▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of February 19, 1998, is made by and between
Scoop, Inc., a Delaware corporation hereinafter referred to as "Company," and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Chairman of the Board and Chief Executive Officer of the
Company, hereinafter referred to as "Optionee":
WHEREAS, the Company granted the Optionee an Option to purchase shares
of its Common Stock in connection with the commencement of the Optionee's
employment with the Company in September 1997; and
WHEREAS, the Company's Board has determined that it would be to the
advantage and best interest of the Company and its shareholders to amend certain
terms of the Option previously granted to the Optionee as an inducement for the
Optionee to remain in the service of the Company or its Subsidiaries and as an
incentive for increased efforts during such service; and
WHEREAS, the Company and the Optionee desire to set forth the revised
terms of said Option in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
SECTION 1.1. AGREEMENT
"Agreement" shall mean this ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Non-Qualified Stock
Option Agreement.
SECTION 1.2. BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.3. CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.4. COMMITTEE
"Committee" shall mean the Compensation Committee of the Board,
or another committee of the Board, as appointed from time to time by the Board
to administer option grants, plans and terms, provided, however, that Optionee
shall not serve on such Committee for purposes of administering this Agreement.
SECTION 1.5. COMPANY
"Company" shall mean Scoop, Inc., a Delaware corporation.
SECTION 1.6. DIRECTOR
"Director" shall mean a member of the Board.
SECTION 1.7. EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.8. FAIR MARKET VALUE
"Fair Market Value" of a share of Common Stock as of a given date
shall be (i) the closing price of a share of Common Stock on the principal
exchange on which shares of Common Stock are then trading, if any (or as
reported on any composite index which includes such principal exchange), on the
trading day previous to such date, or if shares were not traded on the trading
day previous to such date, then on the next preceding date on which a trade
occurred, or (ii) if Common Stock is not traded on an exchange but is quoted on
Nasdaq or a successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the trading day
previous to such date as reported by Nasdaq or such successor quotation system;
or (iii) if Common Stock is not publicly traded on an exchange and not quoted on
Nasdaq or a successor quotation system, the Fair Market Value of a share of
Common Stock as established by the Committee (or the Board, in the case of
Options granted to Independent Directors) acting in good faith and in accordance
with 10 California Code of Regulations ("CCR") 260.140.50.
SECTION 1.9. GRANT DATE
"Grant Date" shall mean September 4,1997.
SECTION 1.10. OFFICER
"Officer" shall mean an officer of the Company, as defined in
Rule 16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
2
SECTION 1.11. OPTION
"Option" shall mean the non-qualified stock option to purchase
Common Stock of the Company granted under this Agreement.
SECTION 1.12. RULE 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
SECTION 1.13. SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.14. SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as
amended.
SECTION 1.15. SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
SECTION 1.16. TERMINATION OF DIRECTORSHIP
"Termination of Directorship" shall mean the time when the
Optionee ceases to be a Director of the Company for any reason including, but
not by way of limitation, a termination by resignation, failure to be
re-elected, death, disability or retirement. The Board, in its sole and
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship.
SECTION 1.17. Termination of Employment
"Termination of Employment" shall mean the time when the Optionee
no longer serves as an Officer of the Company for any reason including, but not
by way of limitation, a termination by resignation, termination for cause,
death, disability or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Employment.
3
ARTICLE II.
GRANT OF OPTION
SECTION 2.1. GRANT OF OPTION
In consideration of the Optionee's agreement to serve as Chairman
of the Board and Chief Executive Officer of the Company and for other good and
valuable consideration, effective as of the Grant Date, the Company irrevocably
grants to the Optionee the option to purchase any part or all of an aggregate of
three hundred fifty thousand (350,000) shares of its Common Stock upon the terms
and conditions set forth in this Agreement.
SECTION 2.2. PURCHASE PRICE
As of the date of this Agreement, the purchase price of the
shares of stock covered by the Option shall be $1.375 per share without
commission or other charge.
SECTION 2.3. CONSIDERATION TO COMPANY
In consideration of the granting of this Option by the Company,
the Optionee agrees to render faithful and efficient services to the Company or
a Subsidiary, with such duties and responsibilities as the Company shall from
time to time prescribe. Nothing in this Agreement shall confer upon the
Optionee any right to continue as an employee of the Company or any Subsidiary,
or as a director of the Company, or shall interfere with or restrict in any way
the rights of the Company and its Subsidiaries, which are hereby expressly
reserved, to discharge the Optionee at any time for any reason whatsoever, with
or without cause.
