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EXHIBIT 10.3
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Grantee's Name and Address: MELVYN MORRIS
Redmire Gap Farm
Mercaston Lane, Turnditch
Derbyshire, UK DE65 6NX
You have been granted an option to purchase shares of Common Stock of
uDate.com, Inc., subject to the terms and conditions of this Notice of Stock
Option Award (the "Notice"), the uDate.com, Inc. 2000 Stock Incentive Plan, as
amended from time to time (the "Plan") and the Stock Option Award Agreement (the
"Option Agreement") attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.
Award Number No. 1
Date of Award May 10, 2000
Vesting Commencement Date May 10, 2000
Exercise Price per Share $7.50
Total Number of Shares Subject
to the Option (the "Shares") 525,000
Total Exercise Price $3,937,500
Type of Option: Incentive Stock Option
Expiration Date: May 10, 2010
Post-Termination Exercise Period: Three (3) Months
VESTING SCHEDULE:
Subject to Grantee's Continuous Service and other limitations set forth
in this Notice, the Plan and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:
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Fifty Percent (50%) of the Shares subject to the Option shall vest
twelve months after the Vesting Commencement Date, and 1/24th of
the Shares subject to the Option shall vest on each monthly
anniversary of the Vesting Commencement Date thereafter.
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease. Vesting of the Option shall resume upon
the Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity.
In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall terminate concurrently
with the termination of the Grantee's Continuous Service, except as otherwise
determined by the Administrator.
In the event of the Grantee's change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or more
per week to an Employee whose customary employment is fewer than 20 hours per
week, vesting of the Option shall continue only to the extent determined by the
Administrator as of such change in status consistent with any minimum vesting
requirements set forth in the Plan.
IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.
UDate.com, Inc.,
a California corporation
By:
------------------------------------
Title:
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THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE, SUBJECT TO ANY WRITTEN EMPLOYMENT
AGREEMENT WITH THE GRANTEE.
The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts the Option subject to all of the terms and
provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan,
and the Option Agreement in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Notice, and fully understands all
provisions of this Notice, the Plan and the Option Agreement. The Grantee
hereby agrees that all disputes arising out of or relating to this Notice, the
Plan and the Option Agreement shall be resolved in accordance with Section 19 of
the Option Agreement. The Grantee further agrees to notify the Company upon any
change in the residence address indicated in this Notice.
Dated: Signed:
---------------------- -----------------------------
Melvyn Morris
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AWARD NUMBER: 1
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
1. GRANT OF OPTION. UDate.com, Inc., a California corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 2000
Stock Incentive Plan, as amended from time to time (the "Plan"), which are
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.
If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.
2. EXERCISE OF OPTION.
(a) RIGHT TO EXERCISE. The Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of the Plan and this Option Agreement. No partial
exercise of the Option may be for less than the lesser of five percent (5%) of
the total number of Shares subject to the Option or the remaining number of
Shares subject to the Option. In no event shall the Company issue fractional
Shares.
(b) ACCELERATION IN THE EVENT OF CORPORATE TRANSACTION.
Notwithstanding any other provision hereof, in the event of a Corporate
Transaction, this Option shall automatically shall become fully vested and
exercisable and be released from
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any forfeiture rights, immediately prior to the specified effective date of such
Corporate Transaction, for all of the Shares at the time represented by this
Option. Effective upon the consummation of the Corporate Transaction, this
Option under the Plan shall terminate; provided however that this Option shall
not terminate if it is assumed by the successor corporation or Parent thereof in
connection with the Corporate Transaction.
(c) ACCELERATION IN THE EVENT OF CHANGE IN CONTROL.
Notwithstanding any other provision hereof, in the event of a Change in Control
(other than a Change in Control which also is a Corporate Transaction), this
Option automatically shall become fully vested and exercisable and be released
from any forfeiture rights, immediately prior to the specified effective date of
such Change in Control, for all of the Shares at the time represented by this
Option.
