EXHIBIT 99.3
XOOM, INC.
STOCK OPTION AGREEMENT
I. NOTICE OF STOCK OPTION GRANT
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Optionee's Name: __________________
You have been granted an option to purchase shares of Common Stock of XOOM,
Inc. (the "Company") as follows:
Grant Number __
Date of Grant ___________, 199_
Vesting Commencement Date ___________, 199_
Exercise Price per Share $_.__
Total Number of Shares Granted ________
Total Exercise Price $______.__
Type of Option: Non-Qualified Stock Option
Expiration Date: ___________, 200_
Vesting Schedule:
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Subject to other limitations set forth in the Option Agreement, the Option
may be exercised, i.e., shall "vest," pursuant to the following schedule,
provided that the Optionee is employed by the Company on the date each of the
events described below occurs.
(i) [Twenty-five percent (25%) of the Shares subject to the Option shall
vest at the end of the twelfth full month after the Vesting
Commencement Date, after which 1/48th of the Shares subject to the
Option shall vest on the last day of each month thereafter;]
(ii) In the event of a proposed Corporate Transaction (as defined in
Section 11 of this Option), the Company shall give reasonable notice
of such proposed Corporate Transaction to the Optionee and seventy-
five percent (75%) of the shares subject to this Option that are then
unvested and outstanding under this Option (the "Unvested Shares")
immediately prior to the specified effective date of such Corporate
Transaction (the "Effective Date") shall, immediately prior to the
Effective Date, automatically become fully vested and exercisable and
be released from any restrictions on transfer and repurchase or
forfeiture rights;
(iii) During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence
exceeds a period of ninety (90)
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days. Vesting of the Option shall resume upon the Optionee's
termination of the leave of absence and return to service with the
Company.
(iv) Notwithstanding (i), (ii) and (iii) above, all of the Shares subject
to the Option shall vest immediately if the Optionee is terminated by
the Company without Cause (as defined in the Employment Agreement
then in effect between the Optionee and the Company).
II. AGREEMENT
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1. Grant of Option. The Company hereby grants to the Optionee named in
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the Notice of Grant (the "Optionee"), this Option to purchase the total number
of shares of Common Stock (the "Shares") set forth in the Notice of Grant, at
the exercise price per share set forth in the Notice of Grant (the "Exercise
Price"). This Option is intended to be a nonstatutory stock option and not an
incentive stock option under Section 422(d) of the Internal Revenue Code, as
amended (the "Code").
2. Exercise of Option. This Option shall be exercised during its term in
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accordance with the Vesting Schedule set out in the Notice of Grant as follows:
(a) Right to Exercise.
(i) This Option may not be exercised for a fraction of a Share.
(ii) In the event of Optionee's death, disability or other
termination of the employment, the exercisability of this Option is governed
by Sections 6, 7 and 8 below, subject to the limitation contained in
subsection 2(a)(iii).
(iii) In no event may this Option be exercised after the
Term/Expiration Date of this Option as set forth in the Notice of Grant.
(b) Method of Exercise. This Option shall be exercisable by written
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notice (in the form attached as Exhibit A) which shall state the election to
exercise this Option, the number of Shares in respect of which this Option is
being exercised, and such other representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as may
be required by the Company. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The written notice shall be accompanied by payment
of the Exercise Price. This Option shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the Exercise
Price.
No Shares will be issued pursuant to the exercise of this Option
unless such issuance and such exercise complies with all relevant provisions of
law and the requirements of any stock exchange or national market system upon
which the Shares may then be listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on the date
on which this Option is exercised with respect to such Shares.
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3. Optionee's Representations. In the event the Shares purchasable
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pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form attached hereto as Exhibit B.
4. Method of Payment. Payment of the Exercise Price shall be by any of the
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following, or a combination thereof, at the election of the Optionee:
(a) by cash; or
(b) by check; or
(c) following the Registration Date (as defined in Section 16(h)), by
surrender of other shares of Common Stock of the Company which (A) in the case
of Shares acquired pursuant to the exercise of a Company option, have been
owned by the Optionee for more than six (6) months on the date of surrender,
and (B) have a fair market value (as determined by the Company's Board of
Directors) on the date of surrender equal to the Exercise Price of the Shares
as to which this Option is being exercised; or
(d) following the Registration Date, by delivery of a properly executed
exercise notice together with such other documentation as the Company's Board
of Directors and the broker, if applicable, shall require to effect an
exercise of this Option and delivery to the Company of the sale or loan
proceeds required to pay the Exercise Price.
