The securities subject to issuance upon exercise of this Non-Qualified
Stock Option Agreement have not been registered under the Securities
Act of 1933 (the "Act") or state securities laws and no transfer of
these securities may be made except (a) pursuant to an effective
registration statement under the Act, or (b) pursuant to an exemption
therefrom with respect to which the issuer may, upon request, require
a satisfactory opinion of counsel for the holder that such transfer is
exempt from the requirements of the Act. Such securities are also
subject to further restrictions referred to herein.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, effective as of _____________, 1999, is made by and
between Entertainment Boulevard, Inc., a Nevada corporation, hereinafter
referred to as the "COMPANY" and _____________________, an employee, officer,
director or consultant of the Company or a Parent Corporation or Subsidiary of
the Company, hereinafter referred to as "OPTIONEE":
RECITALS
A. The Company wishes to afford the Optionee the opportunity to
purchase shares of its common stock.
B. The Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement).
C. The Board has determined that it would be to the advantage and best
interest of the Company and its shareholders to grant the Non-Qualified
Option provided for herein to the Optionee as an inducement to enter into or
remain in the service of the Company, its Parent Corporations or its
Subsidiaries and as an incentive for increased efforts during such service,
and has advised the Company thereof and instructed the undersigned officers
to issue said Option.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and
the singular the plural, where the context so indicates.
"BOARD" shall mean the Board of Directors of the Company.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMITTEE" shall mean the Board or a duly constituted Stock Option
Committee of the Board, appointed as provided in Section 6.1 of the Plan.
"COMMON STOCK" shall mean the Common Stock of the Company.
"COMPANY" shall mean Entertainment Boulevard, Inc.
"DIRECTOR" shall mean a member of the Board.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"OFFICER" shall mean an officer of the Company, as defined in Rule
16a-l(f) under the Exchange Act, as such Rule may be amended in the future.
"OPTION" shall mean the non-qualified option to purchase Common Stock of
the Company granted under this Agreement.
"PARENT CORPORATION" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
"PLAN" shall mean the 1999 Stock Option Plan of Entertainment Boulevard,
Inc.
"RETIREMENT" shall mean the written resignation of Optionee as an
employee of the Company which is delivered at least thirty (30) days prior to
its effective date and which occurs at any time that the sum of Optionee's
age and years of service as an employee of the Company exceed seventy-five
(75).
"RULE 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended in the future.
"SECRETARY" shall mean the Secretary of the Company.
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"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SUBSIDIARY" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
"TERMINATION" shall mean the time when the employee-employer or other
applicable relationship between the Optionee and the Company, a Parent
Corporation or a Subsidiary is terminated for any reason, with or without
cause and with or without notice, including, but not by way of limitation, a
termination by resignation, discharge, death or Retirement, but excluding any
termination where there is a simultaneous reemployment or rehiring by the
Company, a Parent Corporation or a Subsidiary. The Committee, in its absolute
discretion, shall determine the effect of all other matters and questions
relating to Termination, including, but not by way of limitation, the
question of whether a Termination resulted from a discharge for cause, and
all questions of whether particular leaves of absence constitute Terminations.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
In consideration of the Optionee's agreement to remain as an
employee, officer, director or consultant of the Company, its Parent
Corporation or its Subsidiaries and for other good and valuable
consideration, on the date hereof, the Company irrevocably grants to the
Optionee the option to purchase any part or all of an aggregate of _______
shares of its Common Stock upon the terms and conditions set forth in this
Agreement.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of stock covered by the Option
shall be $______ per share without commission or other charge.
SECTION 2.3 - NO RIGHT TO CONTINUED EMPLOYMENT OR HIRE.
Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ or hires of the Company, any
Parent Corporation or any Subsidiary or shall interfere with or restrict in
any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to discharge the Optionee
at any time for any reason whatsoever, with or without cause and with or
without notice.