(d) METHOD OF EXERCISE. The Option shall be exercisable only
by delivery of an Exercise Notice (attached as Exhibit A) which shall state the
election to exercise the Option, the whole number of Shares in respect of which
the Option is being exercised, and such other provisions as may be required by
the Administrator. The Exercise Notice shall be signed by the Grantee and shall
be delivered in person, by certified mail, or by such other method as determined
from time to time by the Administrator to the Company accompanied by payment of
the Exercise Price. The Option shall be deemed to be exercised upon receipt by
the Company of such written notice accompanied by the Exercise Price, which, to
the extent selected, shall be deemed to be satisfied by use of the broker-dealer
sale and remittance procedure to pay the Exercise Price provided in
Section 4(d), below.
(e) TAXES. No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax, employment tax, and social security tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Stock Option. Upon exercise of the Option, the Company or the
Grantee's employer may offset or withhold (from any amount owed by the Company
or the Grantee's employer to the Grantee) or collect from the Grantee or other
person an amount sufficient to satisfy such tax obligations and/or the
employer's withholding obligations.
3. GRANTEE'S REPRESENTATIONS. The Grantee understands that neither
the Option nor the Shares exercisable pursuant to the Option have been
registered under the Securities Act of 1933, as amended or any United States
securities laws. In the event the Shares purchasable pursuant to the exercise
of the Option have not been registered under the Securities Act of 1933, as
amended, at the time the Option is exercised, the Grantee shall, if requested by
the Company, concurrently with the exercise of all or any portion of
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the Option, deliver to the Company his Investment Representation Statement in
the form attached hereto as Exhibit B and such other representations, warranties
and covenants reasonably requested by counsel for the Company .
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be made by
any of the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law:
(a) cash;
(b) check;
(c) if the exercise occurs on or after the Registration Date
(as defined by the Plan), surrender of Shares or delivery of a properly executed
form of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of the
Option) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate Exercise Price of the Shares as to which the Option is
being exercised (but only to the extent that such exercise of the Option would
not result in an accounting compensation charge with respect to the Shares used
to pay the exercise price);
(d) if the exercise occurs on or after the Registration Date,
payment through a broker-dealer sale and remittance procedure pursuant to which
the Grantee (i) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased Shares and (ii) shall provide written directives to the
Company to deliver the certificates for the purchased Shares directly to such
brokerage firm in order to complete the sale transaction; or
(e) provided that the aggregate Exercise Price for the number
of Shares being purchased exceeds ___________________________ Dollars
($____,000), payment pursuant to a promissory note as described below.
(iv) The promissory note shall have a term of _____ (__)
years with principal and interest payable in _______ (__) equal
annual installments;
(v) The promissory note shall bear interest at the
minimum rate required by the federal tax laws to avoid the
imputation of interest income to the Company and compensation
income to the Grantee;
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(vi) The Grantee shall be personally liable for payment
of the promissory note and the promissory note shall be secured by
the Shares purchased upon delivery of the promissory note, or such
other collateral of equal or greater value, in a manner
satisfactory to the Administrator with such documentation as the
Administrator may request; and
The promissory note shall become due and payable upon the occurrence of any or
all of the following events: (A) the sale or transfer of the Shares purchased
with the promissory note; (B) termination of the Grantee's Continuous Service
for any reason other than death or Disability; or (C) the first anniversary of
the termination of the Grantee's Continuous Service due to death or Disability.
5. RESTRICTIONS ON EXERCISE. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws. In addition, the Option may be exercised
prior to the time that the Plan has been approved by the shareholders of the
Company; provided however that all Shares issued upon any such exercise shall be
rescinded if shareholder approval is not obtained within the time prescribed,
and Shares issued on any such exercise shall not be counted in determining
whether shareholder approval is obtained.
6. TERMINATION OR CHANGE OF CONTINUOUS SERVICE. In the event the
Grantee's Continuous Service terminates, other than for Cause, the Grantee may,
to the extent otherwise so entitled at the date of such termination (the
"Termination Date"), exercise the Option during the Post-Termination Exercise
Period. In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall, except as otherwise
determined by the Administrator, terminate concurrently with the termination of
the Grantee's Continuous Service. In no event shall the Option be exercised
later than the Expiration Date set forth in the Notice. In the event of the
Grantee's change in status from Employee, Director or Consultant to any other
status of Employee, Director or Consultant, the Option shall remain in effect
and, except to the extent otherwise determined by the Administrator, continue to
vest; provided, however, with respect to any Incentive Stock Option that shall
remain in effect after a change in status from Employee to Director or
Consultant, such Incentive Stock Option shall cease to be treated as an
Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on
the day three (3) months and one (1) day following such change in status.