5. Restrictions on Exercise. This Option may not be exercised if the
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issuance of the Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule
under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G")
as promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or
regulation.
6. Termination of Relationship. In the event the Optionee's employment
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with the Company terminates (other than as a result of Optionee's death,
disability, or termination by the Company without Cause), Optionee may, to the
extent otherwise so entitled at the date of such termination (the "Termination
Date"), exercise this Option for 90 days following the Termination Date. If
the Optionee is terminated by the Company without Cause, then Optionee may
exercise this Option (i) if the Company's stock is publicly traded, during the
four months after the date on which Optionee was given notice of termination,
or (ii) if the Company's stock is not publicly traded, during the twelve
months after the date on which the Optionee was given notice of termination.
To the extent that Optionee was not entitled to exercise this Option at the
date of such termination, or if the Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.
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7. Disability of Optionee. In the event of termination of Optionee's
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employment with the Company as a result of his or her disability, Optionee may,
but only within twelve (12) months from the date of such termination (and in no
event later than the Expiration Date of this Option as set forth in the Notice
of Grant), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled
to exercise this Option at the date of termination, or if Optionee does not
exercise this Option to the extent so entitled within the time specified herein,
this Option shall terminate.
8. Death of Optionee. In the event of termination of Optionee's employment
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with the Company as a result of the death of Optionee, this Option may be
exercised at any time within twelve (12) months following the date of death (but
in no event later than the Term/Expiration Date of this Option as set forth in
the Notice of Grant), by Optionee's estate or by a person who acquired the right
to exercise the Option by bequest or inheritance, but only to the extent the
Optionee could exercise the Option at the date of death.
9. Non-Transferability of Option. This Option may not be transferred in
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any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by Optionee. The
terms of this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
10. Term of Option. This Option may not be exercised after the
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Term/Expiration Date set out in the Notice of Grant, and may be exercised
prior to that date only in accordance with the terms of this Option.
11. Corporate Transaction.
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(a) Definition. For purposes of this Option, a "Corporate
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Transaction" shall include any of the following stockholder-approved
transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for (1) a transaction the principal purpose of which
is to change the state of the Company's incorporation, or (2) a transaction in
which the Company's shareholders immediately prior to such merger or
consolidation will hold (by virtue of securities received in exchange for
their shares in the Company) securities of the surviving entity representing
more than fifty percent (50%) of the total voting power of such surviving
entity immediately after such transaction;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company unless the Company's stockholders
immediately prior to such sale, transfer or other disposition hold (by virtue of
securities received in exchange for their shares in the Company) securities of
the purchaser or other transferee representing more than fifty percent (50%) of
the total voting power of such entity immediately after such transaction; or
(iii) any merger in which the Company is the surviving entity but
in which the Company's shareholders immediately prior to such merger will not
hold (by virtue of their shares in the Company held immediately prior to such
transaction) securities of the
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surviving entity (by virtue of their shares in the Company held immediately
prior to such transaction) representing more than fifty percent (50%) of the
total voting power of the surviving entity immediately after such transaction.
(b) Effect. In the event of any Corporate Transaction, this Option
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shall terminate upon the effective date of the Corporate Transaction. The
Company shall give Optionee reasonable notice of a Corporate Transaction to
enable Optionee to exercise this Option immediately prior to the effective
date of the Corporate Transaction to the extent this Option is then
exercisable in accordance with its terms.
12. Adjustments for Changes in Stock. If there should be any change in a
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class of stock subject to this option, through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
or other change in the capital structure of the Company (except for a
Corporate Transaction described in Section 11), the Company shall make
appropriate adjustments in order to preserve, but not to increase, the
benefits to Optionee, including adjustments in the number of shares of such
stock subject to this Option and in the price per share. Any new, substituted
or additional securities or property distributed with respect to the stock
("Additional Securities") shall be immediately subject to all the restrictions
of this Agreement, but only to the extent the stock is at such time covered by
such provisions. Any adjustment made pursuant to this Section 12 as a
consequence of a change in the capital structure of the Company shall not
entitle Optionee to acquire a number of shares of such stock of the Company or
shares of stock of any successor company greater than the number of shares
Optionee would receive if, prior to such change, Optionee had actually held a
number of shares of such stock equal to the number of shares then subject to
this Option. Optionee shall be entitled to direct the Company to exercise any
warrant or option received as Additional Securities upon supplying the funds
necessary to do so, in which event the securities so purchased shall
constitute Additional Securities, but the Optionee may not direct Company to
sell any such warrant or option. If Additional Securities consist of a
convertible security, Optionee may exercise any conversion right, and any
securities so acquired shall be deemed Additional Securities.
