Exhibit 10.1
CBCOM, INC.
1998 STOCK OPTION PLAN
As adopted November 13, 1998
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1. PURPOSE OF PLAN
1.1 Purpose. The purpose of the Plan is to enable the Company to grant
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to selected Eligible Persons a favorable opportunity to acquire Common Stock
and, thereby, to create an incentive for them to remain in the employ of, or
provide services to, the Company or any Affiliate and to contribute to its
success.
1.2 Nature of Options. Options granted under the Plan may be Incentive
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Options or Nonstatutory Options, as determined by the Administrator at the time
of grant.
1.3 Rule 701. At the time the Plan is being adopted, the Company is not
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subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act
and is not an investment company registered or required to be registered under
the Investment Company Act of 1940. As such, the Company's offers and sales of
Common Stock under the Plan are, to the extent determined by the Administrator
in accordance with Applicable Laws, or any successor rule, intended to be exempt
from the registration requirements of the Securities Act under Rule 701 under
the Securities Act.
2. CERTAIN DEFINITIONS; CONSTRUCTION
2.1 Definitions. When used herein, the following terms shall have the
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meaning indicated:
(a) "Administrator" means the Board or any Committee as shall be
administering the Plan.
(b) "Affiliate" means, with respect to any entity, any "parent" or
"subsidiary" of the entity as those terms are defined in sections 424(e) and
424(f), respectively, of the Code.
(c) "Applicable Laws" means the laws, rules and regulations relating to
the adoption, implementation and administration of stock option plans under
applicable state corporate laws, federal and state securities laws and the Code.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended, and
applicable Treasury Regulations promulgated thereunder.
(f) "Committee" means a committee appointed by the Board in accordance
with section 4.1 hereof.
(g) "Common Stock" means the Common Stock of the Company.
(h) "Company" means CBCom, a Delaware corporation.
(i) "Disability" means total and permanent disability as defined in
section 22(e)(3) of the Code.
(j) "Eligible Persons" means (x) directors, officers and other
employees of the Company or of any Affiliate of the Company, as well as (y)
non-employee consultants and advisors who perform bona fide significant services
for or on behalf of the Company or any Affiliate (other than services rendered
in connection with an offer or sale of securities in a capital raising
transaction).
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(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(1) if the Common Stock is listed on an established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair market Value of a share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last market
trading day prior to the day of determination, as reported in The Wall Street
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Journal or such other source as the Administrator deems reliable;
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(2) if the Common Stock is quoted on the NASDAQ System (but not on the
Nasdaq National Market thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
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the Administrator deems reliable; and
(3) in the absence of an established trading market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(m) "Incentive Option" means an Option intended to qualify as an
incentive stock option within the meaning of section 422 of the Code.
(n) "Nonstatutory Option" means any Option other than an Incentive
Option.
(o) "Notice of Grant" means a written notice specifying certain
terms and conditions of an Option grant.
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an Option,
together with any Notice of Grant relating to the Option.
(r) "Optionee" means an Eligible Person or permitted transferee
who holds an outstanding Option.
(s) "Plan" means this 1998 Stock Option Plan, as originally
adopted and as amended from. time to time as herein provided.
(t) "Plan of Exchange" means any agreement, plan or arrangement
under which an outstanding Option may be surrendered in exchange for a newly
granted Option with a lower exercise price or other terms which differ from the
terms of the Option surrendered.
(u) "Section 16" means section 16 of the Securities Exchange Act
of 1934.
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(v) "Securities Act" means the Securities Act of 1933, as amended.
(w) "Termination of Employment" shall mean the date when any
employee-employer relationship between an Optionee and the Company is terminated
for any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement, but excluding (1)
terminations where there is a simultaneous reemployment or continuing employment
of an Optionee by the Company, (2) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (3) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company with the former employee. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Employment.
2.2 Construction. The Plan shall be construed in accordance with the
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following provisions:
(a) the adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company. Nothing in the Plan
shall be construed to limit the right of the Company (1) to establish any other
forms of incentives or compensation for employees of the Company, or (2) to
grant or assume options or other rights otherwise than under the Plan in
connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm or association;
(b) the existence of outstanding Options under the Plan shall not
affect the Company's right to effect adjustments, recapitalizations,
reorganizations or other changes in its or any other corporation's capital
structure or business, any merger or consolidation, any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting Common
Stock, the dissolution or liquidation of the Company's or any other
corporation's assets or business, or any other corporate act, whether similar to
the events described above or otherwise; and
(c) nothing in the Plan or in any Option Agreement shall confer
upon any Optionee any right to continue in the employ of the Company or shall
interfere with or restrict in any way the rights of the Company, which are
hereby expressly reserved, to discharge any Optionee at any time for any reason
whatsoever, with or without cause.
3. STOCK SUBJECT TO THE PLAN
3.1 Common Stock. Subject to adjustment as provided in section 9
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hereof, the stock to be offered and issued under the Plan shall be shares of
Common Stock, which may be either authorized and unissued shares or treasury
shares. The cumulative aggregate number of shares of Common Stock to be offered
and issued under the Plan shall not exceed Two Million Five Hundred Thousand
(2,500,000), subject to adjustment as provided in section 9 hereof.
Notwithstanding anything to the contrary contained herein, at no time may the
total number of shares issuable upon exercise of all outstanding Options, when
combined with the total number of shares provided for under any Company stock
bonus or similar plan exceed the applicable percentage as calculated in
accordance with the conditions and exclusions of California Corporate Securities
Rule 260.140.45, based on shares outstanding at the time such calculation is
made.
