NON-QUALIFIED STOCK OPTION AGREEMENT ZOO ENTERTAINMENT, INC.
Exhibit 10.97
AGREEMENT
made as of the [__] day of [__], between Zoo Entertainment, Inc. (the
“Company”), a Delaware corporation, and [__] (the
“Participant”).
WHEREAS,
the Company desires to grant to the Participant an Option to purchase shares of
its common stock, $0.001 par value per share (the
“Shares”), [outside of/pursuant to] the Company’s 2007 Employee, Director and
Consultant Stock Plan, as amended (the “Plan”) [(but otherwise subject to and
governed by all of the terms and conditions of the Plan, except for Section 4(c)
thereof, and this Agreement)];
WHEREAS,
the Company and the Participant understand and agree that any terms used and not
defined herein have the same meanings as in the Plan; and
WHEREAS,
the Company and the Participant each intend that the Option granted herein shall
be a Non-Qualified Option.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as
follows:
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1.
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GRANT OF
OPTION.
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The
Company hereby grants to the Participant the right and option to purchase all or
any part of an aggregate of [__] Shares, on the terms and conditions and subject
to all the limitations set forth herein, under United States securities and tax
laws, and in the Plan, which is incorporated herein by
reference. [Notwithstanding the foregoing, the option to purchase the
number of Shares set forth herein is conditioned upon, and cannot be exercised
prior to, the effectiveness of those certain amendments to the Company’s
Certificate of Incorporation authorizing an increase in the number of authorized
Shares from 250,000,000 Shares to 3,500,000,000 Shares and effecting a reverse
stock split at a ratio of one for 600 Shares (the “Charter Amendments”), and in
the event the Charter Amendments are not filed prior to September 1, 2010, the
option to purchase the number of Shares set forth herein shall be deemed
immediately canceled. The Participant acknowledges receipt of a copy
of the Plan]1.
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2.
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PURCHASE
PRICE.
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The
purchase price of the Shares covered by the Option shall be $[__] per Share,
subject to adjustment, as provided in the Plan, in the event of a stock split,
reverse stock split or other events affecting the holders of Shares after the
date hereof (the “Purchase Price”). Payment shall be made in
accordance with Paragraph 9 of the Plan.
1 Portions
of the bracketed language contained in this form of option agreement can be
found in the option agreements executed between the Company and certain
individuals in connection with the options granted on February 11,
2010.
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3.
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EXERCISABILITY OF
OPTION.
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Subject
to the terms and conditions set forth in this Agreement and the Plan, the Option
granted hereby shall become exercisable as follows:
[VESTING
SCHEDULE]
The foregoing rights are cumulative and
are subject to the other terms and conditions of the Agreement and the
Plan.
Notwithstanding the foregoing, in the
event of (i) a termination by the Company without Cause (as defined in the
Participant’s employment agreement) or (ii) a Change of Control (as defined
below), this Option shall become fully vested and immediately exercisable unless
this Option has otherwise expired or been terminated pursuant to its terms or
the terms of the Plan.
Change of Control
means the occurrence of any of the following events:
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(i)
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Ownership. Any
“Person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “Beneficial
Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing 50% or more of the total voting
power represented by the Company’s then outstanding voting securities
(excluding for this purpose the Company or its Affiliates or any employee
benefit plan of the Company) pursuant to a transaction or a series of
related transactions which the Board of Directors does not approve;
or
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(ii)
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Merger/Sale
of Assets. A merger or consolidation of the Company whether or
not approved by the Board of Directors, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or the parent of such corporation) at least 50% of the
total voting power represented by the voting securities of the Company or
such surviving entity or parent of such corporation outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets;
or
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(iii)
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Change
in Board Composition. A change in the composition of the Board
of Directors, as a result of which fewer than a majority of the directors
are Incumbent Directors. “Incumbent Directors” shall mean
directors who either (A) are directors of the Company as of the date
of this Agreement, or (B) are elected, or nominated for election, to the
Board of Directors with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but
shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the
election of directors to the
Company).
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4.
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TERM OF
OPTION.
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This
Option shall terminate ten years from the date of this Agreement, but shall be
subject to earlier termination as provided herein or in the Plan.
Subject
to this Section 4, if the Participant ceases to be an employee, director or
consultant of the Company or of an Affiliate (for any reason other than the
death or Disability of the Participant or termination of the Participant for
Cause, the Option may be exercised, if it has not previously terminated, within
three months after the date the Participant ceases to be an employee, director
or consultant of the Company or an Affiliate, or within the originally
prescribed term of the Option, whichever is earlier, but may not be exercised
thereafter. In such event, the Option shall be exercisable only to
the extent that the Option has become exercisable and is in effect at the date
of such cessation of service.