In the event that the Company effects a recapitalization of its Common
Stock into two or more classes after the Registration Date, this Option shall be
converted pursuant to this Section 12 into an identical Option to purchase the
class of Common Stock offered to the public after the Registration Date and
references to "Common Stock" and "Shares" hereunder shall be deemed to be
references to such publicly offered class of Common Stock.
13. Tax Consequences. Set forth below is a brief summary as of the date of
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this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
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(a) Exercise of Nonstatutory Stock Option. There will be regular
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federal income tax liability and state income tax liability upon the exercise
of a nonstatutory stock Option. The Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to
the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an employee or a former
employee of the Company, the Company will be required to withhold from
Optionee's compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
(b) Disposition of Shares. If Shares acquired upon exercise of this
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Option are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal and state income
tax purposes.
14. Financial Information. The Company shall provide to Optionee, during
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the period for which this Option is outstanding, copies of financial
statements at least annually.
15. Investment Representations. In connection with the acquisition of the
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securities evidenced by the Option, the undersigned Optionee makes the following
represents to the Company:
(a) Knowledge of the Company. Optionee has such knowledge and
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experience in financial and business matters, and specifically with regard to
stock options and the exercise of stock options as to be capable of evaluating
the risks and merits of an investment in the Common Stock and making an
informed investment decision. Optionee has knowledge and experience in the
operations of the industry and the business sector in which the Company is
engaged.
(b) Completeness of Information. Any information furnished by
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Optionee to the Company with respect Optionee's financial position and
business experience was correct and complete as of the grant date of the
Option documented in this Agreement.
(c) Nature of Investment. Optionee understands that an investment in
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the Company will be illiquid, and that (i) Optionee must bear the economic
risk of investment in the Company for an indefinite period of time, since (a)
the Common Stock is not registered under the Securities Act of 1933, as
amended, and, therefore, cannot be sold unless subsequently registered under
said act or an exemption from such registration is available; and (b) the
Common Stock cannot be sold unless registered under applicable state
securities laws or an exemption from such registration is available; (ii)
there is no established market for the Common Stock and it is possible that no
public market for the Common Stock will develop, and accordingly, it may not
be possible for Optionee to liquidate the investment in the Common Stock; and
(iii) Optionee's right to assign or transfer the Option and the Common Stock
is restricted.
(d) Response to Optionee's Inquiries. The Company has answered all
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inquiries that Optionee has put to it concerning the Company or any other
matters relating to the
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Option and the sale of the Common Stock.
16. Company's Right of First Refusal.
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(a) Transfer Notice. Neither the Optionee nor a transferee (either
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being sometimes referred to herein as the "Holder") shall sell, hypothecate,
encumber or otherwise transfer any Shares or any right or interest therein
without first obtaining the prior written consent of the Company unless the
Holder first shall have provided the Company with written notice (the
"Transfer Notice") of:
(i) The Holder's intention to transfer;
(ii) The name of the proposed transferee;
(iii) The number of Shares to be transferred; and
(iv) The proposed transfer price or value and terms thereof.
(b) First Refusal Exercise Notice. Within 45 days after receipt of the
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Transfer Notice (the "Option Period") the Company and/or its assigns shall
have the right to purchase (the "Right of First Refusal") all or, as the case
may be, encumber all, but not less than all of the Shares which are described
in the Transfer Notice (the "Offered Shares") at the per share price or value
and in accordance with the terms stated in the Transfer Notice, which Right of
First Refusal shall be exercised by written notice (the "First Refusal
Exercise Notice") to the Holder setting forth the number of Offered Shares the
Company and/or its assigns elects to purchase or encumber, provided that the
number equals all of the Offered Shares.