Except as provided in Sections 8 and 9 below, to the extent that the Grantee is
not entitled to exercise the Option on the Termination Date, or if the Grantee
does not exercise the Option to the extent so entitled within the
Post-Termination Exercise Period, the Option shall terminate.
7. DEFINITION OF "CAUSE". For purposes of this Agreement, "CAUSE"
means the Grantee's (i) performance of any material act or failure to perform
any material act in bad faith and to the material detriment of the Company or a
Related Entity; (ii) performance of
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dishonest acts or intentional misconduct to the material detriment of the
Company or a Related Entity; (iii) material breach of any agreement with the
Company or a Related Entity; or (iv) commission of any felony (excluding DWI and
similar traffic offenses). At least 30 days prior to the termination of the
Grantee's Continuous Service pursuant to any of the foregoing, the Administrator
shall provide the Grantee with notice of the Company's or such Related Entity's
intent to terminate, the reason therefor, and an opportunity for the Grantee to
cure such defects in his service to the Company's or such Related Entity's
reasonable satisfaction. During this 30 day (or longer) period, no Award issued
to the Grantee under the Plan may be exercised or purchased.
8. DISABILITY OF GRANTEE. In the event the Grantee's Continuous
Service terminates as a result of his Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he was otherwise
entitled to exercise it on the Termination Date; provided, however, that if such
Disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code and the Option is an Incentive Stock Option, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Grantee is not
entitled to exercise the Option on the Termination Date, or if the Grantee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.
9. DEATH OF GRANTEE. In the event of the termination of the
Grantee's Continuous Service as a result of his death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's termination of Continuous Service as a
result of his Disability, the Grantee's estate, or a person who acquired the
right to exercise the Option by bequest or inheritance, may exercise the Option,
but only to the extent the Grantee could exercise the Option at the date of
termination, within twelve (12) months from the date of death (but in no event
later than the Expiration Date). To the extent that the Grantee is not entitled
to exercise the Option on the date of death, or if the Option is not exercised
to the extent so entitled within the time specified herein, the Option shall
terminate.
10. TRANSFERABILITY OF OPTION. The Option, if an Incentive Stock
Option, may not be transferred in any manner other than by Will or by the laws
of descent and distribution and may be exercised during the lifetime of the
Grantee only by the Grantee. The Option, if a Non-Qualified Stock Option may be
transferred by Will, by the laws of descent and distribution, and to the extent
and in the manner authorized by the Administrator, to members of the Grantee's
immediate family (as determined by the Administrator) or pursuant to a domestic
relations order. The terms of the Option shall be binding upon the executors,
administrators, heirs and successors of the Grantee.
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11. TERM OF OPTION. The Option may be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.
12. STOP-TRANSFER NOTICES. In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement, the Notice or the
Plan, the Company may issue appropriate "stop transfer" instructions to its
transfer agent, if any, and, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.
13. REFUSAL TO TRANSFER. The Company shall not be required (i) to
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 or other
shareholders rights to any purchaser or other transferee to whom such Shares
shall have been so transferred.
14. TAX CONSEQUENCES. Set forth below is a brief summary as of the
date of this Option Agreement of some of the federal tax consequences of
exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE COMPANY SHALL HAVE NO OBLIGATION TO NOTIFY GRANTEE OF ANY SUCH CHANGES. THE
GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING
OF THE SHARES. WITHOUT LIMITING THE FOREGOING, THIS SUMMARY DOES NOT DISCUSS
THE TAX CONSEQUENCES OF THE EXERCISE OF THE OPTION AND THE DISPOSITION OF THE
SHARES UNDER THE LAWS OF THE UNITED KINGDOM.
(a) EXERCISE OF INCENTIVE STOCK OPTION. If the Option
qualifies as an Incentive Stock Option, there will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as income for purposes of the alternative minimum tax for
federal tax purposes and may subject the Grantee to the alternative minimum tax
in the year of exercise.