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SECTION 2.4 - ADJUSTMENTS IN OPTION
In the event that the outstanding shares of the stock subject to
the Option are changed into or exchanged for a different number or kind of
shares of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Committee shall, subject to Section
4.7 of the Plan, make an appropriate and equitable adjustment in the number
and kind of shares as to which the Option, or portions thereof then
unexercised, shall be exercisable, to the end that after such event the
Optionee's proportionate interest shall, be maintained as before the
occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary
corresponding adjustment in the Option price per share. Any such adjustment
made by the Committee shall be final and binding upon all Optionees, the
Company and all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) The Option shall become exercisable in ____ (__) cumulative
installments as follows:
(i) The first installment shall consist of ___% of the shares
covered by the Option and shall become exercisable on the first anniversary
of the date the Option is granted.
(ii) The second installment shall consist of ___% of the shares
covered by the Option and shall become exercisable on the second
anniversary of the date the Option is granted.
(b) Except as provided in Section 3.4, no portion of the Option which
is unexercisable at Termination shall thereafter become exercisable.
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SECTION 3.2 - DURATION OF EXERCISABILITY
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall
remain exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten years from the date the Option was granted;
or
(b) The time of the Optionee's Termination unless such Termination
results from his/her death, his/her Retirement, his/her disability or his/her
being discharged not for cause; or
(c) The expiration of three months from the date of the Optionee's
Termination as a result of Retirement or discharge not for cause; or
(d) The expiration of one year from the date of the Optionee's
Termination Employment as a result of disability (within the meaning of
Section 22(e)(3) of the Code); or
(e) The expiration of one year from the date of the Optionee's
death; or
(f) The effective date of either the merger or consolidation of
the Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
80% or more of the Company's then outstanding voting stock, or the
liquidation or dissolution of the Company, unless the Committee waives this
provision in connection with such transaction. At least ten days prior to
the effective date of such merger, consolidation, acquisition, liquidation or
dissolution, the Committee shall give the Optionee notice of such event if
the Option has then neither been fully exercised nor become unexercisable
under this Section 3.3.
SECTION 3.4 - ACCELERATION OF EXERCISABILITY
In the event of the death or disability of the Optionee, or the
merger or consolidation of the Company with or into another unrelated
corporation, or the acquisition by another unrelated corporation or person of
all or substantially all of the Company's assets or 80% or more of the
Company's then outstanding voting stock, or the liquidation or dissolution of
the Company, the Committee shall, upon such terms and conditions as it deems
appropriate, provide by resolution, adopted prior to such event and
incorporated in the notice referred to in Section 3.3(f), that at some time
prior to the effective date of such event this Option shall be exercisable as
to all the shares covered hereby, notwithstanding that this Option may not
yet have become fully exercisable under Section 3.1(a); PROVIDED, HOWEVER,
that this acceleration of exercisability shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to
said effective date; or
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(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation or a parent or subsidiary of such corporation.
The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he/she may exercise the
Option or any portion thereof. After the death of the Optionee, any
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by his/her personal
representative or by any person empowered to do so under the Optionee's will
or under the then applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
At any time and from time to time prior to the time when the
exercisable Option or any exercisable portion thereof becomes unexercisable
under Section 3.3, such Option or portion thereof may be exercised in whole
or in part; PROVIDED, HOWEVER, that the Company shall not be required to
issue fractional shares and the Committee may, by the terms of the Option,
require any partial exercise to be with respect to a specified minimum number
of shares.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his/her office of all of the following
prior to the time when the Option or such portion becomes unexercisable under
Section 3.3:
(a) Notice in writing signed by the Optionee or the other person
then entitled to exercise the Option or portion, stating that the Option or
portion is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check) for the shares
with respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, shares of the
Company's Common Stock owned by the Optionee duly endorsed for transfer to
the Company;
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(iii) With the consent of the Committee, subject to the
timing requirements of Section 4.4, payment, in whole or in part, through
the surrender of shares of Common Stock then issuable upon exercise of the
Option having a fair market value on the date of Option exercise equal to
the aggregate exercise price of the Option or exercised portion thereof;
or
(iv) With the consent of the Committee, any combination of
the consideration provided in the foregoing subsections (i), (ii) and
(iii);
(c) The payment to the Company (or other employer corporation) of
all amounts which it is required to withhold under federal, state or local
law in connection with the exercise of the Option;
(d) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other federal or
state securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars;
(e) The delivery by or on behalf of Optionee of such other
ancillary agreements and undertakings as may have been provided for or
referred to in the Plan (including, without limitation, as contemplated by
Section 2.3(b) of the Plan); and
(f) In the event the Option or portion shall be exercised pursuant
to Section 4.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares
or issued shares which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of the 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 rulings or regulations of
the Securities and Exchange Commission or of any other governmental
regulatory body, which the Committee shall, in its absolute discretion, deem
necessary or advisable;
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(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable;
(d) The payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option;
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience; and
(f) The written acknowledgment of Optionee of the continued
applicability of the restrictions contained in this Agreement (including
Article IV) and the Plan, if applicable.