(c) Payment Terms. The Company shall consummate the purchase of the
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Offered Shares on the terms set forth in the Transfer Notice within 15 days
after delivery of the First Refusal Exercise Notice; provided, however, that
in the event the Transfer Notice provides for the payment for the Offered
Shares other than in cash, the Company and/or its assigns shall have the right
to pay for the Offered Shares by the discounted cash equivalent of the
consideration described in the Transfer Notice as reasonably determined by the
Company's President. Upon payment for the Offered Shares to the Holder or into
escrow for the benefit of the Holder, the Company or its assigns shall become
the legal and beneficial owner of the Offered Shares and all rights and
interest therein or related thereto, and the Company shall have the right to
transfer the Offered Shares to its own name or its assigns without the further
action by the Holder.
(d) Assignment. Whenever the Company shall have the right to
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purchase Shares under this Right of First Refusal, the Company may designate
and assign one or more employees, officers, directors or stockholders of the
Company or other persons or organizations, to exercise all or a part of the
Company's Right of First Refusal.
(e) Non-Exercise. If the Company and/or its assigns do not
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collectively elect to exercise the Right of First Refusal within the specified
45-day period or such earlier time if the
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Company and/or its assigns notifies the Holder that it will not exercise the
Right of First Refusal, then the Holder may transfer the Shares upon the terms
and conditions stated in the Transfer Notice, provided that:
(i) The transfer is made within 120 days of the date of the
Transfer Notice; and
(ii) The transferee agrees in writing that such Shares shall be
held or encumbered subject to the provisions of this Right of First Refusal.
(f) Expiration of Transfer Period. Following such 120-day period, no
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transfer of the Offered Shares and no change in the terms of the transfer as
stated in the Transfer Notice (including the name of the proposed transferee)
shall be permitted without a new written Transfer Notice prepared and
submitted in accordance with the requirements of this Right of First Refusal.
(g) Exception for Certain Family Transfers. Anything to the contrary
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contained in this section notwithstanding, the transfer of any or all of the
Shares during the Optionee's lifetime or on the Optionee's death by will or
intestacy to the Optionee's Immediate Family or a trust for the benefit of the
Optionee or the Optionee's Immediate Family shall be exempt from the
provisions of this Right of First Refusal. "Immediate Family" as used herein
shall mean spouse, domestic partner (as determined by the Company's Board of
Directors), child, including step-child, lineal descendant or antecedent,
father, mother, brother or sister and the lineal descendants of such
individuals. In such case, the transferee or other recipient shall receive and
hold the Shares so transferred subject to the provisions of this Right of
First Refusal, and there shall be no further transfer of such Shares except in
accordance with the terms of this Right of First Refusal.
(h) Termination of Right of First Refusal. The provisions of this
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Right of First Refusal shall terminate as to all Shares upon the Registration
Date. For purposes hereof, "Registration Date" means the first to occur of (i)
the closing of the first sale to the general public of (A) the Common Stock or
(B) the same class of securities of a successor corporation (or its parent)
issued pursuant to a Corporate Transaction in exchange for or in substitution
of the Common Stock, pursuant to a registration statement filed with and
declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended; and (ii) in the event of a Corporate
Transaction, the date of the consummation of the Corporate Transaction if the
same class of securities of the successor corporation (or its parent) issuable
in such Corporate Transaction shall have been sold to the general public
pursuant to a registration statement filed with and declared effective by, on
or prior to the date of consummation of such Corporate Transaction, the
Securities and Exchange Commission under the Securities Act of 1933, as
amended.
(i) Additional Shares or Substituted Securities. In the event of any
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stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
effected without the Company's receipt of consideration, any new, substituted
or additional securities or other property which is by reason
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of any such transaction distributed with respect to the Shares shall be
immediately subject to the Right of First Refusal, but only to the extent the
Shares are at the time covered by such right.
(j) Corporate Transaction. Immediately prior to the consummation of a
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Corporate Transaction, the Right of First Refusal shall automatically lapse in
its entirety, except to the extent the Right of First Refusal is to be
assigned to the successor corporation (or its parent company) in connection
with such Corporate Transaction, the right shall apply to the new capital
stock or other property received in exchange for the Shares in consummation of
the Corporate Transaction, but only to the extent the Shares are at the time
covered by such right.