(b) EXERCISE OF INCENTIVE STOCK OPTION FOLLOWING DISABILITY.
If the Grantee's Continuous Service terminates as a result of Disability that is
not total and permanent disability as defined in Section 22(e)(3) of the Code,
to the extent permitted on the date of termination, the Grantee must exercise an
Incentive Stock Option within three (3) months of such termination for the
Incentive Stock Option to be qualified as an Incentive Stock Option.
(c) EXERCISE OF NON-QUALIFIED STOCK OPTION. On exercise of a
Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market
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Value of the Shares on the date of exercise over the Exercise Price. If the
Grantee is an Employee or a former Employee, the Company will be required to
withhold from the Grantee's compensation or collect from the Grantee 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.
(d) DISPOSITION OF SHARES. In the case of a Non-Qualified
Stock Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes and subject to tax at a maximum rate of 20%. In the case of
an Incentive Stock Option, if Shares transferred pursuant to the Option are held
for more than one year after receipt of the Shares and are disposed more than
two years after the Date of Award, any gain realized on disposition of the
Shares also will be treated as capital gain for federal income tax purposes and
subject to the same tax rates and holding periods that apply to Shares acquired
upon exercise of a Non-Qualified Stock Option. If Shares purchased under an
Incentive Stock Option are disposed of prior to the expiration of such one-year
or two-year periods, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market
Value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.
15. LOCK-UP AGREEMENT.
(a) AGREEMENT. The Grantee, if requested by the Company and
the lead 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 Registration Date or such shorter period of time as
the Lead Underwriter shall specify. The Grantee 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
Grantee 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 16.
(b) NO AMENDMENT WITHOUT CONSENT OF UNDERWRITER. During the
period 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
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specified in Section 16(a) in connection with such offering or (ii) the
abandonment of such offering by the Company and the Lead Underwriter, the
provisions of this Section 16 may not be amended or waived except with the
consent of the Lead Underwriter.
16. ENTIRE AGREEMENT: GOVERNING LAW. The Notice, the Plan and this
Option Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option Agreement (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties. The Notice, the Plan and this Option Agreement are to be construed
in accordance with and governed by the internal laws of the State of California
(as permitted by Section 1646.5 of the California Civil Code, or any similar
successor provision) without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction other than the internal
laws of the State of California to the rights and duties of the parties. Should
any provision of the Notice, the Plan or this Option Agreement be determined by
a court of law to be illegal or unenforceable, such provision shall be enforced
to the fullest extent allowed by law and the other provisions shall nevertheless
remain effective and shall remain enforceable.
17. HEADINGS. The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation.
18. NOTICES. Any notice required or permitted hereunder shall be
given in writing and by personal delivery or by an internationally recognized
commercial courier service or by deposit in the United States mail by certified
mail (if the parties are within the United States) or upon deposit for delivery
by an internationally recognized express mail courier service (for international
delivery of notice), with postage and fees prepaid, addressed to the other party
at its address as shown beneath its signature in the Notice, or to such other
address as such party may designate in writing from time to time to the other
party; and shall be deemed effective on the date of delivery in person or by
courier or five (5) days after the date mailed.
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EXHIBIT A
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
EXERCISE NOTICE
UDate.com, Inc.
-------------------------------
-------------------------------
Attention: Secretary
XV. Effective as of today, ______________, ___ the undersigned (the
"Grantee") hereby elects to exercise the Grantee's option to purchase
___________ shares of the Common Stock (the "Shares") of UDate.com, Inc. (the
"Company") under and pursuant to the Company's 2000 Stock Incentive Plan, as
amended from time to time (the "Plan") and the [ ] Incentive [ ] Non-Qualified
Stock Option Award Agreement (the "Option Agreement") and Notice of Stock Option
Award (the "Notice") dated ______________, ________. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Exercise Notice.
XVI. REPRESENTATIONS OF THE GRANTEE. The Grantee acknowledges that the
Grantee has received, read and understood the Notice, the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.
XVII. RIGHTS AS SHAREHOLDER. Until the 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. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised, subject to the Plan and Applicable Law. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 11 of the
Plan.
