EXHIBIT 4.6
BAM! ENTERTAINMENT, INC.
NOTICE OF NONQUALIFIED STOCK OPTION AWARD
Xxxxxxx's Name and Address: Xxxxxxx Xxxxxx
___________________________
___________________________
You have been granted an option to purchase shares of Common Stock,
subject to the terms and conditions of this Notice of Stock Option Award (the
"Notice") and the Stock Option Award Agreement (the "Option Agreement") attached
hereto, as follows. This Option is intended to be a Non-Qualified Stock Option.
This Option is not pursuant to the BAM! Entertainment, Inc.'s 2000 Stock
Incentive Plan (the "Plan"). Unless otherwise defined herein, the defined terms
in this Notice and the Option Agreement shall have the defined meanings set
forth in Exhibit B.
Date of Award January 22, 2002
Vesting Commencement Date January 21, 2002
Exercise Price per Share $3.25
Total Number of Shares Subject
to the Option (the "Shares") 250,000
Total Exercise Price $812,500
Type of Option: Non-Qualified Stock Option
Expiration Date: January 22, 2012
Post-Termination Exercise Period: Three (3) Months
Vesting Schedule:
Subject to Xxxxxxx's Continuous Service and other limitations set forth
in this Notice and the Option Agreement, the Option may be exercised, in whole
or in part, in accordance with the following schedule:
1/3 of the Shares subject to the Option shall vest on each anniversary
of the Vesting Commencement Date.
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity.
Except as set forth below, in the event of the Grantee's change in
status from Employee to Consultant or from an Employee whose customary
employment is 20 hours or more per week to an Employee whose customary
employment is fewer than 20 hours per week, vesting of the
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Option shall continue only to the extent determined by the Administrator as of
such change in status.
In the event the Company terminates Xxxxxxx's Continuous Service as an
Employee and Grantee has not engaged in conduct during Xxxxxxx's Continuous
Service that would constitute Cause (as determined in accordance with the
then-effective Employment Agreement between Grantee and the Company), the Option
shall automatically become fully vested on the effective date of such
termination. For the purpose of this Option, a termination by the Company of
Grantee's Continuous Service shall include (but not be limited to) a termination
by Grantee for Good Reason (as determined in accordance with the then-effective
Employment Agreement between Grantee and the Company).
In addition, the Option automatically shall become fully vested
immediately prior to the closing of any Corporate Transaction.
IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice and the Option Agreement.
BAM! Entertainment, Inc., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx, Chief Executive Officer
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE OR THE OPTION AGREEMENT SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
GRANTEE'S EMPLOYER TO TERMINATE XXXXXXX'S CONTINUOUS SERVICE, WITH OR WITHOUT
CAUSE, AND WITH OR WITHOUT NOTICE.
The Grantee acknowledges receipt of the Option Agreement and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts the Option subject to all of the terms and provisions hereof. The
Grantee has reviewed this Notice and the Option Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Notice, and fully understands all provisions of this Notice and the Option
Agreement. The Grantee hereby agrees that all disputes arising out of or
relating to this Notice and the Option Agreement shall be resolved in accordance
with Section 17 of the Option Agreement. The Grantee further agrees to notify
the Company upon any change in the residence address indicated in this Notice.
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Dated: ________________ Signed: _________________________
Xxxxxxx Xxxxxx
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BAM! ENTERTAINMENT, INC.
STOCK OPTION AWARD AGREEMENT
1. Grant of Option. BAM! Entertainment, Inc., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice and
this Stock Option Award Agreement (the "Option Agreement"), which are
incorporated herein by reference.
If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.
2. Exercise of Option.
(a) Right to Exercise. The Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of this Option Agreement. In the event of a Corporate
Transaction, each Award will terminate upon the consummation of the Corporate
Transaction, unless the Award is assumed by the successor corporation or Parent
thereof in connection with the Corporate Transaction. Except as provided
otherwise in an individual Award Agreement, in the event of any Corporate
Transaction there will not be any acceleration of vesting or exercisability of
any Award. No partial exercise of the Option may be for less than the lesser of
five percent (5%) of the total number of Shares subject to the Option or the
remaining number of Shares subject to the Option. In no event shall the Company
issue fractional Shares.