17. Company's Repurchase Right.
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(a) Grant of Repurchase Right. The Company is hereby granted the
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right (the "Repurchase Right"), exercisable at any time (i) during the sixty
(60) day period following the Termination Date, (ii) during the sixty (60) day
period following an exercise of the Option that occurs after the Termination
Date, or (iii) during the sixty (60) day period immediately prior to a
Corporate Transaction, or the merger of the Company into or with a corporation
that is a member of a "controlled group" (within the meaning of Section 267(f)
of the Code) of which the Company is a member, to repurchase all or, at the
discretion of the Company and with the consent of the Optionee, any portion of
the Shares.
(b) Exercise of the Repurchase Right. The Repurchase Right shall be
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exercisable by written notice delivered to each Holder of the Shares prior to
the expiration of the applicable sixty (60) day period specified above. The
notice shall indicate the number of Shares to be repurchased and the date on
which the repurchase is to be effected, such date to be not more than thirty
(30) days after the date of notice. On the date on which the repurchase is to
be effected, the Company and/or its assigns shall pay to the Holder in cash or
cash equivalents (including the cancellation of any purchase-money
indebtedness) an amount equal to the Fair Market Value on the Termination
Date, if any, and if none, on the date immediately prior to the day on which
the repurchase is to be effected, of the Shares which are to be repurchased
from the Holder. Upon such payment to the Holder or into escrow for the
benefit of the Holder, the Company and/or its assigns shall become the legal
and beneficial owner of the Shares being repurchased and all rights and
interest thereon or related thereto, and the Company shall have the right to
transfer to its own name or its assigns the number of Shares being
repurchased, without further action by the Holder.
(c) Definition of Fair Market Value. For purposes hereof, "Fair
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Market Value" means, as of any date, the value of Common Stock determined as
follows:
(i) Where there exists a public market for the Common Stock, the
Fair Market Value shall be (A) the closing price for a Share for the last
market trading day prior to the time of the determination (or, if no closing
price was reported on that date, on the last trading date on which a closing
price was reported) on the stock exchange determined by the President of the
Company to be the primary market for the Common Stock or the Nasdaq National
Market, whichever is applicable or (B) if the Common Stock is not traded on
any such exchange or national market system, the average of the closing bid
and asked prices of a Share on the Nasdaq
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Small Cap Market for the day prior to the time of the determination (or, if no
such prices were reported on that date, on the last date on which such prices
were reported), in each case, as reported in The Wall Street Journal or such
other source as the President of the Company deems reliable; or
(ii) In the absence of an established market for the Common Stock
of the type described in (i), above, the Fair Market Value thereof shall be
determined by the President of the Company in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations.
(d) Assignment. Whenever the Company shall have the right to
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purchase Shares under this Repurchase Right, the Company may designate and
assign one or more employees, officers, directors or stockholders of the
Company or other persons or organizations, to exercise all or a part of the
Company's Repurchase Right.
(e) Termination of the Repurchase Right. The Repurchase Right shall
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terminate with respect to any Shares for which it is not timely exercised. In
addition, the Repurchase Right shall terminate and cease to be exercisable
with respect to all Shares upon the Registration Date.
(f) Additional Shares or Substituted Securities. In the event of any
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stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
effected without the Company's receipt of consideration, any new, substituted
or additional securities or other property (including money paid other than as
a regular cash dividend) which is by reason of any such transaction
distributed with respect to the Shares shall be immediately subject to the
Repurchase Right, but only to the extent the Shares are at the time covered by
such right. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the price per share to be paid upon
the exercise of the Repurchase Right in order to reflect the effect of any
such transaction upon the Company's capital structure.
(g) Corporate Transaction. Immediately prior to the consummation of a
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Corporate Transaction, the Repurchase Right shall automatically lapse in its
entirety, except to the extent the Repurchase Right is to be assigned to the
successor corporation (or its parent company) in connection with such
Corporate Transaction, the right shall apply to the new capital stock or other
property (including cash paid other than as a regular cash dividend) received
in exchange for the Shares in consummation of the Corporate Transaction, but
only to the extent the Shares are at the time covered by such right.
Appropriate adjustments shall be made to the price per share payable upon
exercise of the Repurchase Right to reflect the effect of the Corporate
Transaction upon the Company's capital structure.