SECTION 2.4. ADJUSTMENTS IN OPTION
In the event that the Committee or the Board determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer, exchange
or other disposition of all or substantially all of the assets of the Company or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Committee's or
Board's sole discretion, affects the Common Stock such that an adjustment is
determined by the Committee or the Board to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Agreement or with respect to the Option, then the
Committee or the Board may, in such manner as it may deem equitable:
(a) adjust any or all of the number and kind of shares of Common
Stock (or other securities or property) subject to the Option, and
(b) adjust any or all of exercise price with respect to the
Option.
4
In its sole and absolute discretion, and on such terms and conditions as it
deems appropriate, the Committee or the Board may provide by action taken prior
to the occurrence of such transaction or event, that upon such event, such
option, right or award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options,
rights or awards covering the stock of the successor or survivor corporation, or
a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices.
ARTICLE III.
PERIOD OF EXERCISABILITY
SECTION 3.1. COMMENCEMENT OF EXERCISABILITY
(a) Subject to Sections 3.3 and 3.4, the Option shall become
exercisable in thirteen (13) cumulative installments as follows:
(i) The first installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the first anniversary of the Grant Date (i.e., September 4,
1998).
(ii) The second through thirteenth installments each shall
consist of six and one quarter percent (6.25%) of the shares covered by the
Option and shall become exercisable on a quarterly basis as follows: the
second installment shall become exercisable beginning on the date fifteen
(15) months following the Grant Date (i.e., December 4, 1998) and one
additional installment will become exercisable every three months
thereafter (i.e., on the dates eighteen (18) months, twenty-one (21)
months, twenty-four (24) months, etc. following the Grant Date), with the
thirteenth installment becoming exercisable on the fourth anniversary of
the Grant Date.
(b) No portion of the Option which is unexercisable at the time
that both Termination of Directorship and Termination of Employment have
occurred shall thereafter become exercisable.
SECTION 3.2. DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative.
Each such installment which becomes exercisable pursuant to Section 3.1 shall
remain exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3. EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option
was granted; or
5
(b) The expiration of two (2) years from the date that both
Termination of Directorship and Termination of Employment have occurred for any
reason other than a termination by the Company for cause, including such
Termination of Directorship and Termination of Employment resulting from
Optionee's resignation, failure to get re-elected, death, permanent and total
disability (within the meaning of Section 22(e)(3) of the Code), or a
termination by the Company without cause; or
(c) The expiration of three (3) months from the date that both
Termination of Directorship and Termination of Employment have occurred as a
result of termination by the Company for cause.
SECTION 3.4. ACCELERATION OF EXERCISABILITY
In the event of the merger or consolidation of the Company with
or into another corporation, or the acquisition by another corporation or person
or related group of persons of all or substantially all of the Company's assets
or fifty percent (50%) or more of the Company's then outstanding voting stock,
at the effective date of such event this Option shall be immediately exercisable
as to all of the shares covered hereby, notwithstanding that this Option may not
yet have become fully exercisable under Section 3.1(a); provided, however, that
this acceleration of exercisability shall not take place if this Option becomes
unexercisable under Section 3.3 prior to said effective date.
ARTICLE IV.
EXERCISE OF OPTION
SECTION 4.1. PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only the Optionee may
exercise the Option or any portion thereof. After the death of the Optionee,
any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by Optionee's personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
SECTION 4.2. PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if
then wholly exercisable, may be exercised in whole or in part at any time prior
to the time when the Option or portion thereof becomes unexercisable under
Section 3.3; provided, however, that each partial exercise shall be for not less
than one hundred (100) shares (or the minimum installment set forth in Section
3.1, if a smaller number of shares) and shall be for whole shares only.
