands Section 14 of this
Agreement and certifies to the Company that Participant is not in violation of
any of the provisions of Section 14(a) as of the date hereof.
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The Participant's address of record is:
-----------------------------------------------------------------------
and the Participant's Social Security Number is:
----------------------
Very truly yours,
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Signature of Participant
(SPOUSE OF THE PARTICIPANT TO SIGN BELOW IF THE SHARES ARE TO BE REGISTERED IN
JOINT NAMES OR IF THE PARTICIPANT RESIDES IN A COMMUNITY PROPERTY STATE:)
The undersigned, being the spouse of the Participant exercising the
option as set forth above, does hereby acknowledge that the undersigned has read
and is familiar with the provisions of the above Incentive Stock Option Exercise
Form, the Plan, and the Option Agreement, and the undersigned hereby agrees
thereto and joins therein to the extent, if any, that the agreement and joinder
of the undersigned may be necessary.
----------------------------------
Signature of Spouse of Participant
Dated:
---------------------------
Receipt of the above is hereby acknowledged.
SOMBASA MEDIA INC.
By:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
Dated:
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3