(b) Method of Exercise. The Option shall be exercisable only by
delivery of an Exercise Notice (attached as Exhibit A) which shall state the
election to exercise the Option, the whole number of Shares in respect of which
the Option is being exercised, and such other provisions as may be required by
the Administrator. The Exercise Notice shall be signed by the Grantee and shall
be delivered in person, by certified mail, or by such other method as determined
from time to time by the Administrator to the Company accompanied by payment of
the Exercise Price. The Option shall be deemed to be exercised upon receipt by
the Company of such written notice accompanied by the Exercise Price, which, to
the extent selected, shall be deemed to be satisfied by use of the broker-dealer
sale and remittance procedure to pay the Exercise Price provided in Section
4(d), below.
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(c) Taxes. No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction of
applicable income tax, employment tax, and social security tax withholding
obligations, including, without limitation, obligations incident to the receipt
of Shares or the disqualifying disposition of Shares received on exercise of an
Incentive Stock Option. Upon exercise of the Option, the Company or the
Grantee's employer may offset or withhold (from any amount owed by the Company
or the Grantee's employer to the Grantee) or collect from the Grantee or other
person an amount sufficient to satisfy such tax obligations and/or the
employer's withholding obligations.
3. Xxxxxxx's Representations. The Grantee understands that neither the
Option nor the Shares exercisable pursuant to the Option have been registered
under the Securities Act of 1933, as amended or any United States securities
laws.
4. Method of Payment. Payment of the Exercise Price shall be made by any
of the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law :
(a) cash;
(b) check;
(c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require (including
withholding of Shares otherwise deliverable upon exercise of the Option) which
have a Fair Market Value on the date of surrender or attestation equal to the
aggregate Exercise Price of the Shares as to which the Option is being exercised
(but only to the extent that such exercise of the Option would not result in an
accounting compensation charge with respect to the Shares used to pay the
exercise price); or
(d) payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (i) shall provide written instructions to a
Company designated brokerage firm to effect the immediate sale of some or all of
the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction.
5. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws.
6. Termination or Change of Continuous Service. In the event the Grantee's
Continuous Service terminates, the Grantee may, to the extent otherwise so
entitled at the date of such termination (the "Termination Date"), exercise the
Option during the Post-Termination Exercise Period. In no event shall the Option
be exercised later than the Expiration Date set forth
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in the Notice. In the event of the Grantee's change in status from Employee,
Director or Consultant to any other status of Employee, Director or Consultant,
the Option shall remain in effect and, except to the extent otherwise determined
by the Administrator, continue to vest; provided, however, with respect to any
Incentive Stock Option that shall remain in effect after a change in status from
Employee to Director or Consultant, such Incentive Stock Option shall cease to
be treated as an Incentive Stock Option and shall be treated as a Non-Qualified
Stock Option on the day three (3) months and one (1) day following such change
in status. Except as provided in Sections 7 and 8 below, to the extent that the
Grantee is not entitled to exercise the Option on the Termination Date, or if
the Grantee does not exercise the Option within the Post-Termination Exercise
Period, the Option shall terminate.
7. Disability of Grantee. In the event the Grantee's Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he or she was otherwise
entitled to exercise it on the Termination Date; provided, however, that if such
Disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code and the Option is an Incentive Stock Option, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Grantee is not
entitled to exercise the Option on the Termination Date, or if the Grantee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.
8. Death of Grantee. In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's Termination of Continuous Service as a
result of his or her Disability, the Grantee's estate, or a person who acquired
the right to exercise the Option by bequest or inheritance, may exercise the
Option, but only to the extent the Grantee could exercise the Option at the date
of termination, within twelve (12) months from the date of death (but in no
event later than the Expiration Date). To the extent that the Grantee is not
entitled to exercise the Option on the date of death, or if the Option is not
exercised to the extent so entitled within the time specified herein, the Option
shall terminate.
9. Transferability of Option. The Option, if an Incentive Stock Option,
may not be transferred in any manner other than by will or by the laws of
descent and distribution and may be exercised during the lifetime of the Grantee
only by the Grantee. The Option, if a Non-Qualified Stock Option may be
transferred by will, by the laws of descent and distribution, and to the extent
and in the manner authorized by the Administrator, to members of the Grantee's
immediate family (as determined by the Administrator), to an estate planning
trust of the Grantee or pursuant to a domestic relations order. The terms of the
Option shall be binding upon the executors, administrators, heirs and successors
of the Grantee.
