INCENTIVE STOCK OPTION AGREEMENT
PURSUANT TO THE
1999 STOCK OPTION AND INCENTIVE PLAN
OF
XXXXXXXX.XXX
(FORMALLY VIRTUAL BRAND, INC.)
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement"), is made as of ________
(the "Effective Date") by and between XXXXXXXX.XXX (formally Virtual Brand,
Inc.), a Nevada corporation, (the "COMPANY") and ________________________ (the
"EMPLOYEE"), pursuant to the Company's 1999 Stock Option and Incentive Plan (the
"Plan").
WHEREAS, the Board of Directors of the COMPANY and the shareholders
have adopted the Plan as of January 25, 1999, to which this Agreement and the
option granted hereunder ("Option") are subject; and
WHEREAS, the Board of Directors of the COMPANY has determined that it
is to the advantage and in the best interest of the COMPANY and its shareholders
to grant the Option provided for herein to EMPLOYEE as an inducement to remain
in the employ of the COMPANY, and as an incentive for increased effort during
such service.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. GRANT OF OPTION. The Company grants to EMPLOYEE the right and Option
to purchase from the COMPANY, on the terms and conditions hereinafter set forth,
all or any part of an aggregate of _________shares of the authorized $.001 par
value common stock of the COMPANY, at the purchase price of per share (being not
less than the fair market value per share of said stock on the date hereof) as
EMPLOYEE may from time to time elect, exercisable on or after the Effective Date
hereof pursuant to the vesting schedule attached hereto and marked Exhibit "A",
for a period of _______years until_________ (the latter date hereinafter
referred to as the "Terminal Date"), with certain provisions regarding the
nature and tax treatment of the Option upon exercise being determined pursuant
to the terms of paragraph 5. TERMINATION OF OPTIONS. No partial exercise of such
Option may be for less than 100 full shares, unless the number purchased is the
total number at the time purchasable under the option. In no event shall the
COMPANY be required to transfer fractional shares to EMPLOYEE. This Agreement
and the Option granted hereunder are subject to the Plan, a copy of which is
attached hereto and incorporated herein by reference as Exhibit "B."
2. METHOD OF EXERCISE. The Option granted hereunder shall be
exercisable, from Effective Date, as hereinabove provided, by written notice
which shall;
(a) state the election to exercise the Option, the number of
shares in respect of which it is being exercised, the person in whose name the
shares are to be issued (if the shares are issued to individuals), the names,
addresses and Social Security Numbers of such persons;
(b) contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock as are
required by law or as may be satisfactory to the COMPANY's counsel;
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(c) be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons other
than the EMPLOYEE, be accompanied by proof, satisfactory to counsel for the
COMPANY, of the right of such person or persons to exercise the Option; and
(d) be accompanied by a payment for the purchase price of
those shares with respect to which the Option is being exercised in the form of
cash or check.
3. ISSUING OF STOCK CERTIFICATES. The certificate or certificates for
shares of Common Stock as to which the Option shall be exercised shall be
registered in the name of the person or persons exercising the Option. The
COMPANY shall not be required to transfer or deliver any certificate or
certificates for the shares purchased upon exercise of the Option granted
hereunder until (a) compliance with the terms of this Agreement, (b) compliance
with all then applicable requirements of law; and (c) admission of such shares
for trading privileges on any stock exchange on which the stock may then be
listed.
4. STOCK SUBJECT TO THE OPTION. The COMPANY shall set aside the number
of shares of Common Stock of the COMPANY subject to be granted upon exercise of
this Option which it now holds as authorized and unissued shares. If the Option
should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased shares which were subject thereto shall be
free from any restrictions occasioned by this Option Agreement. If the COMPANY
has been listed on a stock exchange, the COMPANY will not be required to issue
or deliver any certificate or certificates for shares to be issued hereunder
until such shares have been listed (or authorized for listing upon official
notice of issuance) upon each stock exchange on which outstanding shares of the
same class may then be listed and until the COMPANY has taken such steps as may,
in the opinion of counsel for the COMPANY, be required by law and applicable
regulations, including the rules and regulations of the Securities and Exchange
Commission, and state blue sky laws and regulations, in connection with the
issuance or sale of such shares, and the listing of such shares on each such
exchange. The COMPANY will use its best efforts to comply with any such
requirements forthwith upon the exercise of the Option.
5. TERMINATION OF OPTION. The Option and all rights granted hereunder
to the extent such rights shall not have been exercised, shall terminate and
become null and void on the Terminal Date. If EMPLOYEE ceases to be in the
continuous employ of the COMPANY (whether by resignation, retirement, dismissal,
or otherwise), EMPLOYEE must exercise the Option within 90 days of termination
of employment or the Option will lose the benefits of an Incentive Stock Option
and if vested will continue to be exercisable until the Terminal Date, but shall
be treated for tax purposes as a non-statutory stock option except that: (a) in
the event of termination of such employment for any reason other than the
permanent disability of EMPLOYEE, as defined in Section 22(e)(3) of the Internal
Revenue Code, as amended and as presently in effect (the "Code"), EMPLOYEE may
at any time within a period of one year thereafter exercise the Option granted
hereunder to the extent such Option was exercisable by EMPLOYEE on the date of
the termination of such employment; and (b) in the event of the permanent
disability of EMPLOYEE while in the employ of the COMPANY, the Option granted
hereunder, to the extent that EMPLOYEE was entitled to exercise such Option on
the date of EMPLOYEE's disability, may be exercised within one year after such
termination as a result of disability by EMPLOYEE or the person or persons to
whom EMPLOYEE's rights under the Option granted hereby shall pass by will or by
the applicable laws of descent and distribution. Notwithstanding anything herein
to the contrary, however, the Option and all rights herein granted shall in all
events terminate and become null and void 5 years from the date of this
Agreement.