18. Legends; Stop-Transfer Notices. The Company may place legends on the
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certificate(s) evidencing Shares issued to Optionee reflecting the restrictions
on transfer set forth herein and under applicable law. In order to ensure
compliance with the restrictions on transfer referred to in the legends placed
upon certificates evidencing ownership of the Shares, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and, if
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the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
19. Refusal to Transfer. The Company shall not be required (i) to
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transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Option Agreement or (ii) to
treat as owner of such Shares or to accord the right to vote or pay dividends
to any purchaser or other transferee to whom such Shares shall have been so
transferred.
20. Lock-Up Agreement.
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(a) Agreement. The Optionee, if requested by the Company and the lead
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underwriter of any public offering of the Common Stock or other securities of
the Company (the "Lead Underwriter"), hereby irrevocably agrees not to sell,
contract to sell, grant any option to purchase, transfer the economic risk of
ownership in, make any short sale of, pledge or otherwise transfer or dispose
of any interest in any Common Stock or any securities convertible into or
exchangeable or exercisable for or any other rights to purchase or acquire
Common Stock (except Common Stock included in such public offering or acquired
on the public market after such offering) during the 180-day period following
the effective date of a registration statement of the Company filed under the
Securities Act of 1933, as amended, or such shorter period of time as the Lead
Underwriter shall specify. The Optionee further agrees to sign such documents
as may be requested by the Lead Underwriter to effect the foregoing and agrees
that the Company may impose stop-transfer instructions with respect to such
Common Stock subject until the end of such period. The Company and the
Optionee acknowledge that each Lead Underwriter of a public offering of the
Company's stock, during the period of such offering and for the 180-day period
thereafter, is an intended beneficiary of this Section 20.
(b) Permitted Transfers. Notwithstanding the foregoing, Section 20(a)
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shall not prohibit the Optionee from transferring any shares of Common Stock
or securities convertible into or exchangeable or exercisable for the
Company's Common Stock to the extent such transfer is not otherwise prohibited
by this Option Agreement, either during the Optionee's lifetime or on death by
will or intestacy to the Optionee's immediate family or to a trust the
beneficiaries of which are exclusively the Optionee and/or a member or members
of the Optionee's immediate family; provided, however, that prior to any such
transfer, each transferee shall execute an agreement pursuant to which each
transferee shall agree to receive and hold such securities subject to the
provisions of Section 20 hereof. For the purposes of this subsection, the term
"immediate family" shall mean spouse, domestic partner (as determined by the
President of the Company), child, including step-child, lineal descendant or
antecedent, father, mother, brother or sister and the lineal descendants of
such individuals.
(c) No Amendment Without Consent of Underwriter. During the period
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from identification as a Lead Underwriter in connection with any public
offering of the Company's Common Stock until the earlier of (i) the expiration
of the lock-up period specified in Section 20(a) in connection with such
offering or (ii) the abandonment of such offering by the
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Company and the Lead Underwriter, the provisions of this Section 20 may not be
amended or waived except with the consent of the Lead Underwriter.
21. Headings. The captions used in the Notice and this Option Agreement are
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inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.
22. Interpretation. Any dispute regarding the interpretation of the Notice,
--------------
this Option Agreement and the exercise notice shall be submitted by the Optionee
or by the Company forthwith to the Company's Board of Directors, which shall
review such dispute at its next regular meeting. The resolution of such dispute
by the Board of Directors shall be final and binding on all persons.
23. Further Assurances. Optionee shall execute such further instruments and
------------------
take such further actions as may be requested by the Company as reasonably
necessary to carry out the intent and purposes of this Option Agreement.
24. Successors and Assigns. The Company may assign any of its rights under
----------------------
this Option Agreement to single or multiple assignees, and this Option Agreement
shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Agreement shall
be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.
25. Notices. Any notice required or permitted hereunder shall be given in
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writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the Company at its primary business office and to Optionee
at its address as shown below beneath its signature, or to such other address as
such party may designate in writing from time to time to the other party.