10. Term of Option. The Option may be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.
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11. Stop-Transfer Notices. In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement or the Notice, the
Company may issue appropriate "stop transfer" instructions to its transfer
agent, if any, and, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
12. Refusal to Transfer. The Company shall not be required (i) to transfer
on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Option Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
13. Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Incentive Stock Option. If the Option qualifies as
an Incentive Stock Option, there will be no regular federal income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as income for purposes of the alternative minimum tax for federal tax
purposes and may subject the Grantee to the alternative minimum tax in the year
of exercise.
(b) Exercise of Incentive Stock Option Following Disability. If
the Grantee's Continuous Service terminates as a result of Disability that is
not total and permanent disability as defined in Section 22(e)(3) of the Code,
to the extent permitted on the date of termination, the Grantee must exercise an
Incentive Stock Option within three (3) months of such termination for the
Incentive Stock Option to be qualified as an Incentive Stock Option.
(c) Exercise of Non-Qualified Stock Option. On exercise of a
Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If the Grantee is an Employee or a former Employee, the Company
will be required to withhold from the Grantee's compensation or collect from the
Grantee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.
(d) Disposition of Shares. In the case of a Non-Qualified Stock
Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes and subject to tax at a maximum rate of 20%. In the case of
an Incentive Stock Option, if Shares transferred pursuant to the Option are held
for more than one year after receipt of the Shares and are disposed more than
two
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years after the Date of Award, any gain realized on disposition of the Shares
also will be treated as capital gain for federal income tax purposes and subject
to the same tax rates and holding periods that apply to Shares acquired upon
exercise of a Non-Qualified Stock Option. If Shares purchased under an Incentive
Stock Option are disposed of prior to the expiration of such one-year or
two-year periods, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market
Value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.
14. Lock-Up Agreement.
(a) Agreement. The Grantee, if requested by the Company
and the lead underwriter of any public offering of the Common Stock or other
securities of the Company (the "Lead Underwriter"), hereby irrevocably agrees
not to sell, contract to sell, grant any option to purchase, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise
transfer or dispose of any interest in any Common Stock or any securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock (except Common Stock included in such public
offering or acquired on the public market after such offering) during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act of 1933, as amended, or such shorter
period of time as the Lead Underwriter shall specify. The Grantee further agrees
to sign such documents as may be requested by the Lead Underwriter to effect the
foregoing and agrees that the Company may impose stop-transfer instructions with
respect to such Common Stock subject until the end of such period. The Company
and the Grantee acknowledge that each Lead Underwriter of a public offering of
the Company's stock, during the period of such offering and for the 180-day
period thereafter, is an intended beneficiary of this Section 14.
(b) No Amendment Without Consent of Underwriter. During
the period from identification as a Lead Underwriter in connection with any
public offering of the Company's Common Stock until the earlier of (i) the
expiration of the lock-up period specified in Section 14(a) in connection with
such offering or (ii) the abandonment of such offering by the Company and the
Lead Underwriter, the provisions of this Section 14 may not be amended or waived
except with the consent of the Lead Underwriter.
15. Entire Agreement: Governing Law. The Notice and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice
and this Option Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice
and this Option Agreement are to be construed in accordance with and governed by
the internal laws of the State of California (as permitted by Section 1646.5 of
the California Civil Code, or any similar successor provision) without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties. Should any provision of the Notice or this
Option Agreement be determined by a court of
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law to be illegal or unenforceable, such provision shall be enforced to the
fullest extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.
16. Headings. The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation.
17. Dispute Resolution. The provisions of this Section 17 shall be
the exclusive means of resolving disputes arising out of or relating to the
Notice and this Option Agreement. The Company, the Grantee, and the Grantee's
assignees (the "parties") shall attempt in good faith to resolve any disputes
arising out of or relating to the Notice and this Option Agreement by
negotiation between individuals who have authority to settle the controversy.