XVIII. DELIVERY OF PAYMENT. The Grantee herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 4(d) of the Option Agreement.
XIX. TAX CONSULTATION. The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee's purchase or
disposition of the Shares.
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The Grantee represents that the Grantee has consulted with any tax consultants
the Grantee deems advisable in connection with the purchase or disposition of
the Shares and that the Grantee is not relying on the Company or its
representatives for any tax advice.
XX. TAXES. The Grantee agrees to satisfy all applicable federal,
state and local income and employment tax withholding obligations and herewith
delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations. In the case
of an Incentive Stock Option, the Grantee also agrees, as partial consideration
for the designation of the Option as an Incentive Stock Option, to notify the
Company in writing within thirty (30) days of any disposition of any shares
acquired by exercise of the Option if such disposition occurs within two (2)
years from the Award Date or within one (1) year from the date the Shares were
transferred to the Grantee. If the Company is required to satisfy any federal,
state or local income or employment tax withholding obligations as a result of
such an early disposition, the Grantee agrees to satisfy the amount of such
withholding in a manner that the Administrator prescribes.
XXI. RESTRICTIVE LEGENDS. The Grantee understands and agrees that the
Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of
the Shares together with any other legends that may be required by the Company
or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE
ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR
TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER HELD BY
THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL
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OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS
ARE BINDING ON TRANSFEREES OF THESE SHARES.
XXII. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this agreement
shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding upon the Grantee and his heirs, executors, administrators,
successors and assigns.
XXIII. HEADINGS. The captions used in this Exercise Notice are inserted
for convenience and shall not be deemed a part of this agreement for
construction or interpretation. .
XXIV. GOVERNING LAW; SEVERABILITY. This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State of
California (as permitted by Section 1646.5 of the California Civil Code, or any
similar successor provision) without giving effect to any choice of law rule
that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of California to the rights and duties of the
parties. Should any provision of this Exercise Notice be determined by a court
of law to be illegal or unenforceable, such provision shall be enforced to the
fullest extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.
XXV. NOTICES. Any notice required or permitted hereunder shall be
given in writing and by personal delivery or by an internationally recognized
commercial courier service or by deposit in the United States mail by certified
mail (if the parties are within the United States) or upon deposit for delivery
by an internationally recognized express mail courier service (for international
delivery of notice), with postage and fees prepaid, addressed to the other party
at its address as shown beneath its signature in the Notice, or to such other
address as such party may designate in writing from time to time to the other
party; and shall be deemed effective on the date of delivery in person or by
courier or five (5) days after the date mailed.
XXVI. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.
XXVII. ENTIRE AGREEMENT. The Notice, the Plan and the Option Agreement
are incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's
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interest except by means of a writing signed by the Company and the Grantee.
Nothing in the Notice, the Plan, the Option Agreement and this Exercise Notice
(except as expressly provided therein) is intended to confer any rights or
remedies on any persons other than the parties.
Submitted by: Accepted by:
GRANTEE: UDATE.COM, INC.
By:
------------------------------------
Title:
-------------------------------- ---------------------------------
(Signature)
Address: Address:
--------------------------------
--------------------------------
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EXHIBIT B
UDATE.COM, INC. 2000 STOCK INCENTIVE PLAN
INVESTMENT REPRESENTATION STATEMENT
GRANTEE: MELVYN MORRIS
COMPANY: UDATE.COM, INC.
SECURITY: COMMON STOCK
AMOUNT:
------------------------------------
DATE:
------------------------------------
In connection with the purchase of the above-listed Securities, the undersigned
Grantee represents to the Company the following:
(e) Grantee 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. Grantee is
acquiring these Securities for investment for Grantee'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").
(f) Grantee 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 Grantee's investment intent as expressed herein. Grantee 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. Grantee further acknowledges and understands that the Company is
under no obligation to register the Securities. Grantee 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.
(g) Grantee 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 Grantee, the exercise will be
exempt from registration under the Securities Act. In the event the
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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.
(h) Grantee 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. Grantee understands that no assurances can be given that any
such other registration exemption will be available in such event.
(e) Grantee represents that he is a resident of
_______________________________ ______________________________.
Signature of Grantee:
------------------------------------------
Date: ,
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