6
SECTION 4.3. MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary of the Company or his office of all of the
following prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules
established by the Board stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion; and
(b) (i) Full cash payment to the Secretary of the Company for
the shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Board, (A) shares of the
Company's Common Stock owned by the Optionee, duly endorsed for transfer to
the Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option, with a Fair Market Value on the date of delivery equal to
the aggregate exercise price of the Option or exercised portion thereof; or
(iii) With the consent of the Board, a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code or successor provision)
and payable upon such terms as may be prescribed by the Board. The Board
may also prescribe the form of such note and the security to be given for
such note. The Option may not be exercised, however, by delivery of a
promissory note or by a loan from the Company when or where such loan or
other extension of credit is prohibited by law; or
(iv) With the consent of the Board, property of any kind
which constitutes good and valuable consideration; or
(v) With the consent of the Board, a notice that the
Optionee has placed a market sell order with a broker with respect to
shares of the Company's Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Company in satisfaction of the
Option exercise price; or
(vi) With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Optionee or other person then entitled
to exercise such Option or portion, stating that the shares of stock are being
acquired for the Optionee's own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and
7
regulations thereunder, and that the Optionee or other person then entitled to
exercise such Option or portion will indemnify the Company against and hold it
free and harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is contrary to
the representation and agreement referred to above. The Board may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Board may require an opinion of counsel acceptable to it to the
effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or any Subsidiary) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Board, (i) shares of the
Company's Common Stock owned by the Optionee, duly endorsed for transfer, with a
Fair Market Value equal to the sums required to be withheld, or (ii) shares of
the Company's Common Stock issuable to the Optionee upon exercise of the Option
with a Fair Market Value equal to the sums required to be withheld, may be used
to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option.
SECTION 4.4. CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option,
or any portion thereof, may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of the Option or portion thereof prior to fulfillment of all
of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Board shall, in its absolute discretion, deem necessary or
advisable; and
8
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or local tax law,
the Company (or any Subsidiary corporation) is required to withhold upon
exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for reasons
of administrative convenience.
SECTION 4.5. RIGHTS AS SHAREHOLDER
The holder of the Option shall not be, nor have any of the rights
or privileges of, a shareholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
ARTICLE V.
OTHER PROVISIONS
SECTION 5.1. ADMINISTRATION
The Committee shall have the power to interpret this Agreement
and to adopt such rules for the administration, interpretation and application
of the Agreement as are consistent therewith and to interpret, amend or revoke
any such rules. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Committee under this
Agreement except with respect to matters which under Rule 16b-3 or Section
162(m) of the Code, or any regulations or rules issued thereunder, are required
to be determined in the sole discretion of the Committee. All actions taken and
all interpretations and determinations made by the Committee or by the Board in
good faith shall be final and binding upon the Optionee, the Company and all
other interested persons. No member of the Committee or the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Agreement or the Option.
SECTION 5.2. OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part
thereof shall be sold, pledged, assigned, or transferred in any manner other
than by will or the laws of descent and distribution, unless and until such
Option has been exercised, or the shares underlying such Option have been
issued, and all restrictions applicable to such shares have lapsed. Neither the
Option nor any interest or right therein or part thereof shall be liable for the
debts, contracts or engagements of the Optionee or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether
9
such disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence.
SECTION 5.3. SHARES TO BE RESERVED
The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of this Agreement.
SECTION 5.4. NOTICES
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to Optionee at the address
given beneath Optionee's signature hereto. By a notice given pursuant to this
Section 5.4, either party may hereafter designate a different address for
notices to be given to such party. Any notice which is required to be given to
the Optionee shall, if the Optionee is then deceased, be given to the Optionee's
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 5.4. Any
notice to be given under the terms of this Agreement shall be in writing and
shall be deemed duly given when received if personally delivered; the day after
it is sent, if sent for next-day delivery by a recognized overnight delivery
service (e.g., FedEx); and three days after being sent by certified or
registered United States mail, return receipt requested.
SECTION 5.5. TITLES
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
SECTION 5.6. CONSTRUCTION
This Agreement shall be administered, interpreted and enforced
under the internal laws of the State of California without regard to conflicts
of laws thereof.
SECTION 5.7. CONFORMITY TO SECURITIES LAWS
The Optionee acknowledges that this Agreement is intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including without limitation Rule
16b-3. Notwithstanding anything herein to the contrary, this Agreement shall be
administered, and the Option is granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
10
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement effective as of the date first written above.
SCOOP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
Director
OPTIONEE
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
----------------------------
Address
Optionee's Taxpayer
Identification Number:
----------------------------
11