Negotiations shall be commenced by either party by notice of a written statement
of the party's position and the name and title of the individual who will
represent the party. Within thirty (30) days of the written notification, the
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to resolve the dispute. If the dispute
has not been resolved by negotiation, the parties agree that any suit, action,
or proceeding arising out of or relating to the Notice or this Option Agreement
shall be brought in the United States District Court for the Northern District
of California (or should such court lack jurisdiction to hear such action, suit
or proceeding, in a California state court in the County of Santa Xxxxx) and
that the parties shall submit to the jurisdiction of such court. The parties
irrevocably waive, to the fullest extent permitted by law, any objection the
party may have to the laying of venue for any such suit, action or proceeding
brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR
MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or
more provisions of this Section 17 shall for any reason be held invalid or
unenforceable, it is the specific intent of the parties that such provisions
shall be modified to the minimum extent necessary to make it or its application
valid and enforceable.
18. Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States mail by certified mail (if the parties are
within the United States) or upon deposit for delivery by an internationally
recognized express mail courier service (for international delivery of notice),
with postage and fees prepaid, addressed to the other party at its address as
shown beneath its signature in the Notice, or to such other address as such
party may designate in writing from time to time to the other party.
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EXHIBIT A
BAM! ENTERTAINMENT, INC.
EXERCISE NOTICE
BAM! Entertainment, Inc.
000 X. Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Secretary
1. Exercise of Option. Effective as of today, ______________, ___
the undersigned (the "Grantee") hereby elects to exercise the Grantee's option
to purchase ___________ shares of the Common Stock (the "Shares") of BAM!
Entertainment, Inc. (the "Company") pursuant to the Non-Qualified Stock Option
Award Agreement (the "Option Agreement") and Notice of Stock Option Award (the
"Notice") dated ______________. Unless otherwise defined herein, the terms
defined in the Option Agreement shall have the same defined meanings in this
Exercise Notice.
2. Representations of the Grantee. The Grantee acknowledges that
the Grantee has received, read and understood the Notice and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing
such Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
unless there is (i) any increase or decrease in the number of issued Shares
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Shares, or similar transaction affecting the Shares,
(ii) any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company, or (iii) as the Administrator
may determine in its discretion, any other transaction with respect to Common
Stock to which Section 424(a) of the Code applies or a similar transaction;
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 and its determination shall
be final, binding and conclusive. Except as the Administrator determines, 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 hereof shall be made with respect to, the number or price of Shares
subject to an Award.
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The Grantee shall enjoy rights as a shareholder until such time as the
Grantee disposes of the Shares.
4. Delivery of Payment. The Grantee herewith delivers to the
Company the full Exercise Price for the Shares, which, to the extent selected,
shall be deemed to be satisfied by use of the broker-dealer sale and remittance
procedure to pay the Exercise Price provided in Section 4(d) of the Option
Agreement.
5. Tax Consultation. The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee's purchase or
disposition of the Shares. The Grantee represents that the Grantee has consulted
with any tax consultants the Grantee deems advisable in connection with the
purchase or disposition of the Shares and that the Grantee is not relying on the
Company for any tax advice.
6. Taxes. The Grantee agrees to satisfy all applicable federal,
state and local income and employment tax withholding obligations and herewith
delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations. In the case
of an Incentive Stock Option, the Grantee also agrees, as partial consideration
for the designation of the Option as an Incentive Stock Option, to notify the
Company in writing within thirty (30) days of any disposition of any shares
acquired by exercise of the Option if such disposition occurs within two (2)
years from the Date of Award or within one (1) year from the date the Shares
were transferred to the Grantee. If the Company is required to satisfy any
federal, state or local income or employment tax withholding obligations as a
result of such an early disposition, the Grantee agrees to satisfy the amount of
such withholding in a manner that the Administrator prescribes.
7. Restrictive Legends. The Grantee understands and agrees that
the Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of
the Shares together with any other legends that may be required by the Company
or by state or federal securities laws:
(a) Securities Law Restrictions:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.
(b) Option Agreement Restrictions:
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER HELD BY THE ISSUER OR ITS
ASSIGNEE(S) AS SET FORTH IN THE OPTION AGREEMENT BETWEEN THE
ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF
WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE
SHARES.
(c) Removal of Legend. When all of the following events
have occurred, the Shares then held by Grantee will no longer be subject to the
legend referred to in Section 7(b): (i) the expiration or termination of the
Lock-up Agreement of Section 14 of the Option Agreement (and of any agreement
entered pursuant to Section 14). After such time, and upon Xxxxxxx's request, a
new certificate or certificates representing the Shares not repurchased shall be
issued without the legend referred to in Section 7(b), and delivered to Grantee.