3.2 Calculation of Shares. If an Option shall expire or terminate for
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any reason without having been filly exercised, or is surrendered pursuant to a
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Plan of Exchange or otherwise, the unpurchased shares subject thereto shall
again be available for the purposes of the Plan. Where the exercise price of an
Option is paid by means of the Optionee's surrender of previously owned shares
of Common Stock or the Company's withholding of shares otherwise issuable upon
exercise of the Option as permitted herein, only the net number of shares issued
and which remain outstanding in connection with such exercise shall be deemed
"issued" and no longer available for issuance under the Plan.
3.3 Reservation of Shares. The Company will at all times during the
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term of the Plan reserve and keep available such number of shares of Common
Stock as shall be sufficient to satisfy the requirements of the Plan.
4. ADMINISTRATION
4.1 Administrator. The Plan shall be administered by the Board or,
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either in its entirety or only insofar as it relates to Eligible Persons subject
to Section 16 (if any), by a committee of the Board established for this purpose
in accordance with Applicable Laws. If necessary in order to comply with Rule
16b-3 under the Exchange Act as contemplated below, the Committee shall be
comprised solely of "non-employee directors" within the meaning of said Rule
16b-3. The foregoing notwithstanding, the Administrator may delegate
nondiscretionary administrative duties to such employees of the Company as it
deems proper and the Board, in its absolute discretion, may at any time and from
time to time exercise any and all rights and duties of the Administrator under
the Plan.
4.2 Rule 16b-3 Compliance. In the event, and for so long as, the Common
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Stock is registered under the Exchange Act, the Plan shall be administered in
accordance with the requirements of Rule 1 6b-3 under the Exchange Act, or any
successor rule thereto, with the intention that transactions under the Plan by
Eligible Persons subject to Section 16, if any, comply with the applicable
requirements of Rule 16b-3, or any successor rule thereto. In this regard, to
the extent any provision of the Plan or action by the Administrator fails to so
comply, it shall, to the extent permitted by Applicable Laws and deemed
advisable by the Administrator, be deemed null and void. Notwithstanding the
above, it shall remain the sole responsibility of Optionees, not of the Company
or the Administrator, to comply with applicable requirements of Section 16; and
neither the Company nor the Administrator shall be liable if the Plan or any
transaction under the Plan fails to comply with the applicable conditions of
Rule 16b-3 or any successor rule thereto, or if any Optionee incurs any
liability under Section 16 by reason of any transaction under the Plan.
4.3 Expenses: Exculpation. All expenses and liabilities which members
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of the Administrator incur in connection with the administration of this Plan
shall be borne by the Company. The Administrator may employ attorneys,
consultants, accountants, appraisers, brokers or other persons. The
Administrator, the Company and the Company's directors, officers and other
employees shall be entitled to rely upon the advice, opinions or valuations of
any such persons. No member of the Administrator shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan.
4.4 Powers of Administrator. Subject to the provisions of the Plan, and
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in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(a) to determine whether and to what extent Options are granted
hereunder;
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(b) to select from among Eligible Persons those individuals to
whom Options shall be granted hereunder;
(c) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(d) to approve forms of Option Agreements and other instruments
for use under the Plan;
(e) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Option granted hereunder, the exercise price, the
time or times when the Option may be exercised (which may be based on
performance or other criteria), any vesting, acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding the Option
or the shares of Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(I) to determine the Fair Market Value of Common Stock;
(g) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of Common Stock covered by such
Option shall have declined since the date the Option was granted;
(h) to construe and interpret the terms and provisions of the Plan
and of any Option Agreement and all Options granted under the Plan;
(i) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to sub-plans established
for the purpose of qualifying for preferred tax treatment under foreign tax
laws;
(j) to modify or amend each Option (subject to section 12.2
hereof), including the discretionary authority to extend the post-termination
exercisability period of any Option longer than is otherwise provided for in the
Plan;
(k) to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant or exercise of an Option
authorized by the Administrator;
(1) to institute from time to time a Plan of Exchange; and
(m) to make all other determinations it deems necessary or
advisable for administering the Plan or any Option Agreement or Option.
The Administrator's decisions, determinations and interpretations shall be final
and binding on all Optionees and other persons.
5. PARTICIPATION
Eligible Persons shall be eligible for selection to participate in the Plan
upon approval by the Administrator; provided, however, that only "employees"
(within the meaning of section 340 1(c) of the Code) of the Company shall be
eligible for the grant of Incentive Options. An individual who has been granted
an Option may, if otherwise eligible, be granted additional Options if the
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Administrator shall so determine. No Eligible Person is entitled to participate
in the Plan by matter of right; only those Eligible Persons who are selected by
the Administrator in its discretion shall participate in the Plan.
6. OPTION AGREEMENT; TERMS OF OPTIONS
6.1 Option Agreement. Each Option shall be evidenced by an Option
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Agreement, which shall be subject to the terms and conditions of the Plan and
shall contain such other terms and conditions that are not inconsistent with the
Plan as the Administrator may deem appropriate in each case. In the event of a
conflict between the terms or conditions of an Option Agreement and the terms
and conditions of the Plan, the terms and conditions of the Plan shall govern.
Failure of an Optionee to execute an Option Agreement shall not invalidate or
render void the grant of an Option hereunder.
6.2 Exercise Price. The exercise price of each Incentive Option shall
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be determined by the Administrator, but shall not be less than 100% of the Fair
Market Value of Common Stock on the date of grant. If an Incentive Option is
granted to an employee who at the time of grant owns (within the meaning of
section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of capital stock of the Company, the Option exercise price shall be
at least 110% of the Fair Market Value of Common Stock on the date of grant. The
exercise price of each Nonstatutory Option also shall be determined by the
Administrator, but shall not be less than 85% of the Fair Market Value of Common
Stock on the date of grant. The status of each Option granted under the Plan as
either an Incentive Option or a Nonstatutory Stock Option shall be determined by
the Administrator at the time the Administrator acts to grant the Option, and
shall be designated as such in the related Option Agreement.
