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EXHIBIT 10.25
eUNIVERSE, INC.
1999 Stock Awards Plan
1. Purpose. The purpose of the eUniverse, Inc. 1999 Stock Awards Plan
(the "Plan") is to promote the long term financial interests and growth of
eUniverse, Inc. (the "Company") by (a) attracting and retaining executive
personnel and other Participants, (b) motivating executive personnel and other
Participants by means of growth-related incentives, (c) providing incentive
compensation opportunities that are competitive with those of other major
corporations; and (d) furthering the identity of interests of Participants with
those of the stockholders of the Company.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" means any entity in which the Company has a direct or indirect
equity interest which is so designated by the Committee.
"Award Limit" means that number of shares of Common Stock as determined by
the Committee.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Committee" means, as to a Participant who is not a Director, a committee
of two or more Directors of the Company who are "outside Directors" as such
term is used in Section 162(m) of the Code and Non-Employee Directors for
purposes of Rule 16b-3, or such other committee of the Board of Directors
as it shall duly appoint and delegate authority to administer, and make
awards under, the Plan. With respect to a Director who is a Participant,
the Committee shall be the Board of Directors of the Company.
"Common Stock" means the common stock, $0.001 par value, of the Company or
such other securities as may be substituted therefor pursuant to paragraph
6(e).
"Consultant" means any person who renders bone fide consultation or
advisory services to the Company, provided that such services shall not be
in connection with the offer or sale of securities in a capital-raising
transaction.
"Director" means any person who is a member of the Board of Directors of
the Company and is not also an Employee.
"Employee" means any officer or other employee (as defined in accordance
with Section 3401(c) of the Code) of the Company, or of any Affiliate.
The "Fair Market Value" of a share of Common Stock means the average
between the highest and lowest quoted selling prices of the Common Stock on
the NASDAQ National Market, or in the event the Common Stock is not listed
on such exchange, then on the
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exchange where the Common Stock is traded, on the pertinent option grant
date or exercise date.
"Participant" means any Director, Employee or Consultant of the Company or
an Affiliate, who is selected by the Committee.
"QDRO" means a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder.
"Rule 16b-3" means such rule adopted under the Securities Exchange Act of
1934, as such rule is amended from time to time, or any successor rule.
3. Limitation on Aggregate Shares. The number of shares of Common Stock
with respect to which awards may be granted under the Plan shall not exceed
5,000,000 shares. Such 5,000,000 shares of Common Stock may be either
previously authorized but unissued shares, treasury shares, or a combination
thereof, as the Committee shall determine. The maximum number of shares of
Common Stock with respect to which awards may be granted under the Plan during
any calendar year to a single Participant may not exceed the Award Limit. To
the extent required by Section 162(m) of the Code, shares subject to Options (as
defined in Section 5 below) which are canceled continue to be counted against
the Award Limit and if, after grant of an Option, the price of shares subject to
such Option is reduced, the transaction is treated as a cancellation of the
Option and a grant of a new Option and both the Option deemed to be canceled and
the Option deemed to be granted are counted against the Award Limit.
Furthermore, to the extent required by Section 162(m) of the Code, if, after
grant of a Stock Appreciation Right ("SAR"), the base amount on which stock
appreciation is calculated is reduced to reflect a reduction in the Fair Market
Value of the Company's Common Stock, the transaction is treated as a
cancellation of the SAR and a grant of a new SAR and both the SAR deemed to be
canceled and the SAR deemed to be granted are counted against the Award Limit.
4. Add-back of Options and Other Rights. If any Option, other right to
acquire shares of Common Stock under this Plan, or any other award, expires or
is canceled without having been fully exercised, or is exercised in whole or in
part for cash as permitted by this Plan, the number of shares subject to such
Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section 3.
Furthermore, any shares subject to Options or other awards which are adjusted
pursuant to Section 6(e) and become exercisable with respect to shares of stock
of another corporation shall be considered canceled and may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 3. Shares
of Common Stock which are delivered by the Participant or withheld by the
Company upon the exercise of any Option or other award under this Plan, in
payment of the exercise price thereof, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 3. If any share of Restricted
Stock is forfeited by the Participant or repurchased by the Company pursuant to
Section 5(c)(iii) hereof, such share may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 3. Notwithstanding the
provisions of this Section 4, no shares of Common Stock may again be optioned,
granted or awarded if such
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action would cause an Incentive Stock Option to fail to qualify as an incentive
stock option under Section 422 of the Code.
5. Awards. The Committee may grant stock options ("Options"), to
Participants, in accordance with this Section 5 and the other provisions of the
Plan.
(a) Options.
(i) Option Grants. Options granted under the Plan may be incentive
stock options ("ISOs") within the meaning of Section 422 of the Code
or any successor provision, or in such other form, consistent with the
Plan, as the Committee may determine.