8. Successors and Assigns. The Company may assign any of its
rights under this Exercise Notice to single or multiple assignees, and this
agreement shall inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth, this Exercise
Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.
9. Headings. The captions used in this Exercise Notice are
inserted for convenience and shall not be deemed a part of this agreement for
construction or interpretation.
10. Dispute Resolution. The provisions of Section 17 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of or
relating to this Exercise Notice.
11. Governing Law; Severability. This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State of
California (as permitted by Section 1646.5 of the California Civil Code, or any
similar successor provision) without giving effect to any choice of law rule
that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of California to the rights and duties of the
parties. Should any provision of this Exercise Notice be determined by a court
of law to be illegal or unenforceable, such provision shall be enforced to the
fullest extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.
12. Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit in the United States mail by certified mail (if the parties are
within the United States) or upon deposit for delivery by an internationally
recognized express mail courier service (for international delivery of notice),
with postage and fees prepaid, addressed to the other party at its address as
shown below beneath its signature, or to such other address as such party may
designate in writing from time to time to the other party.
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13. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.
14. Entire Agreement. The Notice and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Option Agreement and this Exercise Notice (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties.
[Signature Page Follows]
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Submitted by: Accepted by:
GRANTEE: BAM! ENTERTAINMENT, INC.
By:______________________________________
__________________________________ Title:___________________________________
Xxxxxxx Xxxxxx
Address: Address:
__________________________________ BAM! Entertainment, Inc.
__________________________________ 000 X. Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
I, ______________________, spouse of the Grantee, have read and hereby approve
the foregoing Exercise Notice. In consideration of the Company's granting my
spouse the right to purchase the Shares as set forth in the Exercise Notice, I
hereby agree to be bound irrevocably by the Agreement and further agree that any
community property or similar interest that I may have in the Shares shall
hereby be similarly bound by the Exercise Notice. I hereby appoint my spouse as
my attorney-in-fact with respect to any amendment or exercise of any rights
under the Exercise Notice.
______________________________
Spouse of Grantee
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EXHIBIT B
DEFINITIONS OF TERMS
FROM THE AMENDED AND RESTATED
BAM! ENTERTAINMENT, INC. 2000 STOCK INCENTIVE PLAN
Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of the
Committees appointed to administer the Plan.
(b) "Applicable Laws" means the legal requirements
relating to the administration of stock incentive plans, if any, under
applicable provisions of federal and state securities laws, the corporate laws
of California and, to the extent other than California, the corporate law of the
state of the Company's incorporation, the Code, the rules of any applicable
stock exchange or national market system, and the rules of any foreign
jurisdiction applicable to Awards granted to residents therein.
(c) "Award" means the grant of an Option, Restricted
Stock or other right or benefit under the Plan.
(d) "Award Agreement" means the written agreement
evidencing the grant of an Award executed by the Company and the Grantee,
including any amendments thereto.
(e) "Board" means the Board of Directors of the Company.
(f) "Cause" means the definition of such term specified
in the Award Agreement. If no such definition is included in the Award
Agreement, then "Cause" shall mean, with respect to the termination by the
Company or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in the
then-effective written agreement between the Grantee and the Company or such
Related Entity, or in the absence of such then-effective written agreement or
definition, that such termination is based on, in the determination of the
Administrator, the Grantee's: (i) refusal or failure to act in accordance with
any specific, lawful direction or order of the Company or a Related Entity; (ii)
performance of any act or failure to perform any act in bad faith and to the
material detriment of the Company or a Related Entity; (iii) dishonesty,
intentional misconduct or material breach of any agreement with the Company or a
Related Entity; or (iv) commission of embezzlement, misappropriation of trade
secrets or any felony involving dishonesty, breach of trust, or physical or
emotional harm to any person. At least 14 calendar days prior to the termination
of the Grantee's Continuous Service pursuant to (i) above, the Company shall
provide the Grantee with notice of the Company's or such Related Entity's intent
to terminate, the reason therefor, and an opportunity for the Grantee to cure
such defects in his or her service to the Company's or such Related Entity's
satisfaction. During this 14 day (or longer) period, no Award issued to the
Grantee under the Plan may be exercised or purchased.