6.3 "Reload" Options. At the time of grant or at any time thereafter,
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the Administrator may determine that an Optionee who has paid the exercise price
of an Option by surrendering previously owned shares of Common Stock or by the
Company's withholding of shares otherwise issuable upon exercise of the Option
shall automatically receive a new Option hereunder to purchase additional shares
of Common Stock equal to the number of shares so surrendered or withheld and may
specify the terms and conditions of such "reload" options.
6.4 Payment of Exercise Price. Except as provided below, payment in
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full shall be made for all shares of Common Stock purchased at the time written
notice of exercise of an Option is given to the Company, either in cash or by
delivery by the Optionee of Common Stock already owned by the Optionee, for all
or part of the aggregate exercise price of the shares as to which the Option is
being exercised, provided that the Fair Market Value of such Common Stock is
equal on the date of exercise to the aggregate exercise price of the shares as
to which the Option is being exercised. At the time an Option is granted or
exercised, the Administrator, in the exercise of its discretion, may authorize
one or more of the following additional methods of payment:
(a) to the extent consistent with applicable law, through
acceptance of the Optionee's full recourse promissory note for a portion of the
aggregate exercise price of the shares as to which the Option is being
exercised, payable on such terms and bearing such interest as determined by the
Administrator, which promissory note may be either secured or unsecured in such
manner as the Administrator shall approve (including, without limitation, by a
security interest in the shares of Common Stock so acquired);
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(b) any other property, so long as such property constitutes valid
consideration under Applicable Laws for the shares as to which the Option is
being exercised and is surrendered in good form for transfer; and
(c) subject to section 422 of the Code, by means of so-called
"cashless" exercises as permitted under applicable rules and regulations of the
Securities and Exchange Commission and the Federal Reserve Board.
6.5 Withholding. Irrespective of the form of payment of the exercise
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price of an Option, the delivery of shares pursuant to the exercise of an Option
shall be conditioned upon payment by the Optionee to the Company of amounts
sufficient to enable the Company to pay all federal, state, and local
withholding taxes applicable, in the Company's judgment, to the exercise. In the
discretion of the Administrator, such payment to the Company may be effected
through (a) the Company's withholding from the number of shares of Common Stock
that would otherwise be delivered to the Optionee by the Company on exercise of
the Option a number of shares of Common Stock equal in value (as determined by
the Fair Market Value of Common Stock on the date of exercise) to the aggregate
withholding taxes, (b) payment by the Optionee to the Company of the aggregate
withholding taxes in cash, (c) withholding by the Company from other amounts
contemporaneously owed by the Company to the Optionee, or (d) any combination of
these three methods, as determined by the Administrator in its discretion.
6.6 Vesting and Exercise.
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(a) Each Option granted under the Plan shall become exercisable and the
total number of shares subject thereto shall be purchasable, in a lump sum or in
such installments, which need not be equal, as the Administrator shall
determine; provided, however, that each Option shall become exercisable in full
no later than five years after such Option is granted, and each Option shall
become exercisable as to at least 20% of the shares of Common Stock covered
thereby on each anniversary of the date such Option is granted; and provided,
further, that if an Optionee shall not in any given installment period purchase
all of the shares which such Optionee is entitled to purchase in such
installment period, such Optionee's right to purchase any shares not purchased
in such installment period shall continue until the expiration or sooner
termination of the Optionee's Option. The Administrator may, at any time after
grant of an Option and from time to time, increase the number of shares
purchasable in any installment, subject to the total number of shares subject to
the Option and the limitations set forth in paragraph (f) of this section 6.6.
At any time and from time to time prior to the time when any exercisable Option
or exercisable portion thereof becomes unexercisable under the Plan or the
applicable Option Agreement, such Option or portion thereof may be exercised in
whole or in part; provided, however, that the Administrator may, by the terms of
the Option Agreement, require any partial exercise to be with respect to a
specified minimum number of shares. No Option or installment thereof shall be
exercisable except with respect to whole shares. Fractional share interests
shall be disregarded, except that they may be accumulated as provided above and
except that if such a fractional share interest constitutes the total shares of
Common Stock remaining available for purchase under an Option at the time of
exercise, the Optionee shall be entitled to receive on exercise a certified or
bank cashier's check in an amount equal to the Fair Market Value of such
fractional share of stock.
(b) To the extent that the aggregate Fair Market Value (determined on
the date of grant) of Common Stock with respect to which an Incentive Option
granted hereunder (together with any incentive Options granted the Optionee
under all other plans of the Company) are exercisable for the first time by an
Optionee in any calendar year under the Plan exceeds $100,000, such Option shall
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be treated as a Nonstatutory Option to the extent required by section 422 of the
Code. The rule set forth in the preceding sentence shall be applied by taking
Options into account in the order in which they were granted.
(c) Exercising an Option in any manner shall decrease the number of
shares thereafter available for purposes of the Plan, and for sale under the
Option, by the number of shares as to which the Option is exercised.
(d) The Administrator may, at any time, extend the exercise period of
an Option as stated in the relevant Option Agreement for any period not
exceeding the original expiration date of the Option on such terms and
conditions as it may determine.
(e) Notwithstanding any provision of this section 6.6, in no event
shall any Option be exercised after the expiration date of the Option set forth
in the applicable Option Agreement.
(f) If Common Stock acquired upon exercise of any Incentive Option is
disposed of in a disposition that, under section 422 of the Code, disqualifies
the Optionee from the application of section 421(a) of the Code, the holder of
the Common Stock immediately before the disposition shall comply with any
requirements imposed by the Company in order to enable the Company to secure the
related income tax deduction to which it is entitled in such event.
7. TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY; REPURCHASE
7.1 Termination of Employment. Upon Termination of Employment of an
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Optionee, other than upon the Optionee's death or Disability, the Optionee may
exercise his or her Option, but only within such period of time as is specified
in the Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration date of the Option set forth in the applicable Option Agreement). In
the case of an Incentive Option, such period of time for exercise shall not
exceed three months from the date of termination, and in the absence of a
specified time in the Option Agreement, the Incentive Option shall remain
exercisable for three months following Termination of Employment of the
Optionee. In the case of a Nonstatutory Option, such period of time for exercise
shall not exceed two years from the date of termination, and in the absence of a
specified time in the Option Agreement, the Nonstatutory Option shall remain
exercisable for two years following Termination of Employment of the Optionee.
If, on the date of termination, the Optionee is not entitled to exercise the
Optionee's entire Option, the shares covered by the unexercisable portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the shares covered by the Option shall revert to the
Plan.
7.2 Disability. in the event of a Termination of Employment of an
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Optionee as a result of the Optionee's Disability, the Optionee may exercise his
or her Option (a) at any time within twelve months from the date of such
termination, in the case of an Incentive Option, or (b) at any time within two
years from the date of such termination, in the case of a Nonstatutory Option,
but in each case only to the extent that the Optionee was entitled to exercise
it at the date of such termination (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the shares covered by the unexercisable portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option also shall revert to the Plan.
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7.3 Death. The Option may be exercised at any time (a) within twelve
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months following the date of death, in the case of an Incentive Option, or (b)
within two years following the date of death, in the case of a Nonstatutory
Option, but in either case, in no event later than the expiration of the term of
such Option as set forth in the Option Agreement, by the Optionee's estate or by
a person who acquired the right to exercise the Option by bequest or
inheritance. If, after an Optionee's death, the Optionee's estate or a person
who acquired the right to exercise the Option by bequest or inheritance is not
entitled to exercise the entire Option, the shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
7.4 Leave of Absence. Unless otherwise provided in the applicable
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Option Agreement, and to the extent permitted by section 422 of the Code, an
Optionee's employment shall not be deemed to terminate by reason of sick leave,
military leave or other leave of absence approved by the Company if the period
of any such leave does not exceed a period approved by the Company, or such
longer period, if any, for which the Optionee's right to reemployment by the
Company is guaranteed either contractually or by statute; provided, however,
that, with respect to Incentive Options, a leave of absence or other change in
the employee-employer relationship shall constitute a Termination of Employment
if, and to the extent that, such leave of absence or other change interrupts
employment for the purposes of section 422(a)(2) of the Code and the
then-applicable regulations and revenue rulings under said section. Unless
otherwise determined by the Administrator in its discretion, vesting of options
shall be suspended during a leave of absence.
7.5 Repurchase of Shares. Shares of Common Stock issuable upon exercise
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of Options are subject to the following repurchase rights:
(a) Company's Right to Repurchase on Termination of Employment.
Any Optionee who holds shares of Common Stock acquired pursuant to the exercise
of an Option shall be required to sell such shares to the Company upon
termination of employment with the Company. Such repurchase shall be made in
cash within ninety days after the date of termination of employment.
(b) Purchase Price. The price the Company shall pay for any
purchases of shares of Common Stock pursuant to this section 7.5 shall be the
Fair Market Value as defined in section 2.1(1).
(c) Right of Designation. Should the Company at any time have the
right to purchase shares of Common Stock obtained upon exercise of Options, and
the Company at that time is unwilling or unable to effect that repurchase, the
Company may designate that the Company's then-existing shareholders may purchase
those shares, pro-rata among all the shareholders desiring to purchase those
shares, for the purchase price set forth in this section 7.5.
(d) Termination of Repurchase Rights. The repurchase rights in
this section 7.5 shall terminate and be of no further force or effect upon the
effectiveness of a registration statement, covering the Company's Common Stock,
filed by the Company under the Securities Act of 1933.
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8. TRANSFERABILITY OF OPTIONS
8.1 Options Generally Nontransferable. Except as provided in section
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8.2 hereof, each Option shall, by its terms, be nontransferable by the Optionee
other than by will or the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by the Optionee or by his or her
guardian or legal representative. More particularly, but without limiting the
generality of the immediately preceding sentence, an Option may not be assigned,
transferred, pledged or hypothecated (whether by operation of law or otherwise),
and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
any Option contrary to the provisions of the Plan and the applicable Option
Agreement, and any levy of any attachment or similar process upon an Option,
shall be null and void, and otherwise without effect, and the Administrator may,
in its sole discretion, upon the happening of any such event, terminate such
Option forthwith.
8.2 Permitted Transfers. In the discretion of the Administrator and
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subject to Applicable Laws, an Incentive Option may be transferred by the
Optionee to a revocable living trust of which the Optionee is the grantor and a
principal beneficiary. In the discretion of the Administrator and subject to
Applicable Laws, a Nonstatutory Option may be transferred by the Optionee (a) by
gift or otherwise to the Optionee's spouse or other immediate relative, or to a
trust or estate in which the Optionee or his or her spouse or other immediate
relative has a substantial beneficial interest, or (b) pursuant to a qualified
domestic relations order (as defined by the Code). However, any Incentive Option
or Nonstatutory Option so transferred shall continue to be subject to all the
terms and conditions contained in the Option Agreement evidencing such Option.