Notwithstanding
the foregoing, and subject to this Section 4, in the event of the Participant’s
Disability or death within three months after the termination of service, the
Participant or the Participant’s Survivors may exercise the Option within one
year after the date of the Participant’s termination of service, but in no event
after the date of expiration of the term of the Option.
Subject
to this Section 4, in the event the Participant’s service is terminated by the
Company or an Affiliate for Cause, the Participant’s right to exercise any
unexercised portion of this Option shall cease immediately as of the time the
Participant is notified his or her service is terminated for Cause, and this
Option shall thereupon terminate. Notwithstanding anything herein to
the contrary, if subsequent to the Participant’s termination, but prior to the
exercise of the Option, the Board of Directors of the Company determines that,
either prior or subsequent to the Participant’s termination, the Participant
engaged in conduct which would constitute Cause, then the Participant shall
immediately cease to have any right to exercise the Option and this Option shall
thereupon terminate.
In the
event of the Disability of the Participant, as determined in accordance with the
Plan, and subject to this Section 4, the Option shall be exercisable within one
year after the Participant’s termination of service or, if earlier, within the
term originally prescribed by the Option. In such event, the Option
shall be exercisable:
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(a)
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to
the extent that the Option has become exercisable but has not been
exercised as of the date of Disability;
and
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(b)
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in
the event rights to exercise the Option accrue periodically, to the extent
of a pro rata portion through the date of Disability of any additional
vesting rights that would have accrued on the next vesting date had the
Participant not become Disabled. The proration shall be based
upon the number of days accrued in the current vesting period prior to the
date of Disability.
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In the
event of the death of the Participant while an employee, director or consultant
of the Company or of an Affiliate, subject to this Section 4, the Option shall
be exercisable by the Participant’s Survivors within one year after the date of
death of the Participant or, if earlier, within the originally prescribed term
of the Option. In such event, the Option shall be
exercisable:
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(x)
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to
the extent that the Option has become exercisable but has not been
exercised as of the date of death;
and
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(y)
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in
the event rights to exercise the Option accrue periodically, to the extent
of a pro rata portion through the date of death of any additional vesting
rights that would have accrued on the next vesting date had the
Participant not died. The proration shall be based upon the
number of days accrued in the current vesting period prior to the
Participant’s date of death.
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[Notwithstanding
the foregoing, to the extent that the Option has become exercisable, such Option
shall not terminate for any reason, including in the event of the Participant’s
termination of service for any of the reasons set forth in this Section 4, prior
to May 12, 2016.]
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5.
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METHOD OF EXERCISING
OPTION.
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Subject
to the terms and conditions of this Agreement, the Option may be exercised by
written notice to the Company or its designee, in substantially the form of
Exhibit A
attached hereto. Such notice shall state the number of Shares with
respect to which the Option is being exercised and shall be signed by the person
exercising the Option. Payment of the purchase price for such Shares
shall be made in accordance with Paragraph 9 of the Plan. The Company
shall deliver such Shares as soon as practicable after the notice shall be
received, provided, however, that the Company may delay issuance of such Shares
until completion of any action or obtaining of any consent, which the Company
deems necessary under any applicable law (including, without limitation, state
securities or “blue sky” laws). The Shares as to which the Option
shall have been so exercised shall be registered in the Company’s share register
in the name of the person so exercising the Option (or, if the Option shall be
exercised by the Participant and if the Participant shall so request in the
notice exercising the Option, shall be registered in the Company’s share
register in the name of the Participant and another person jointly, with right
of survivorship) and shall be delivered as provided above to or upon the written
order of the person exercising the Option. In the event the Option
shall be exercised, pursuant to Section 4 hereof, by any person other than the
Participant, such notice shall be accompanied by appropriate proof of the right
of such person to exercise the Option. All Shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and nonassessable.
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6.
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PARTIAL
EXERCISE.
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Exercise
of this Option to the extent above stated may be made in part at any time and
from time to time within the above limits, except that no fractional share shall
be issued pursuant to this Option.
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7.
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NON-ASSIGNABILITY.
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The
Option shall not be transferable by the Participant otherwise than by will or by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act or the rules thereunder. Except as provided above
in this paragraph, the Option shall be exercisable, during the Participant’s
lifetime, only by the Participant (or, in the event of legal incapacity or
incompetency, by the Participant’s guardian or representative) and shall not be
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar
process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Option or of any rights granted hereunder contrary to
the provisions of this Section 7, or the levy of any attachment or similar
process upon the Option shall be null and void.