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(g) "Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Committee" means any committee appointed by the
Board to administer the Plan.
(i) "Common Stock" means the common stock of the Company.
(j) "Company" means BAM! Entertainment, Inc., a Delaware
corporation.
(k) "Consultant" means any person (other than an Employee
or a Director, solely with respect to rendering services in such person's
capacity as a Director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such Related Entity.
(l) "Continuous Service" means that the provision of
services to the Company or a Related Entity in any capacity of Employee,
Director or Consultant, is not interrupted or terminated. Continuous Service
shall not be considered interrupted in the case of (i) any approved leave of
absence, (ii) transfers among the Company, any Related Entity, or any successor,
in any capacity of Employee, Director or Consultant, or (iii) any change in
status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as
otherwise provided in the Award Agreement). An approved leave of absence shall
include sick leave, military leave, or any other authorized personal leave. For
purposes of Incentive Stock Options, no such leave may exceed ninety (90) days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.
(m) "Corporate Transaction" means any of the following
transactions to which the Company is a party:
(i) a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company (including the capital
stock of the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company;
(iii) any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger; or
(iv) acquisition by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit
plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities.
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(n) "Director" means a member of the Board or the board
of directors of any Related Entity.
(o) "Disability" means that a Grantee would qualify for
benefit payments under the long-term disability policy of the Company or the
Related Entity to which the Grantee provides services regardless of whether the
Grantee is covered by such policy; provided that if no such long-term disability
policy exists, Disability shall mean that a Grantee is permanently unable to
carry out the responsibilities and functions of the position held by the Grantee
by reason of any medically determinable physical or mental impairment. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.
(p) "Employee" means any person, including an Officer or
Director, who is an employee of the Company or any Related Entity. The payment
of a director's fee by the Company or a Related Entity shall not be sufficient
to constitute "employment" by the Company.
(q) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(r) "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:
(i) Where there exists a public market for the
Common Stock, the Fair Market Value shall be (A) the closing price for a Share
for the last market trading day prior to the time of the determination (or, if
no closing price was reported on that date, on the last trading date on which a
closing price was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock or the Nasdaq
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a Share on the Nasdaq Small Cap Market for the
day prior to the time of the determination (or, if no such prices were reported
on that date, on the last date on which such prices were reported), in each
case, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or
(ii) In the absence of an established market for
the Common Stock of the type described in (i), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith and in a manner
consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations.
(s) "Grantee" means an Employee, Director or Consultant
who receives an Award under the Plan.
(t) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(u) "Non-Qualified Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.
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(v) "Officer" means a person who is an officer of the
Company or a Related Entity within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.
(w) "Option" means an option to purchase Shares pursuant
to an Award Agreement granted under the Plan.
(x) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
"Plan" means this 2000 Stock Incentive Plan.
"Post-Termination Exercise Period" means the period specified in the Award
Agreement of not less than thirty (30) days commencing on the date of
termination of the Grantee's Continuous Service, or such longer period as
may be applicable upon death or Disability.
(y) "Registration Date" means the first to occur of (i)
the closing of the first sale to the general public of (A) the Common Stock
or (B) the same class of securities of a successor corporation (or its
Parent) issued pursuant to a Corporate Transaction in exchange for or in
substitution of the Common Stock, pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended; and (ii) in the event of a
Corporate Transaction, the date of the consummation of the Corporate
Transaction if the same class of securities of the successor corporation
(or its Parent) issuable in such Corporate Transaction shall have been sold
to the general public pursuant to a registration statement filed with and
declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on or prior to the date of consummation
of such Corporate Transaction.
(z) "Related Entity" means any Parent, Subsidiary and any
business, corporation, partnership, limited liability company or other
entity in which the Company, a Parent or a Subsidiary holds a substantial
ownership interest, directly or indirectly.
(aa) "Restricted Stock" means Shares issued under the Plan
to the Grantee for such consideration, if any, and subject to such
restrictions on transfer, rights of first refusal, repurchase provisions,
forfeiture provisions, and other terms and conditions as established by the
Administrator.
(bb) "Share" means a share of the Common Stock.
(cc) "Subsidiary" means a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 424(f) of the
Code.
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