8.3 Restricted Securities. The Options granted under the Plan are, and
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the Common Stock issuable upon exercise of the Options will be, characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public
offering. Under such laws and applicable regulations the Common Stock may only
be (a) sold pursuant to an effective registration statement filed under the
Securities Act of 1933 (the "Act"), or (b) sold without registration under only
in certain limited circumstances, as set forth in Rule 701 and Rule 144
promulgated under the Act.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
SALE
9.1 Changes in Capitalization. Subject to any required action by the
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stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon surrender or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in this respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
11
<PAGE>
9.2 Dissolution or Liquidation. In the event of the proposed
----------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Administrator may, in the exercise of
its sole discretion in such instances, declare that any Option shall terminate
as of a date fixed by the Administrator and give each Optionee the right to
exercise his or her Option as to all or any part of the Common Stock covered
thereby, including shares as to which the Option would not otherwise be
exercisable.
9.3 Merger or Sale of Assets. In the event of a merger of the Company
--------------------------
with or into another corporation in which the Company is not the surviving
entity, or the sale of substantially all of the assets of the Company, each
outstanding Option shall be assumed or an equivalent Option substituted by the
successor corporation or any Affiliate of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
Option, the Optionee shall have the right to exercise the Option as to all of
the shares covered thereby, including shares as to which it would not otherwise
be exercisable. If an Option is exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee that the Option shall be fully exercisable for a period of
less than 15 days from the date of such notice, and the Option shall terminate
upon the expiration of the period specified in such notice.
9.4 Fractional Shares. No fractional share of Common Stock shall be
------------------
issued under the Plan on account of any adjustment under any provision of this
section 9.
10. DATE OF GRANT AND EXERCISE
10.1 Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination to grant
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
10.2 Date of Exercise. An Option shall be deemed to be exercised when
the Secretary of the Company receives written notice from the Optionee of such
exercise, payment of the exercise price determined pursuant to section 6.4
hereof and set forth in the Option Agreement, and all representations,
indemnifications and documents reasonably requested by the Administrator.
10.3 Issuance of Share Certificates. The Company shall not be required
to issue or deliver any certificate or certificates for shares of Common Stock
purchased upon the exercise of any 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;
(b) the completion of any registration or other qualification of
such shares under any state or federal law, or under the rules or regulations of
the Securities and Exchange Commission or any other governmental regulatory body
which the Administrator shall, in its absolute discretion, deem necessary or
advisable;
(c) the obtaining of any approval or other clearance from any
state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable;
12
<PAGE>
(d) the lapse of such reasonable period of time following the
exercise of the Option as the Administrator may establish from time to time
solely for reasons of administrative convenience; and
(e) the receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
10.4 Rights of Optionees and Beneficiaries. The Company shall pay all
---------------------------------------
amounts payable hereunder only to the Optionee or beneficiaries entitled thereto
pursuant to the Plan. The Company shall not be liable for the debts, contracts
or engagements of any Optionee or his or her beneficiaries, and rights to cash
payments under the Plan may not be taken in execution by attachment or
garnishment, or by any other legal or equitable proceeding while in the hands of
the Company.
10.5 Government Regulations. The Plan, and the grant hereunder and
-----------------------
exercise of Options and the issuance and delivery of shares of Common Stock
subject to Options, shall be subject to compliance with all applicable federal
and state laws, rules and regulations (including but not limited to state and
federal securities law) and federal margin requirements and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
11. LIABILITY OF COMPANY
11.1 Absence of Authority. The inability of the Company to obtain
----------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any shares of Common Stock hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which.
such requisite authority shall not have been obtained.
11.2 Grants in Excess of Available Shares. If shares of Common Stock
---------------------------------------
covered by an Option exceeds, as of the date of grant, the number of shares
which may be issued under the Plan without additional stockholder approval, such
Option shall be void with respect to such excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares subject to
the Plan is timely obtained in accordance with section 12 .2(c) hereof.
12. EFFECTIVE DATE; AMENDMENT AND TERMINATION
12.1 Effective Date. The Plan shall be effective as of the date of its
---------------
adoption by the Board, provided it is approved by the stockholders of the
Company within twelve months before or after such date. Options may be granted
but not exercised prior to stockholder approval of the Plan. If any Options are
so granted and stockholder approval shall not have been obtained within twelve
months of the date of adoption of this Plan by the Board, such Options shall
terminate retroactively as of the date they were granted.
13
<PAGE>
12.2 Amendment: Termination.
-----------------------
(a) The Plan shall terminate automatically as of the earlier of(l)
the sale of all shares available for issuance under the Plan, (2) the close of
business on the day preceding the tenth anniversary date of its adoption by the
Board, or (3) earlier as provided below.
(b) The Administrator may at any time suspend, amend or terminate
the Plan and may, with the consent of an Optionee, make such modifications of
the terms and conditions of such Optionee's Option as it shall deem advisable.
No Option may be granted during any suspension of the Plan or after such
termination. The amendment, suspension or termination of the Plan shall not,
without the consent of the Optionee affected thereby, alter or impair any rights
or obligations under any Option theretofore granted under the Plan.
(c) The Company shall obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Rule 1 6b-3 under
the Exchange Act or section 422 of the Code (or any successor rule or statute or
other Applicable Law, including the requirements of any exchange or quotation
system on which the Common Stock is listed or quoted). Such stockholder
approval, if required, shall be obtained in such a manner and to such a degree
as the Administrator determines is required by Applicable Laws
(d) Notwithstanding anything to the contrary contained herein, the
Plan shall terminate on the earlier to occur of the tenth (10th) anniversary of
the date it is (i) adopted by the Board or (ii) approved by the Stockholders.
13. MISCELLANEOUS
13.1 Rights and Privileges of Stock Ownership: Investment Intent. An
--------------------------------------------------------------
Optionee shall not be entitled to the rights and privileges of stock ownership
as to any shares of Common Stock not actually issued to the Optionee. Upon
exercise of an Option at a time when there is not in effect under the Securities
Act a Registration Statement relating to the Common Stock issuable upon exercise
or payment therefor and available for delivery a Prospectus meeting the
requirements of section 10(a)(3) of the Securities Act, the Optionee shall
represent and warrant in writing to the Company that the shares purchased are
being acquired for investment and not with a view to the distribution thereof.
