<PAGE> 1
EXHIBIT 99.3
FORM OF OPTION ASSUMPTION AGREEMENT
<PAGE> 2
JUPITER COMMUNICATIONS, INC.
STOCK OPTION ASSUMPTION AGREEMENT
INTERNET RESEARCH GROUP
(FORMERLY, COLLABORATIVE MARKETING, INC.)
1999 STOCK OPTION PLAN
OPTIONEE: ,
-----------
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 16th day of March,
2000.
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Internet Research
Group, a California corporation ("IRG"), which were granted to Optionee under
the Internet Research Group (formerly, Collaborative Marketing, Inc.) 1999 Stock
Option Plan.
WHEREAS, each of those options is evidenced by an Incentive Stock Option
Agreement (the "Option Agreement") issued to Optionee under the applicable Plan.
WHEREAS, IRG has been acquired by Jupiter Communications, Inc., a
Delaware corporation ("Jupiter") through the merger of IRG with and into Jupiter
(the "Merger") pursuant to the Agreement and Plan of Reorganization, by and
between Jupiter and IRG, dated February 28, 2000 (the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require the obligations
of IRG under each outstanding option under the Plans to be assumed by Jupiter at
the consummation of the Merger and the holder of each outstanding option to be
issued an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the exchange
ratio (the "Exchange Ratio") in effect for the Merger is 0.09091106 of a share
of Jupiter common stock ("Jupiter Stock") for each outstanding share of IRG
common stock ("IRG Stock").
WHEREAS, the purpose of this Agreement is to evidence the assumption by
Jupiter of the outstanding options held by Optionee at the time of the
consummation of the Merger (the "Effective Time") and to reflect certain
adjustments to those options which have become necessary in connection with
their assumption by Jupiter in the Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of IRG Stock subject to the options held by
optionee immediately prior to the effective time (the "IRG Options") and the
exercise price payable per share are set forth below. Jupiter hereby assumes, as
of the effective time, all the duties and obligations of IRG under each of the
IRG Options. In connection with such assumption, the
<PAGE> 3
number of shares of Jupiter Stock purchasable under each IRG option hereby
assumed and the exercise price payable thereunder have been adjusted to reflect
the exchange ratio. Accordingly, the number of shares of Jupiter Stock subject
to each IRG option hereby assumed shall be as specified for that option below,
and the adjusted exercise price payable per share of Jupiter Stock under the
assumed IRG option shall also be as indicated for that option below.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
IRG STOCK OPTIONS JUPITER ASSUMED OPTIONS
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
# of Shares
# of Shares of IRG Exercise Price of Jupiter Adjusted Exercise
Common Stock per Share Common Stock Price per Share
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ $
--------------------------------------------------------------------------------------------------
</TABLE>
2. The intent of the foregoing adjustments to each assumed IRG Option
is to assure that the spread between the aggregate fair market value of the
shares of Jupiter Stock purchasable under each such option and the aggregate
exercise price as adjusted pursuant to this Agreement will not, immediately
after the consummation of the Merger, be greater than the spread which existed,
immediately prior to the Merger, between the then aggregate fair market value of
the IRG Stock subject to the IRG Option and the aggregate exercise price in
effect at such time under the Option Agreement. Such adjustments are also
intended to preserve, immediately after the Merger, on a per share basis, the
same ratio of exercise price per option share to fair market value per share
which existed under the IRG Option immediately prior to the Merger.
3. Each IRG Option shall continue to have a maximum term of ten (10)
years from the date of grant, subject to earlier termination (as provided in the
applicable Option Agreement) following Optionee's cessation of service or
employment.
4. The following provisions shall govern each IRG Option hereby
assumed by Jupiter:
(a) Unless the context otherwise requires, all references in
each Option Agreement and the Plan (to the extent incorporated into such
Option Agreement) shall be adjusted as follows: (i) all references to the
"Company" shall mean Jupiter, (ii) all references to "Common Stock" or
"Shares" shall mean shares of Jupiter Stock, (iii) all references to the
"Board" shall mean the Board of Directors of Jupiter and (iv) all
references to the "Committee" shall mean the Compensation Committee of
the Jupiter Board of Directors.
(b) Except as modified by this Agreement, the grant date and
the expiration date of each assumed IRG Option and all other provisions
which govern either the exercise or the termination of the assumed IRG
Option shall remain the same as set forth in the Option Agreement
applicable to that option, and the provisions of the applicable Plan and
the Option Agreement shall accordingly govern and control Optionee's
rights under this Agreement to
2
<PAGE> 4
purchase Jupiter Stock under the assumed IRG Option.
(c) Each IRG Option assumed by Jupiter which was originally
designated as an Incentive Stock Option under the federal tax laws shall
retain such Incentive Stock Option status to the maximum extent allowed
by law.
(d) Each IRG Option hereby assumed by Jupiter shall continue to
vest and become exercisable in accordance with the same installment
vesting schedule in effect for that option under the applicable Option
Agreement immediately prior to the Effective Time; except, that the
number of shares subject to each such installment shall be adjusted to
reflect the Exchange Ratio.
(e) For purposes of applying any and all provisions of the
Option Agreement and the applicable Plan relating to Optionee's status as
an employee or a consultant of IRG, Optionee shall be deemed to continue
in such status as an employee or a consultant for so long as Optionee
renders services as an employee or a consultant, respectively to Jupiter
or any present or future majority-owned Jupiter subsidiary. Accordingly,
the provisions of the Option Agreement governing the termination of the
assumed IRG Options upon Optionee's cessation of service as an employee
or a consultant of IRG shall hereafter be applied on the basis of
Optionee's cessation of employee or consultant status, respectively with
Jupiter and its subsidiaries, and each assumed IRG Option shall
accordingly terminate, within the designated time period in effect under
the Option Agreement for that option, following such cessation of
employee or consultant status, respectively.
(f) The adjusted exercise price payable for the Jupiter Stock
subject to each assumed IRG Option shall be payable in any of the forms
authorized under the Option Agreement applicable to that option. For
purposes of determining the holding period of any shares of Jupiter Stock
delivered in payment of such adjusted exercise price, the period for
which such shares were held as IRG Stock prior to the Merger shall be
taken into account.
(g) In order to exercise each assumed IRG Option, Optionee must
deliver to Jupiter a written notice of exercise in which the number of
shares of Jupiter Stock to be purchased thereunder must be indicated. The
exercise notice must be accompanied by payment of the adjusted exercise
price payable for the purchased shares of Jupiter Stock and should be
delivered to Jupiter at the following address:
Jupiter Communications, Inc.
627 Broadway
New York, NY 10012
Attention: Amy Bromberg
------------
5. Except to the extent specifically modified by this Option
Assumption Agreement,
3
<PAGE> 5
all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
IN WITNESS WHEREOF, Jupiter Communications, Inc. has caused this Stock
Option Assumption Agreement to be executed on its behalf by its duly-authorized
officer as of the 16th day of March, 2000.
JUPITER COMMUNICATIONS, INC.
By:
-------------, ------------------------
Jean Robinson, Chief Financial Officer
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her IRG Options hereby assumed by Jupiter are as set
forth in the Option Agreement, the Plan and such Stock Option Assumption
Agreement.
, OPTIONEE
---------------
DATED: , 2000
------------------
4