(ii) Option Exercise Price. The exercise price of an Option shall be
fixed by the Committee in its discretion; provided, however, that in
the case of ISO's, the exercise price shall be not less than 100% of
the Fair Market Value of a share of Common Stock on the date of grant.
(iii) Option Term. The term of an Option shall be set by the
Committee in its discretion; provided, however, that in the case of
ISOs, the term shall not be more than ten (10) years from the date the
ISO is granted.
(iv) Exercisability. Options shall be exercisable at such time or
times as the Committee shall determine at or subsequent to grant.
(v) Exercise of Options. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Committee may require that, by
the terms of the Option, a partial exercise be with respect to a
minimum number of shares. Options shall be exercised in whole or in
part by providing (A) written notice to the Company (to the attention
of the Secretary) complying with the applicable rules established by
the Committee; (B) such representations and documents as the Committee
deems necessary or advisable to effect compliance with all applicable
laws or regulations; (C) in the event that the Option shall be
exercised pursuant to Section 6(d) by any person or persons other than
the optionee, appropriate proof of the right of such person or persons
to exercise the Option; and (D) payment in full of the option price.
Payment of the option price may be made, at the discretion of the
optionee, and to the extent permitted by the Committee, (1) in cash
(including check, bank draft, or money order), (2) in Common Stock
with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof,
(3) by a combination of cash and Common Stock, or (4) with any other
good and valuable consideration.
(vi) Rights as Stockholders. The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the
Company in respect of any shares purchasable upon the exercise of any
part of an Option unless and until
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certificates representing such shares have been issued by the Company
to such holders.
(vii) Ownership and Transfer Restrictions. The Committee may impose
such restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option
Agreement and may be referred to on the certificates evidencing such
shares. The Committee may require the Participant to give the company
prompt notice of any disposition of shares of Common Stock acquired by
exercise of an ISO within (i) two years from the date of granting such
Option to such Participant or (ii) one year after the transfer of such
shares to such Participant. The Committee may direct that the
certificates evidencing shares acquired by exercise of an Option refer
to such requirement to give prompt notice of disposition.
(b) Stock Appreciation Rights.
(i) Grant and Price of SAR. Subject to such terms and conditions
not inconsistent with this Plan as the Committee shall impose and
shall be evidenced by a written Stock Appreciation Right Agreement, an
SAR shall entitle its holder to receive from the Company, at the time
of exercise of such right, an amount equal to the excess of the Fair
Market Value (at the date of exercise) of a share of Common Stock over
the SAR price multiplied by the number of shares as to which the
holder is exercising the SAR. The SAR price shall be fixed by the
Committee at not less than 100% of the Fair Market Value of a share of
Common Stock on the date of grant. SARs may be in tandem with any
previously or contemporaneously granted Option or independent of any
Option.
(ii) Tandem SARs. An SAR in tandem with an Option shall be related
to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable. An SAR in tandem with an
Option may be granted to the Participant for no more than the number
of shares subject to the simultaneously or previously granted Option
to which it is coupled.
(iii) Amount Payable by Company. The amount payable may be paid by
the Company in Common Stock (valued at its Fair Market Value on the
date of exercise), cash or a combination thereof, as the Committee may
determine, which determination shall be made after considering any
preference expressed by the holder.
(c) Restricted Stock.
(i) Restricted Stock Award. The Committee may award to any
Participant shares of Common Stock, including shares earned under any
of the Company's compensation plans, subject to this Section 5(c) and
such other terms and conditions as the Committee may prescribe (such
shares being called "Restricted
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Stock"), which restrictions may include, without limitation,
restrictions concerning voting rights and transferability and
restrictions based on duration of employment with the Company, Company
performance and individual performance. Each certificate for
Restricted Stock shall be registered in the name of the Participant
and deposited, together with a stock power endorsed in blank, with the
Company.
(ii) Restrictions. There shall be established for each Restricted
Stock award a restriction period (the "Restriction Period") of such
length as shall be determined by the Committee. Shares of Restricted
Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered, except as hereinafter provided, during the Restriction
Period. Unless otherwise provided by the Committee, except for such
restrictions on transfer and such other restrictions as the Committee
may impose, the Participant shall have all the rights of a holder of
Common Stock as to such Restricted Stock. The Committee, in its sole
discretion, may permit or require the payment of cash dividends to be
deferred and, if the Committee so determines, reinvested in additional
Restricted Stock or otherwise invested. At the expiration of the
Restriction Period, the Corporation shall redeliver to the Participant
(or the Participant's designated beneficiary under Section 6(h), or,
if none, the Participant's legal representative) the certificates
deposited pursuant to this paragraph.