13.2 Reports to Optionees. The Company shall furnish to each Optionee
----------------------
under the Plan the Company's annual report and such other periodic reports, if
any, as are disseminated by the Company in the ordinary course to its
stockholders. Notwithstanding the immediately preceding sentence, the Company
shall furnish its financial statements to each Optionee at least annually.
13.3 Legend Conditions. The following legends shall be placed on the
------------------
certificates evidencing the shares of Common Stock issued upon exercise of an
Option:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ('ACT'), OR
APPLICABLE STATE SECURITIES LAWS, NOR THE SECURITIES LAWS OF
ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THOSE SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY
TO THE COMPANY, THAT THE SALE OR TRANSFER IS PURSUANT TO
AN EXEMPTION TO THE REGISTRATION REQUIREMENTS OF THOSE
SECURITIES LAWS.
14
<PAGE>
(b) THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RIGHTS OF REPURCHASE AS SET FORTH IN THE COMPANY'S
1998 STOCK OPTION PLAN.
(c) Any legend require by the state securities laws of the state
or other jurisdiction in which an Optionee resides.
Additionally, and not by way of limitation, the Administrator may impose such
restrictions on any Common Stock issued pursuant to the Plan as it may deem
advisable, including, without limitation, restrictions under the requirements of
any stock exchange upon which Common Stock is then traded. At such time as the
Company's shares are publicly traded, the Administrator shall seek advice of
counsel as to whether the legends listed above may be removed from the stock
certificates.
13.4 Use of Proceeds. Proceeds realized pursuant to the exercise of
-----------------
Options shall constitute general finds of the Company.
13.5 Governing Law. The Plan shall be governed by, and construed in
--------------
accordance with the internal laws of the State of California (without giving
effect to conflicts of law principles).
* * *
15
<PAGE>
CBCOM, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the day of , by and between
-------- -------------
CBCom, Inc. (the "Company"), and---------------------------------------------
("Optionee").
W I T N E S S E T H
-------------------
WHEREAS, pursuant to the CBCom, Inc. 1998 Stock Option Plan (the "Stock
Option Plan"), the Plan Administration Committee of the Board of Directors of
the Company (the "Administrator") has authorized the granting to Optionee of an
Incentive Option to purchase the number of shares of Common Stock of the Company
specified in Paragraph 1 hereof, at the exercise price specified therein, such
option to be for the term and upon the terms and conditions hereinafter stated;
NOW, THEREFORE, in consideration of the promises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. Number of Shares: Option Price. Pursuant to said action of the
----------------------------------
Administrator, the Company hereby grants to Optionee the option ("Option") to
purchase, upon and subject to the terms and conditions of said Stock Option
Plan,, all or any part of shares of Common Stock of the Company for
---------
cash or Common Stock of the Company at the exercise price of $ per share
------
("Exercise Price").
2. Terms. This Option shall expire on the day before the tenth
-----
anniversary (fifth anniversary if Optionee owns more than 10% of the voting
stock of the Company, a Parent or a Subsidiary on the date of this Agreement) of
the date hereof unless such Option shall have been terminated prior to that date
in accordance with the provisions of the Stock Option Plan or this Agreement.
The terms "Parent" and "Subsidiary" herein mean a parent corporation or a
subsidiary corporation, as such terms are defined in the Stock Option Plan.
3. Vesting. This Option shall vest as follows:
-------
After the Option vests, it shall thereafter remain wholly exercisable until and
including the day before the tenth anniversary (fifth anniversary if Optionee
owns more than 10% of the voting stock of the Company, a Parent or a Subsidiary
on the date of this Agreement) of the date hereof, provided that Optionee is
then and has continuously been in the employ of the Company, a Parent or a
Subsidiary; subject, however, to the provisions of Paragraph 5 hereof.
4. Exercise. The Option may be exercised by written notice delivered to
--------
the Company stating the number of shares with respect to which the Option is
being exercised, together with (i) the Exercise Price for the number of options
being exercised (in the consideration therefor contemplated by Section 6.4 of
the Stock Option Plan, including by means of a check made payable to the Company
and/or shares of Common Stock of the Company in the amount of the purchase price
of such shares) and (ii) the written statement provided for in Paragraph 9
hereof, if required by said Paragraph 9. Not less than ten (10) shares may be
purchased at any one time unless the number purchased is the total number
purchasable under such Option at the time. Only whole shares may be purchased.
<PAGE>
5. Exercise on Termination of Employment. In the event Optionee's
-----------------------------------------
employment is terminated, Optionee's right to exercise his Option, if any, shall
be governed by Section 7 of the Stock Option Plan.
6. Nontransferability. This Option may not be assigned or transferred
------------------
except by will or by the laws of descent and distribution, and may be exercised
only by Optionee during his lifetime and after his death, by his representative
or by the person entitled thereto under his will or the laws of intestate
succession.
7. Optionee Not a Shareholder. Optionee shall have no rights as a
-----------------------------
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued, except as provided in Section 9 of the
Stock Option Plan.
8. Modification and Termination. The rights of Optionee are subject to
-----------------------------
modification and termination in certain events as provided in Sections 7 and 9
of the Stock Option Plan.