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8.
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NO RIGHTS AS
STOCKHOLDER UNTIL EXERCISE.
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The
Participant shall have no rights as a stockholder with respect to Shares subject
to this Agreement until registration of the Shares in the Company’s share
register in the name of the Participant. Except as is expressly
provided in the Plan with respect to certain changes in the capitalization of
the Company, no adjustment shall be made for dividends or similar rights for
which the record date is prior to the date of such registration.
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9.
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ADJUSTMENTS.
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The Plan
contains provisions covering the treatment of Options in a number of
contingencies such as stock splits and mergers. Provisions in the
Plan for adjustment with respect to stock subject to Options and the related
provisions with respect to successors to the business of the Company are hereby
made applicable hereunder and are incorporated herein by reference.
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10.
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TAXES.
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The
Participant acknowledges that upon exercise of the Option the Participant will
be deemed to have taxable income measured by the difference between the then
fair market value of the Shares received upon exercise and the price paid for
such Shares pursuant to this Agreement. The Participant acknowledges
that any income or other taxes due from him or her with respect to this Option
or the Shares issuable pursuant to this Option shall be the Participant’s
responsibility.
The
Participant agrees that the Company may withhold from the Participant’s
remuneration, if any, the minimum statutory amount of federal, state and local
withholding taxes attributable to such amount that is considered compensation
includable in such person’s gross income. At the Company’s
discretion, the amount required to be withheld may be withheld in cash from such
remuneration, or in kind from the Shares otherwise deliverable to the
Participant on exercise of the Option. The Participant further agrees
that, if the Company does not withhold an amount from the Participant’s
remuneration sufficient to satisfy the Company’s income tax withholding
obligation, the Participant will reimburse the Company on demand, in cash, for
the amount under-withheld.
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11.
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PURCHASE FOR
INVESTMENT.
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Unless
the offering and sale of the Shares to be issued upon the particular exercise of
the Option shall have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended (the “1933 Act”), the Company shall
be under no obligation to issue the Shares covered by such exercise unless and
until the following conditions have been fulfilled:
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(a)
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The
person(s) who exercise the Option shall warrant to the Company, at the
time of such exercise, that such person(s) are acquiring such Shares for
their own respective accounts, for investment, and not with a view to, or
for sale in connection with, the distribution of any such Shares, in which
event the person(s) acquiring such Shares shall be bound by the provisions
of the following legend which shall be endorsed upon the certificate(s)
evidencing the Shares issued pursuant to such
exercise:
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“The
shares represented by this certificate have been taken for investment and they
may not be sold or otherwise transferred by any person, including a pledgee,
unless (1) either (a) a Registration Statement with respect to such shares shall
be effective under the Securities Act of 1933, as amended, or (b) the Company
shall have received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall have
been compliance with all applicable state securities laws;” and
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(b)
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If
the Company so requires, the Company shall have received an opinion of its
counsel that the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration
thereunder. Without limiting the generality of the foregoing,
the Company may delay issuance of the Shares until completion of any
action or obtaining of any consent, which the Company deems necessary
under any applicable law (including without limitation state securities or
“blue sky” laws).
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12.
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RESTRICTIONS ON
TRANSFER OF SHARES.
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12.1 The
Participant agrees that in the event the Company proposes to offer for sale to
the public any of its equity securities and such Participant is requested by the
Company and any underwriter engaged by the Company in connection with such
offering to sign an agreement restricting the sale or other transfer of Shares,
then it will promptly sign such agreement and will not transfer, whether in
privately negotiated transactions or to the public in open market transactions
or otherwise, any Shares or other securities of the Company held by him or her
during such period as is determined by the Company and the underwriters, not to
exceed 180 days following the closing of the offering, plus such additional
period of time as may be required to comply with Marketplace Rule 2711 of the
National Association of Securities Dealers, Inc. or similar rules thereto (such
period, the “Lock-Up Period”). Such agreement shall be in writing and
in form and substance reasonably satisfactory to the Company and such
underwriter and pursuant to customary and prevailing terms and
conditions. Notwithstanding whether the Participant has signed such
an agreement, the Company may impose stop-transfer instructions with respect to
the Shares or other securities of the Company subject to the foregoing
restrictions until the end of the Lock-Up Period.
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12.2 The
Participant acknowledges and agrees that neither the Company, its shareholders
nor its directors and officers, has any duty or obligation to disclose to the
Participant any material information regarding the business of the Company or
affecting the value of the Shares before, at the time of, or following a
termination of the employment of the Participant by the Company, including,
without limitation, any information concerning plans for the Company to make a
public offering of its securities or to be acquired by or merged with or into
another firm or entity.