(iii) Forfeiture/Repurchase of Restricted Stock. Except as provided
by the Committee at the time of grant or otherwise, upon a termination
of employment for any reason during the Restriction Period all shares
still subject to restriction shall be forfeited by the Participant or
at the discretion of the Committee may be repurchased by the Company
at a price to be determined by the Committee.
6. Miscellaneous Provisions.
(a) Administration. The Plan shall be administered by the Committee.
Subject to the limitations of the Plan, the Committee shall have the sole and
complete authority to: (i) select Participants in the plan; (ii) subject to
Section 3, to make awards in such forms and amounts as it shall determine,
including the determination as to whether such Options are to be ISOs; (iii) to
impose such limitations, restrictions and conditions upon such awards as it
shall deem appropriate, (iv) to interpret the Plan and the agreements pursuant
to which Options, Restricted Stock or SARs are granted or awarded, and to adopt,
amend and rescind administrative guidelines and other rules and regulations
relating to the Plan, (v) to correct any defect or omission or to reconcile any
inconsistency in the Plan or in any award granted hereunder and (vi) to make all
other determinations and to take all other actions necessary or advisable for
the implementation and administration of the Plan. Any such interpretations and
rules with respect to ISOs shall be consistent with the provisions of Section
422 of the Code. The actions and determinations of the Committee or its
delegates on matters within its authority shall be conclusive and binding upon
the Company, all the Participants and all other interested persons, subject to
such allocation to its Affiliates and operating units as it deems appropriate.
The Committee may, to the extent that any such action will not prevent the Plan
from complying with
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the Rule 16b-3 or Section 162(m) of the Code, delegate any of its authority
hereunder to such persons as it deems appropriate.
(b) Professional Assistance; Good Faith Actions. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers, or other
persons. The Committee, the Company and the Company's officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. No members of the Committee or Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
this Plan, Options, awards of Restricted Stock or SARs; and all members of the
Committee and the Board shall be fully protected by the Company in respect of
any such action, determination or interpretation.
(c) Written Agreement. Each award shall be evidenced by a written
agreement, which shall be executed by the Participant and an authorized officer
of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan. Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Stock Option Agreements evidencing ISOs shall contain such
terms and conditions as may be necessary to meet the applicable provisions of
Section 422 of the Code.
(d) Non-Transferability. Subject to the provisions of paragraph 6(h) , no
award under the Plan and no interest therein, shall be transferable by the
Participant otherwise than (i) by will or the laws of descent and distribution,
(ii) pursuant to a QDRO or (iii) as expressly permitted under the applicable
option agreement including, if so permitted, pursuant to a gift to such
optionee's family, whether directly or indirectly or by means of a trust or
partnership or otherwise, unless and until such rights or awards have been
exercised, or the shares underlying such rights or awards have been issued, and
all restrictions applicable to such shares have lapsed. All awards shall be
exercisable or received during the Participant's lifetime only by the
Participant or the Participant's legal representative. Any purported transfer
contrary to this provision will nullify the award. During the lifetime of the
Participant, only he may exercise an Option or other right or award (or any
portion thereof) granted to him under the Plan, unless it has been disposed of
pursuant to a QDRO. After the death of the Participant, any exercisable portion
of an Option or other right or award may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Stock Option Agreement or
other agreement, be exercised by his beneficiary designated under 6(h) or, if
none, his personal representative or by any person empowered to do so under the
deceased Participant's will or under the then applicable laws of descent and
distribution.
(e) Adjustments Upon Certain Changes. In the event of a reorganization,
recapitalization, spin-off, stock dividend, stock split, combination,
reclassification, reverse stock split, merger, consolidation, split-up, spin-
off, 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
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transaction or event or other increase or reduction in the number of issued
shares of Common Stock, the Committee may, in order to prevent the dilution or
enlargement of rights under awards, make such adjustments in the number and type
of shares authorized by the Plan, the number and type of shares covered by, or
with respect to which payments are measured under, outstanding awards and the
exercise prices specified therein as may be determined to be appropriate and
equitable. In the event of any of the events or transactions described in the
preceding sentence, a change in control, or similar transaction by the Company
or any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, if the Committee determines that such action is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to any option,
right or other award under this Plan, to facilitate such transactions or events
or to give effect to such changes in laws, regulations or principles, the
Committee in its discretion is hereby authorized to provide in the agreement
evidencing any award or by action taken prior to the occurrence of such
transaction or event: (i) for adjustments to such award in order to prevent the
dilution or enlargement of rights thereunder or to provide for acceleration of
benefits thereunder; (ii) for either the purchase of any such Option, SAR, or
any Restricted Stock for an amount of cash equal to the amount that could have
been attained upon the exercise of such option, right or award or realization of
the Participant's rights had such option, right or award been currently
exercisable or payable or fully vested or the replacement of such option, right
or award with other rights or property selected by the Committee in its sole
discretion; (iii) that it cannot be exercised after such event; (iv) 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 survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices; and (v) that the restrictions
imposed under a Restricted Stock Agreement upon some or all shares of Restricted
Stock may be terminated, and some or all shares of such Restricted Stock may
cease to be subject to repurchase or forfeiture under Section 5(c)(iv) after
such event. With respect to Options and SARs intended to qualify as performance-
based compensation under Section162(m), no adjustment or action described in
this Section 6(e) or in any other provision of the Plan shall be authorized to
the extent that such adjustment or action would cause the Plan to violate
Section 422(b)(1) of the Code or would cause such Option or SAR to fail to so
qualify under Section 162(m), as the case may be, or any successor provisions
thereto. Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability
under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the
Committee determines that the option or other award is not to comply with such
exemptive conditions.