SECTION 4.5 - RIGHTS AS SHAREHOLDER
The holder of the Option shall not be, nor have any of the rights
or privileges of, a shareholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company
to such holder.
SECTION 4.6 - RESTRICTIONS ON TRANSFER OF SHARES
There can be no valid transfer of any shares of stock purchased on
exercise of the Option, or any direct or indirect interest in such shares, by
any holder of such shares or interests unless such transfer is made in
compliance with the terms and conditions of the Shareholders Agreement. The
restrictions on transfer contained in this Section 4.8 are in addition to
those contained in Section 5.2.
SECTION 4.7 - LEGENDS
The Company is expressly authorized to place one or more legends on
any certificates representing shares of Common Stock issued upon exercise
hereof in order to provide adequate legal notice of any restrictions imposed
by applicable law or this Agreement or any related applicable agreements to
which Optionee shall be subject from time to time.
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Optionee,
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the Company and all other interested persons. No member of the Committee
shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or the Option. The Board shall
have no right to exercise any of the rights or duties of the Committee under
the Plan and this Agreement.
SECTION 5.2 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the
Optionee or his/her successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other
legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided,
however, that this Section 5.2 shall not prevent transfers by will or by the
applicable laws of descent and distribution.
SECTION 5.3 - SHARES TO BE RESERVED
The Company shall at all times during the term of the Option
reserve and keep available such number of shares of stock as will be
sufficient to satisfy the requirements of this Agreement.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him/her at the
address given beneath his/her signature hereto. By a notice given pursuant
to this Section 5.4, either party may hereafter designate a different address
for notices to be given to him/her. Any notice which is required to be given
to the Optionee shall, if the Optionee is then deceased, be given to the
Optionee's personal representative if such representative has previously
informed the Company of his/her status and address by written notice under
this Section 5.4. Any notice shall be deemed duly given when (i) enclosed in
a properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained
by the United States Postal Service (ii) delivered in person, or (iii)
delivered by telecopy and promptly confirmed by delivery in person or post as
aforesaid in each case, with postage prepaid.
SECTION 5.5 - TITLES
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced
under the laws of the State of Nevada.
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SECTION 5.7 - CONFORMITY TO SECURITIES LAWS.
The Optionee acknowledges that the Plan is intended to conform to
the extent necessary with all provisions of the Securities Act and the
Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder, including without limitation
Rule 16b-3. Notwithstanding anything herein to the contrary, the Plan shall
be administered, and the Option is granted and may be exercised, only in such
a manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and
regulations.
IN WITNESS WHEREOF, this Agreement has been executed and delivered
by the parties hereto.
ENTERTAINMENT BOULEVARD, INC.
By:
-----------------------------------
Authorized Signatory
By:
---------------------------
Optionee
------------------------------
(Name)
------------------------------
------------------------------
(Address)
Optionee's Taxpayer
Identification Number:
------------------------------
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