6. LIMITATION UPON TRANSFER. During the lifetime of EMPLOYEE, the
Option and all rights granted hereunder shall be exercisable only by EMPLOYEE,
and except as in paragraph 4 otherwise provided, the Option and all rights
granted hereunder shall not be transferred, assigned, pledged, or hypothecated
in any way (whether by operation of law or otherwise), and shall not be subject
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to execution, attachment, or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate, or otherwise dispose of such Option or of such
rights contrary to the provisions hereof, or upon the levy of any attachment or
similar process upon such Option or such rights, such Option and such rights
shall immediately become null and void.
7. CONDITION OF EMPLOYMENT. In order to be entitled to exercise the
Option granted hereunder as to the first increment of shares as shown in Exhibit
"A," EMPLOYEE must remain in the continuous employ of the COMPANY for the period
of at least six months from the date hereof.
8. STOCK AS INVESTMENT. By accepting this Option, the EMPLOYEE
acknowledges for EMPLOYEE or any heirs and legatees, that any and all shares
purchased hereunder shall be acquired for investment and not for distribution,
and upon the transfer of any or all of the shares subject to the Option granted
hereunder, the EMPLOYEE, or heirs or legatees receiving such shares, shall
deliver to the COMPANY a representation in writing that such shares are being
acquired in good faith for investment and not for distribution. The EMPLOYEE
shall not dispose (whether by sale, exchange, gift, or any other transfer) of
any shares of stock acquired pursuant to the exercise of the Option granted
hereunder, within two years after the grant of this Option or one year after the
transfer of such shares to him upon his exercise of such Option. EMPLOYEE
further recognizes that any disposition (whether a sale, exchange, gift, or any
other transfer) of any shares of stock prior to the aforementioned periods will
not only be a breach of this Agreement, but will also disqualify the Option as a
incentive stock Option under Section 422A of the Code.
9. RECLASSIFICATION, CONSOLIDATION, OR MERGER. In the event of any
change in the common stock of the COMPANY subject to the Option granted
hereunder, through merger, consolidation, reorganization, recapitalization,
stock split, stock dividend, or other change in the corporate structure,
appropriate adjustment shall be made by the COMPANY in the number of shares
subject to such Option and the price per share; provided, however, that in
accordance with the provisions of Section 425(a) of the Code, a new Option may
be substituted for the Option granted hereunder or such Option may be assumed by
an employer corporation, or a parent or subsidiary of such corporation, in
connection with any transaction to which such Section is applicable. Upon the
dissolution or liquidation of the COMPANY other than in connection with a
transaction to which such Section is applicable, the Option granted hereunder
shall terminate and become null and void, but EMPLOYEE shall have the right
immediately prior to such dissolution or liquidation to exercise the Option
granted hereunder to the full extent not before exercised.
10. RIGHT AS SHAREHOLDER. Neither EMPLOYEE nor his executors,
administrators, heirs or legatees, shall be or have any rights or privileges of
a stock holder of the COMPANY in respect of the shares transferable upon
exercise of the Option granted hereunder, unless and until certificates
representing such shares shall have been endorsed, transferred, and delivered
and the transferee has caused his name to be entered as the shareholder of
record on the books of the COMPANY.
11. NOTICES. Any notice to be given under the terms of this Agreement
shall be addressed to the COMPANY in care of its Secretary at the main offices
for the transaction of its business, and any notice to be given to EMPLOYEE
shall be addressed to EMPLOYEE at the address set forth above, or at such other
place as either party may hereafter designate in writing to the other. Any such
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as herein required, certified and deposited (postage and
certification prepaid) in a post office regularly maintained by the United
States Government.
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12. BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon each successor of the COMPANY. All obligations imposed upon
the EMPLOYEE and all rights granted to the COMPANY under this Agreement shall be
binding upon the EMPLOYEE's heirs, legal representatives, and successors. This
Agreement shall be the sole and exclusive source of any and all rights which the
EMPLOYEE, EMPLOYEE's heirs, legal representatives, or successors may have in
respect to the Plan or any options or Common Stock granted or issued thereunder,
whether to EMPLOYEE, or to any other person.
13. INTERNAL REVENUE CODE. All Options granted hereunder are granted
pursuant to the Internal Revenue Code, as amended, as it is in force and effect
at the date of grant.
14. RESOLUTION OF DISPUTES. Any dispute or disagreement which should
arise under, or as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement will be determined by the Board of
Directors of the COMPANY. Any determination made hereunder shall be final,
binding, and conclusive for all purposes. Any conflict between any provision in
this Agreement and any provision of the Plan shall be resolved in favor of the
provisions of this Agreement.
IN WITNESS WHEREOF, the COMPANY has caused these presents to be
executed on its behalf by its President, to be sealed by its corporate seal, and
attested by its Secretary, and EMPLOYEE has hereunto set her hand as of the date
and year first above written, which is the time of the granting of the Option
hereunder.
"COMPANY"
XXXXXXXX.XXX
"EMPLOYEE"
a Nevada corporation
By: __________________________ ____________________________
President
ATTEST:
By: __________________________
Secretary
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