(f) Tax Withholding. The Committee shall have the power to withhold, or
require a Participant to remit to the Company, an amount to satisfy any
withholding or other tax due with respect to any amount payable and/or shares
issuable under the Plan, and the Committee may defer such payment or issuance
unless indemnified to its satisfaction. Subject to the consent of the
Committee, a Participant may make an irrevocable election to have shares of
Common Stock otherwise issuable under an award withheld, tender back to the
Company shares of Common Stock received pursuant to an award or deliver to the
Company previously-acquired shares of
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Common Stock having a fair market value sufficient to satisfy all or part of the
Participant's estimated tax obligations associated with the transaction. Such
election must be made by a Participant prior to the date on which the relevant
tax obligation arises. The Committee may disapprove of any election and may
limit, suspend or terminate the right to make such elections.
(g) Listing and Legal Compliance. The Committee may suspend the exercise
or payment of any award so long as it determines that securities exchange
listing or registration or qualification under any securities laws is required
in connection therewith and has not been completed on terms acceptable to the
Committee. The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the exercise of
any Option or portion thereof prior to fulfillment of all of the following
conditions:
(i) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed;
(ii) The completion of any registration or other qualification of
such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Committee or Board shall, in
its absolute discretion, deem necessary or advisable;
(iii) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable;
(iv) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to
time for reasons of administrative convenience; and
(v) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
The Committee may, in its absolute discretion, also take whatever additional
actions it deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing stop-transfer
notices to agents and registrars.
(h) Beneficiary Designation. Subject to paragraph 6(d), Participants may
name, from time to time, beneficiaries (who may be named contingently or
successively) to whom benefits under the Plan are to be paid in the event of
their death before they receive any or all of such benefit. Each designation
will revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
(i) Rights of Participants. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, nor confer upon
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any Participant any right to continue in the employ of the Company for any
period of time or to continue his or her present or any other rate of
compensation. No employee or director shall have the right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
(j) Amendment, Suspension and Termination of Plan. This Plan will
terminate on, and no Options, SARs or Restricted Stock may be granted after,
the tenth anniversary of the Effective Date of the Plan. The Board of Directors
or the Committee may amend the Plan from time to time in such respects as the
Board of Directors or the Committee may deem advisable; provided, however, that
no such amendment shall be made without stockholder approval to the extent such
approval is required by law, agreement or the rules of any exchange upon which
the Common Stock is listed. No such amendment, suspension or termination shall
impair the rights of Participants under outstanding awards without the consent
of the Participants affected thereby or make any change that would disqualify
the Plan, or any other plan of the Company intended to be so qualified, from the
exemption provided by Rule 16b-3. No such amendment shall be made that would
cause the options and the SARs from qualifying as performance based compensation
as that term is used Section 162(m) of the Code.
The Committee may amend or modify any award in any manner to the extent
that the Committee would have had the authority under the Plan to initially
grant such award. No such amendment or modification shall impair the rights of
any Participant under any award without the consent of such Participant.
(k) Effective Date of Plan. The Plan shall become effective on April 15,
1999.
(l) Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Connecticut without regard to conflicts of laws thereof.
(m) Limitations Applicable to Section 16 Persons and Performance-Based
Compensation. Notwithstanding any other provision of this Plan, any Option,
SAR, or Restricted Stock granted to any individual who is then subject to
Section 16 of the Exchange Act shall be subject to any additional limitations
set forth in any applicable exemptive rule under Section 16 of the Exchange Act
(including any amendment to Rule 16b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent
permitted by applicable law, the Plan, Options, SARs and Restricted Stock
granted hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule. Furthermore, notwithstanding any other
provision of this Plan, any Option or SAR intended to qualify as performance-
based compensation as described in Section 162(m)(4)(C) of the Code shall be
subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and this Plan shall be deemed amended to the extent necessary to conform to such
requirements.
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(n) Consideration. In all cases, legal consideration shall be required for
each issuance of Options, Restricted Stock and SARs.
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