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13.
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NO OBLIGATION TO
MAINTAIN RELATIONSHIP.
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The
Company is not by the Plan or this Option obligated to continue the Participant
as an employee, director or consultant of the Company or an
Affiliate. The Participant acknowledges: (i) that the Plan
is discretionary in nature and may be suspended or terminated by the Company at
any time; (ii) that the grant of the Option is a one-time benefit which does not
create any contractual or other right to receive future grants of options, or
benefits in lieu of options; (iii) that all determinations with respect to any
such future grants, including, but not limited to, the times when options shall
be granted, the number of shares subject to each option, the option price, and
the time or times when each option shall be exercisable, will be at the sole
discretion of the Company; (iv) that the Participant’s participation in the Plan
is voluntary; (v) that the value of the Option is an extraordinary item of
compensation which is outside the scope of the Participant’s employment
contract, if any; and (vi) that the Option is not part of normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments.
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14.
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NOTICES.
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Any
notices required or permitted by the terms of this Agreement or the Plan shall
be given by recognized courier service, facsimile, registered or certified mail,
return receipt requested, addressed as follows:
If to the
Company:
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▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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If to the
Participant:
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[__________]
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[__________]
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[__________]
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or to
such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been
given upon the earlier of receipt, one business day following delivery to a
recognized courier service or three business days following mailing by
registered or certified mail.
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15.
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GOVERNING
LAW.
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This
Agreement shall be construed and enforced in accordance with the law of the
State of Delaware, without giving effect to the conflict of law principles
thereof.
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16.
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BENEFIT OF
AGREEMENT.
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Subject
to the provisions of the Plan and the other provisions hereof, this Agreement
shall be for the benefit of and shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.
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17.
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ENTIRE
AGREEMENT.
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This
Agreement, together with the Plan, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation,
warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict, the express terms and
provisions of this Agreement, provided, however, in any event, this Agreement
shall be subject to and governed by the Plan.
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18.
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MODIFICATIONS AND
AMENDMENTS.
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The terms
and provisions of this Agreement may be modified or amended as provided in the
Plan.
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19.
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WAIVERS AND
CONSENTS.
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Except as
provided in the Plan, the terms and provisions of this Agreement may be waived,
or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or
provisions. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or provisions of
this Agreement, whether or not similar. Each such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given, and shall not constitute a continuing waiver or
consent.
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20.
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DATA
PRIVACY.
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By
entering into this Agreement, the Participant: (i) authorizes the
Company and each Affiliate, and any agent of the Company or any Affiliate
administering the Plan or providing Plan recordkeeping services, to disclose to
the Company or any of its Affiliates such information and data as the Company or
any such Affiliate shall request in order to facilitate the grant of options and
the administration of the Plan; (ii) waives any data privacy rights he or she
may have with respect to such information; and (iii) authorizes the Company and
each Affiliate to store and transmit such information in electronic
form.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Participant has hereunto set his or her hand,
all as of the day and year first above written.
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By:
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Name
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Title
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Participant
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9
Exhibit
A
NOTICE OF
EXERCISE OF NON-QUALIFIED STOCK OPTION
IMPORTANT
NOTICE: This form of Notice of Exercise may only be used at such time
as the Company has filed a Registration Statement with the Securities and
Exchange Commission under which the issuance of the Shares for which this
exercise is being made is registered and such Registration Statement remains
effective.
Ladies
and Gentlemen:
I hereby
exercise my Non-Qualified Stock Option to purchase _________ shares (the
“Shares”) of the common stock, $0.001 par value, of Zoo Entertainment, Inc. (the “Company”), at the
exercise price of $[_____] per share, pursuant to and subject to the terms of
that certain Non-Qualified Stock Option Agreement between the undersigned and
the Company dated [_____].
I
understand the nature of the investment I am making and the financial risks
thereof. I am aware that it is my responsibility to have consulted
with competent tax and legal advisors about the relevant national, state and
local income tax and securities laws affecting the exercise of the Option and
the purchase and subsequent sale of the Shares.
I am
paying the option exercise price for the Shares as follows:
Please
issue the Shares (check one):
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to me and
____________________________, as joint tenants with right of
survivorship,
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at the following address:
A-1
My mailing address for shareholder
communications, if different from the address listed above, is:
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Very
truly yours,
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Participant
(signature)
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Print
Name
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Date
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Social
Security Number
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A-2