9. Restrictions on Sale of Shares.
----------------------------------
(a) Securities Laws Restrictions. Optionee understands that the
------------------------------
Options granted under the Plan are, and the Common Stock issuable upon exercise
of the Options will be, characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering. Under such laws and applicable
regulations the Common Stock may only be (a) sold pursuant to an effective
registration statement filed under the Securities Act of 1933 (the "Act"), or
(b) sold without registration under only in certain limited circumstances, as
set forth in Rule 701 and Rule 144 promulgated under the Act. In this
connection, Optionee represents and warrants to the Company that Optionee is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act. Accordingly, Optionee represents and
agrees that upon his exercise of the Option, in whole or in part, unless there
is in effect at that time under the Securities Act of 1933, as amended, a
registration statement relating to the shares issued to him, or an exemption
from registration requirements under Rule 701 or otherwise, he will acquire the
shares issuable upon exercise of this Option for the purpose of investment and
not with a view to their resale or further distribution, and that upon such
exercise thereof he will furnish to the Company a written statement to such
effect, satisfactory to the Company in form and substance. Optionee agrees that
any certificate issued upon exercise of this Option may bear a legend indicating
that the transferability of the shares represented thereby is restricted in
accordance with applicable state and federal securities law. Any person or
persons entitled to exercise this Option under the provisions of Paragraphs 5
and 6 hereof shall, upon each exercise of the Option under circumstances in
which Optionee would be required to furnish such a written statement, also
furnish to the Company a written statement to the same effect, satisfactory to
the Company in form and substance.
(b) Repurchase Rights. Shares of Common Stock acquired pursuant to
-----------------
the exercise of an Option are subject to certain repurchase rights of the
Company, and under certain conditions may or must be sold to the Company or the
Company's designees as set forth in Section 7 of the Plan.
10. Plan Governs. This Agreement and the Option evidenced hereby are
-------------
made and granted pursuant to the Stock Option Plan and are in all respects
<PAGE>
limited by and subject to the express terms and provisions of that Plan, as it
may be amended from time to time and construed by the Administrator. It is
intended that this Option shall qualify as an incentive stock option as defined
by Section 422 of the Code, and this Agreement shall be construed in a manner
which will enable this Option to be so qualified. Optionee hereby acknowledges
receipt of a copy of the Stock Option Plan.
11. Notices. All notices to the Company shall be addressed to the
-------
Administrator at CBCom, Inc., 15260 Ventura Blvd., Suite 1200, Sherman Oaks, CA
91403, and all notices to Optionee shall be addressed to Optionee at the address
of Optionee set forth below, or to such other address as either may designate to
the other in writing. A notice shall be deemed to be duly given if and when
enclosed in a properly addressed sealed envelope deposited, and sent by
certified mail, return receipt requested, with the United States Postal Service.
In lieu of giving notice by mail as aforesaid, written notices under this
Agreement may be given by personal delivery to Optionee or to the Administrator
(as the case may be).
12. Sale or Other Disposition. Optionee understands that, under current
-------------------------
law, beneficial tax treatment resulting from the exercise of this Option will be
available only if certain requirements of the Code are satisfied, including
without limitation, the requirement that no disposition of shares of Common
Stock of the Company acquired pursuant to exercise of this Option be made within
two years from the grant date or within one year after the transfer of such
shares to him or her. If Optionee at any time contemplates the disposition
(whether by sale, gift, exchange, or other form of transfer) of any shares
acquired by exercise of this Option, he or she will first notify the Company in
writing of such proposed disposition and cooperate with the Company in complying
with all applicable requirements of law, which, in the judgment of the Company,
must be satisfied prior to such disposition. In addition to the foregoing,
Optionee hereby agrees that if Optionee disposes (whether by sale, exchange,
gift, or otherwise) of any of the shares acquired by exercise of this Option
within two years of the grant date or within one year after the transfer of such
shares to Optionee upon exercise of this Option, then Optionee shall notify the
Company of such disposition in writing within 30 days after the date of such
disposition. Said written notice shall state the date of such disposition, and
the type and amount of the consideration received for such share or shares by
Optionee in connection therewith. In the event of any such disposition, the
Company shall have the right to require Optionee to immediately pay the Company
the amount of taxes (if any) which the Company is required to withhold under
federal andlor state law as a result of the granting or exercise of the subject
Option in the disposition of the subject shares.
13. Option Not an Employment Contract. Neither this Agreement, nor the
----------------------------------
grant of the Option hereunder to Optionee, constitutes or shall be construed as
a contract or agreement for continuing employment or services with the Company.
Any rights to employment or the rendering of services shall be governed by a
separate agreement. This Agreement does riot constitute a waiver by the Company
of any rights of the Company under any agreement of employment the Company may
have at any time with Optionee.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CBCom, Inc.
CBCom, Inc.
By:
-------------------------
Name:
Title:
OPTIONEE:
----------------------------
Name:
Address:
----------------------------
----------------------------
----------------------------
<PAGE>
CBCOM, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the day of , by and between CBCom,
------ ---------
Inc. (the "Company"), and ("Optionee").
---------------------------
W I T N E S S E T H
-------------------
WHEREAS, pursuant to the CBCom, Inc. 1998 Stock Option Plan (the "Stock
Option Plan'), the Plan Administration Committee of the Company's Board of
Directors (the "Administrator") has authorized the granting to Optionee of a
Nonstatutory Option to purchase the number of shares of Common Stock of the
Company specified in Paragraph 1 hereof, at the exercise price specified
therein, such option to be for the term and upon the terms and conditions
hereinafter stated;
NOW, THEREFORE, in consideration of the promises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. Number of Shares: Option Price. Pursuant to said action of the
----------------------------------
Administrator, the Company hereby grants to Optionee the option ("Option") to
purchase, upon and subject to the terms and conditions of said Stock Option
Plan, all or any part of shares of Common Stock of the Company for
---------
cash or Common Stock of the Company at the exercise price of $ per
share ("Exercise Price"). ---------
2. Term. This Option shall expire on the day before the tenth
----
anniversary of the date hereof unless such Option shall have been terminated
prior to that date in accordance with the provisions of the Stock Option Plan or
this Agreement. The terms "Parent" and "Subsidiary" herein mean a parent
corporation or a subsidiary corporation, as such terms are defined in the Stock
Option Plan.
