LinuxMall.com, Inc.
2000 STOCK OPTION PLAN
NOTICE OF GRANT
This is to certify that as of the _____ day of March, 2000,
LinuxMall.com, Inc., a Delaware corporation (the "Company"), pursuant to the
LinuxMall.com, Inc. 2000 Stock Option Plan (the "Plan"), hereby grants to
_____________________ ("Optionee") an employee of the Company (as defined in the
Plan), an option to purchase _____ shares of its common stock, par value $0.01
per share, subject to the following terms and conditions:
(1) The option is intended to qualify as an incentive stock option
within the meaning of section 422 of the Internal Revenue Code of 1986, as
amended, (the "Code").
(2) The exercise price, payable upon exercise of the option shall be
$1.75 per share, subject to adjustment as provided in paragraph 6 below.
(3) The exercise of the option shall be subject to the following
conditions:
(a) The option shall be exercisable with respect to 12.50% of
the total number of shares subject to the option three months after the date of
grant and with respect to an additional 6.25% at the end of each three-month
period thereafter during the next succeeding four years if the Optionee is still
employed by the Company on such dates. The plan administrator administering the
Plan (the "Administrator") may in his discretion accelerate the exercisability
of the option subject to the terms of the Plan and such other terms and
conditions as he deems necessary and appropriate. All or any part of the shares
with respect to which the right to purchase has accrued may be purchased at the
time of such accrual or at any time or times thereafter during the option
period.
(b) The option may be exercised by giving written notice to
the Company, attention of the Secretary, specifying the number of shares to be
purchased, accompanied by the full purchase price for the shares to be purchased
either in cash, by check, or by shares of the Company's common stock that has
been held by the Optionee for a period of at least 6 months. For this purpose,
the value of the Company's common stock shall be the fair market value per share
of the Company's common stock on the date of exercise (or if the date of
exercise is not a trading day, on the next preceding trading day), determined as
provided in the Plan.
(c) In connection with the exercise of the option, the Company
may, in its discretion, make a loan to the Optionee, which may, in the
discretion of the Company, be without interest. The amount of any such loan may
not exceed the fair market value, at the date of exercise, of the shares covered
by the option, or portion thereof, exercised by the Optionee. No loan shall have
an initial term exceeding two years, but any such loan may be renewable at the
discretion of the Administrator. Each loan shall be secured by shares of common
stock of the Company having fair market value at least equal to 150% of the
principal amount of the loan. The Optionee shall deliver a promissory note to
the Company which shall be in the form provided by the Company and consistent
with the terms of the Plan. The promissory note shall provide for full recourse
against the Optionee. Each loan shall also be subject to such other terms and
conditions as the Administrator shall determine.
(d) The Optionee may satisfy any obligation to pay the minimum
amount required by income tax or other laws to be withheld in connection with an
option exercise by electing to have the Company withhold shares of common stock
of the Company, or, if the Administrator so determines, by delivering shares of
common stock of the Company, having a value equal to the amount required to be
withheld. Each such election or delivery must be made on or prior to the date of
determination of the amount of tax required to be withheld and shall be
irrevocable. The Administrator may disapprove of any such election or delivery
or suspend or terminate the right to make such elections or deliveries.
Additional restriction apply, as provided in the Plan, if the Optionee is a
person described in Section 16(a) of the Securities Exchange Act of 1934, as
amended.
(e) At the time of any exercise of the option, the Company
may, if it shall determine it necessary or desirable for any reason, require the
Optionee (or his or her heirs, legatees or legal representatives, as the case
may be) as a condition upon the exercise thereof, to deliver to the Company a
written representation of present intention to purchase shares for investment
and not for distribution. In the event such representation is required to be
delivered, an appropriate legend may be placed upon each certificate delivered
to the Optionee upon his or her exercise of part or all of the Option and a stop
transfer order may be placed with the transfer agent if any. The option shall
also be subject to the requirement that, if at any time the Company determines,
in its discretion, that the listing registration or qualification of the shares
subject to the option upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the issue or
purchase of shares thereunder, the option may not be exercised in whole or in
part unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Company.
(4) The term of the option is ten years, subject to earlier termination
as provided in paragraph 5 below. The option is thus not exercisable to any
extent after the expiration of ten years from the date of this Notice of Grant,
or after any earlier expiration date that may be applicable under the terms of
paragraph 5 below, unless the Administrator extends the term of the option for
such additional period as the Administrator, in its discretion determines,
provided that in no event shall the aggregate option period, including the
original term of the option and any extension thereof, exceed ten years.
(5) The option is not transferable by the Optionee other than by will
or by the laws of descent and distribution and during the life of the Optionee
it is exercisable only by the Optionee or the Optionee's legal representative.
(6) In the event the employment of the Optionee with the Company is
terminated for any reason other than death, permanent disability or retirement,
the option shall expire and all rights to purchase shares pursuant thereto shall
terminate immediately. Temporary absence from employment because of illness,
vacation, and approved leaves of absence shall not be considered to terminate
employment or interrupt continuous employment. In the event of termination of
employment because of death or permanent disability (as that term is defined in
Section 22(e)(3) of the Internal Revenue Code, as now in effect or as shall be
subsequently amended), the option may be exercised in full without regard to the
vesting schedule established by paragraph 2(a) above, by the Optionee or, if the
Optionee is not living, by the Optionee's heirs, legatees or legal
representatives, as the case may be, during its specified term or, if earlier,
prior to three years after the date of death or permanent disability. In the
event of termination of employment due to retirement, the option may be
exercised by the Optionee (or if the Optionee dies, by the Optionee's heirs,
legatees or legal representatives, as the case may be) at any time during its
specified term prior to three years after the date of such termination, but only
to the extent the option was exercisable at the date of such termination.
(7) The number of shares subject to the option and the exercise price
per share shall be adjusted as provided in the Plan in the event of certain
changes in the capitalization of the Company, as provided in the Plan.
(8) Upon the occurrence of a "Change in Control" (as defined in the
Plan), the option shall be exercisable, in full, without regard to the vesting
schedule specified in paragraph 2(a) above. Notwithstanding any other provisions
in the Plan, prior to passage of one year from and after the Change in Control,
the Optionee shall have the right to require the Company (or in certain
circumstances, an acquiring company), to purchase his or her options at price
equal to the Change in Control Price ( reduced by the exercise price applicable
to the Options) by written notice to the Company, attention of the Secretary.
The amount payable to each Optionee shall be in cash or by certified check and
shall be reduced by any taxes required to be withheld.
(9) The granting of this option shall not confer upon the Optionee any
right to be continued in the employment of the Company, or interfere in any way
with the right of the Company to terminate his or her employment at any time.
(10) Neither the Optionee, nor his or her heirs, legatees or legal
representatives shall have any rights of stockholders with respect to the shares
subject to the option until such shares are actually issued upon exercise of the
option.
(11) The Optionee shall enter into an Option Agreement with the Company
which shall incorporate this Notice of Grant and contain such additional terms
as may be determined by the Company, in its sole discretion, to be necessary or
appropriate.
(12) In the event of any conflict between this Notice of Grant and the
terms of the Plan, the terms of the Plan shall prevail.
IN WITNESS WHEREOF, this instrument has been executed by the duly
authorized representative as of the date above written.
LinuxMall.com, Inc.
By: ______________________________
Ray Goshorn, Administrator