26. Entire Agreement: Governing Law. This Option Agreement constitutes the
-------------------------------
entire agreement of the parties with respect to the subject matter hereof and
supersedes in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. IN THAT REGARD, THIS OPTION FULLY SATISFIES
THE OBLIGATION OF THE COMPANY TO GRANT OPTIONEE THE OPTIONS DESCRIBED IN THE
COMPANY'S OFFER LETTER TO OPTIONEE PRIOR TO OPTIONEE'S BECOMING AN EMPLOYEE OF
THE COMPANY, AND, IN THE EVENT OF ANY CONFLICT BETWEEN THE OPTION DESCRIBED IN
SUCH OFFER LETTER OR AGREEMENT AND THIS OPTION AGREEMENT, THE TERMS AND
CONDITIONS OF
12
THIS OPTION AGREEMENT SHALL CONTROL. This Option Agreement is governed by
California law except for that body of law pertaining to conflict of laws.
IN WITNESS WHEREOF, the Company and Optionee have executed this Option
Agreement as of the Date of Grant shown above in the Notice of Grant.
XOOM, INC., a Delaware corporation
By:
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Name:
--------------------------------------------
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THIS OPTION IS, TO THE EXTENT NOT VESTED AS OF THE GRANT DATE, EARNED ONLY BY
CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS OPTION AGREEMENT SHALL
CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR
CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S
RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY
AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed this Option in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Option
and fully understands all provisions of the Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Company's Board of Directors upon any questions arising under this Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.
Signed:
------------------------------------------------
Optionee
Residence Address:
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EXHIBIT A
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EXERCISE NOTICE
XOOM, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
1. Exercise of Option. The undersigned ("Optionee") under the within
------------------
Option Agreement hereby exercises Optionee's option to purchase the following
number of shares of the Common Stock (the "Shares") of XOOM, Inc. (the
"Company") under the Option Agreement, and hereby tenders the following dollar
amount in full payment of the Exercise Price for the Shares:
Total Number of Option Shares to Exercise (A):
----------------------------------
EXERCISE PRICE PER SHARE (B): $
------------------------------------------------
TOTAL AMOUNT TO BE TENDERED (A X B): $
-----------------------------------------
2. Representations of Optionee. Optionee acknowledges that Optionee has
---------------------------
received, read and understood the Option Agreement and agrees that Optionee and
the Shares issuable hereby shall be subject to all of the terms, conditions and
restrictions set forth in the Option Agreement.
3. Rights as Shareholder. Until a stock certificate evidencing such
---------------------
Shares is 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 shareholder shall exist
with respect to the Shares, notwithstanding the exercise of the Option.
OPTIONEE:
---------------------------- ---------------------------------------
Signature Printed Name
---------------------------- ---------------------------------------
Date Phone Number
Address:
-----------------------------------------------------------------------
-------------------------------------------------------------------------------
COMPANY APPROVAL: Date:
--------------------- ---------------------------------
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EXHIBIT B
---------
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE :
COMPANY : XOOM, INC.
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:
(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution"
thereof within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").
(b) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this
connection, Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if Optionee's representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to
register the Securities. Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, a legend prohibiting
their transfer without the consent of the Commissioner of Corporations of the
State of California and any other legend required under applicable state
securities laws.
(c) Optionee is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the Securities Act, which, in substance, permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer
qualifies under Rule 701 at the time of the grant of the Option to the
Optionee, the exercise will
1
be exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer
period as any market stand-off agreement may require) the Securities exempt
under Rule 701 may be resold, subject to the satisfaction of certain of the
conditions specified by Rule 144, including: (1) the resale being made through
a broker in an unsolicited "broker's transaction" or in transactions directly
with a market maker (as said term is defined under the Securities Exchange Act
of 1934); and, in the case of an affiliate, (2) the availability of certain
public information about the Company, (3) the amount of Securities being sold
during any three month period not exceeding the limitations specified in Rule
144(e), and (4) the timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires
the resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters in connection with any registration of the
offering of any securities of the Company under the Securities Act, Optionee
shall not sell or otherwise transfer any Shares or other securities of the
Company during the 180-day period following the effective date of a
registration statement of the Company filed under the Securities Act;
provided, however, that such restriction shall only apply to the first
registration statement of the Company become effective under the Securities
which includes securities to be sold on behalf of the Company to the public in
an underwritten public offering under the Securities Act. The Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such 180-day period.
(e) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact
that Rules 144 and 701 are not exclusive, the Staff of the Securities and
Exchange Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers
or sales, and that such persons and their respective brokers who participate
in such transactions do so at their own risk. Optionee understands that no
assurances can be given that any such other registration exemption will be
available in such event.
Signature of Optionee:
-------------------------------------------------
Date: ,
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