3. Vesting. This Option shall vest as follows:
-------
--------------------------------------------------------------------------------
After the Option vests, it shall thereafter remain wholly exercisable until and
including the day before the tenth anniversary of the date hereof, provided that
Optionee is then and has continuously been in the employ of the Company, a
Parent or a Subsidiary; subject, however, to the provisions of Paragraph 5
hereof.
4. Exercise. The Option may be exercised by written notice delivered to
--------
the Company stating the number of shares with respect to which the Option is
being exercised, together with (i) the Exercise Price for the number of Options
being exercised (in the consideration therefor contemplated by Section 6.4 of
the Stock Option Plan, including by means of a check made payable to the Company
and/or shares of Common Stock of the Company in the amount of the Exercise
Price) plus the amount of applicable federal, state and local withholding taxes
and (ii) the written statement provided for in Paragraph 9 hereof, if required
by said Paragraph 9. Not less than ten (10) shares may be purchased at any one
time unless the number purchased is the total number purchasable under such
Option at the time. Only whole shares may be purchased.
<PAGE>
5. Exercise on Termination of Employment. If Optionee shall cease to be
-------------------------------------
a(n) (insert employee, director, etc.) of the Company, a Parent
--------------
or a Subsidiary, Optionee's right to exercise his Option, if any, shall be
governed by Section 7 of the Stock Option Plan.
6. Nontransferability. Except as otherwise permitted by Section 8 of
------------------
the Stock Option Plan, the Option may not be assigned or transferred.
7. Optionee Not a Shareholder. Optionee shall have no rights as a
-----------------------------
shareholder with respect to the Common Stock of the Company covered by such
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued, except as provided in Section 9 of the
Stock Option Plan.
8. Modification and Termination. The rights of Optionee are subject to
-----------------------------
modification and termination in certain events as provided in Sections 7 and 9
of the Stock Option Plan.
9. Restrictions on Sale of Shares.
----------------------------------
(a) Securities Laws Restrictions. Optionee understands that the
------------------------------
Options granted under the Plan are, and the Common Stock issuable upon exercise
of the Options will be, characterized as "restricted securities" under the
federal securities laws inasmuch as they are being acquired from the Company in
a transaction not involving a public offering. Under such laws and applicable
regulations the Common Stock may only be (a) sold pursuant to an effective
registration statement filed under the Securities Act of 1933 (the "Act"), or
(b) sold without registration under only in certain limited circumstances, as
set forth in Rule 701 and Rule 144 promulgated under the Act. In this
connection, Optionee represents and warrants to the Company that Optionee is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act. Accordingly, Optionee represents and
agrees that upon his exercise of the Option, in whole or in part, unless there
is in effect at that time under the Securities Act of 1933, as amended, a
registration statement relating to the shares issued to him, or an exemption
from registration requirements under Rule 701 or otherwise, he will acquire the
shares issuable upon exercise of this Option for the purpose of investment and
not with a view to their resale or further distribution, and that upon such
exercise thereof he will furnish to the Company a written statement to such
effect, satisfactory to the Company in form and substance. Optionee agrees that
any certificate issued upon exercise of this Option may bear a legend indicating
that the transferability of the shares represented thereby is restricted in
accordance with applicable state and federal securities law. Any person or
persons entitled to exercise this Option under the provisions of Paragraphs 5
and 6 hereof shall, upon each exercise of the Option under circumstances in
which Optionee would be required to furnish such a written statement, also
furnish to the Company a written statement to the same effect, satisfactory to
the Company in form and substance.
(b) Repurchase Rights. Shares of Common Stock acquired pursuant to
-----------------
the exercise of an Option are subject to certain repurchase rights of the
Company, and under certain conditions may or must be sold to the Company or the
Company's designees as set forth in Section 7 of the Plan.
10. Plan Governs. This Agreement and the Option evidenced hereby are
-------------
made and granted pursuant to the Stock Option Plan and are in all respects
limited by and subject to the express terms and provisions of that Plan, as it
<PAGE>
may be amended from time to time and construed by the Administrator. Optionee
hereby acknowledges receipt of a copy of the Stock Option Plan.
11. Notices. All notices to the Company shall be addressed to the
-------
Administrator at CBCom, Inc., 15260 Ventura Blvd., Suite 1200, Sherman Oaks, CA
91403, and notices to Optionee shall, be addressed to Optionee at the address of
Optionee set forth below, or to such other address as either may designate to
the other in writing. A notice shall be deemed to be duly given if and when
enclosed in a properly addressed sealed envelope, sent via certified mail,
return receipt requested, postage prepaid, with the United States Postal
Service. In lieu of giving notice by mail as aforesaid, written notice under
this Agreement may be given by personal delivery to Optionee or to the
Administrator (as the case may be).
12. Sale or Other Disposition. If Optionee at any time contemplates the
-------------------------
disposition (whether by sale, gift, exchange, or other form or transfer) of any
shares acquired by exercise of this Option, he or she will first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
13. Option Not an Employment Contract. Neither this Agreement, nor the
----------------------------------
grant of the Option hereunder to Optionee, constitutes or shall be construed as
a contract or agreement for continuing employment or services with the Company.
Any rights to employment or the rendering of services shall be governed by a
separate agreement. This Agreement does not constitute a waiver by the Company
of any rights of the Company under any agreement of employment the Company may
have at any time with Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CBCom, Inc.
By:
--------------------------
Name:
Title:
OPTIONEE:
--------------------------
Name:
Address:
--------------------------
--------------------------
--------------------------
