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EXHIBIT 4.2
INCENTIVE STOCK OPTION AGREEMENT ISO-__
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made
and entered into on ___________, 19_, by and between WANDERLUST INTERACTIVE,
INC., a Delaware corporation ("Company"), and __________________ ("Optionee").
1. Grant of Option. The Company hereby irrevocably grants to the
Optionee, on the terms and subject to the conditions set forth in this
Agreement and subject to the terms and conditions of the Company's 1995 Stock
Option Plan (the "Plan"), the right and option (the "Option") to purchase all
or any part of an aggregate of ________ shares (the "Option Shares") of the
Company's common stock, such number being subject to adjustment as provided in
Section 9 hereof. It is understood by the parties hereto that the Option is
intended to qualify as an "incentive stock option" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). It
is further understood by the parties hereto that the Option has been granted as
a matter of separate inducement and agreement in connection with the employment
of the Optionee and is not in lieu of any salary or other compensation for the
Optionee's services.
2. Option Exercise Price. The exercise price for the Option
Shares shall be $________ per share. The exercise price shall be paid in full
as provided in Section 10 hereof.
3. Term of Option. The term of the Option shall be for a period
of ____ (_) years from the date hereof, subject to earlier termination as
provided in Sections 7 and 8 hereof.
4. Exercisability of Option.
(a) Subject to the provisions of Section 4(b)
hereof, the Option shall be exercisable in accordance with the following
schedule:
Percentage (Number)
of Option Shares
Date Purchasable
---- -------------------
On or after ______, 19__ ___% (___)
On or after ______, 19__ ___% (___)
On or after ______, 19__ ___% (___)
The Optionee's right to exercise the Option shall be cumulative as to the Option
Shares covered thereby.
(b) The Company's grant of the Option is based upon the assumption
that the Optionee's exercise of the Option and the Company's issuance of the
Option Shares as a result of such exercise
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will be exempt from registration under the Securities Act of 1933, as amended
(the "Securities Act"). In the event that the Company's assumption is erroneous,
the Option may not be exercised unless and until a registration statement under
the Securities Act relating to the Option Shares shall be in effect, or unless
and until the issuance of the Option Shares upon the exercise of the Option
shall be exempt from registration under the Securities Act, in either of which
events the term of the Option shall be deemed to have been automatically
extended through and including a period of ninety (90) days from and after the
date that such registration statement under the Securities Act relating to the
Option Shares first becomes effective or the date that the issuance of the
Option Shares upon the exercise of the Option first becomes exempt from
registration under the Securities Act, as the case may be. In this regard, the
Company shall use its best efforts to either register the Option Shares in
accordance with the registration requirements of the Securities Act or to comply
with any exemption therefrom with regard to the issuance of the Option Shares.
The Company shall promptly notify Optionee of any automatic extension in the
term of the Option in the event the foregoing provisions become applicable. In
all events, the Optionee shall give a written representation satisfactory to
legal counsel to the Company upon his exercise of the Option that he is
acquiring the Option Shares for investment purposes and not with a view to, or
for resale in connection with, the distribution of any Option Shares or other
securities of the Company.
5. Limitation on Optionee's Rights.
(a) The Optionee shall not have any of the
rights of a shareholder of the Company with respect to the Option Shares except
to the extent that one or more certificates for the Option Shares shall be
delivered to him upon the due exercise of the Option.
(b) Nothing contained in this Agreement shall
confer upon the Optionee any right with respect to the continuation of his
employment by the Company or a parent or a subsidiary of the Company or
interfere in any way with the right of the Company or a parent or a subsidiary
of the Company (subject to the terms of any separate employment agreement to
the contrary) to terminate his employment at any time or to increase or
decrease the compensation payable to the Optionee.
6. Nontransferability of Option. The Option shall not be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution, and the Option may be exercised during the lifetime of the
Optionee only by him. More particularly, but without limiting the generality
of the foregoing, the Option may not be assigned, transferred (except upon the
death of the Optionee), pledged or hypothecated in any way, shall not be
assignable by operation of law and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect.
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7. Early Termination of Option. The Option and all rights under
this Agreement, to the extent such rights shall not have been previously
exercised, shall terminate and become immediately null and void on the date
that the Optionee ceases to be an employee (whether by resignation, retirement,
dismissal, total disability, death or other-wise) of the Company or a parent or
a subsidiary of the Company; provided, however, the Option may thereafter by
exercised as follows:
(a) If the termination of employment was due to
the Optionee's forced retirement after becoming totally disabled, the Optionee
may, at any time or from time to time during a period of one hundred eighty
(180) days after such termination of his employment, exercise the Option
(except that in no event may the Option be exercised to any extent after the
expiration of the term specified in Section 3 hereof) to the extent such Option
was exercisable by him on the date of such termination of his employment.
(b) If the termination of employment was due to
the death of the Optionee while in the employ of the Company or a parent or a
subsidiary of the Company, then the Option, to the extent that the Optionee was
entitled to exercise such Option on the date of his death, may be exercised
within one (l) year after such death by the Optionee's executors,
administrators, heirs or legatees; provided, however, that in no event may the
Option be exercised to any extent after the expiration of the term specified in
Section 3 hereof.
8. Nonsurvival of Company. Where dissolution or liquidation of
the Company or any merger or combination in which the Company is not the
surviving corporation is involved, the Option shall terminate as of the
effective date of such liquidation, dissolution, merger or combination to the
extent that the Option is not assumed by, or replaced by equivalent options
granted by, the surviving corporation, if any, in such liquidation, dissolution
merger or combination, but, in such event, the Optionee shall have the right,
for a period of thirty (30) days immediately prior to the effective date of
such liquidation, dissolution or merger or combination, to exercise his Option,
in whole or in part, to the extent that such Option shall not have been
previously exercised or so assumed or so replaced, without regard to any
installment exercise provisions.
9. Changes in Capital Structure. In the event that the
outstanding shares of common stock of the Company are changed into or exchanged
for a different number or kind of shares or other securities of the Company or
of another corporation by reason of merger, consolidation, other
reorganization, recapitalization, reclassification, combination of shares,
stock dividend, stock split or reverse stock split, the rights of the Optionee
shall be appropriately adjusted both as to the number of Option Shares and the
exercise price for the Option Shares.
10. Method of Exercising Option.
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(a) Subject to the terms and conditions of the
Plan and this Agreement, the Option may be exercised by written notice
("Exercise Notice") from the Optionee or other person entitled to exercise the
Option delivered to the Company stating the election to exercise the Option and
the number of the Option Shares in respect of which it is being exercised, and
shall be signed by the person or persons so exercising the Option. The
Exercise Notice shall be accompanied by the full exercise price for the Option
Shares in respect of which the Option is being exercised. In the event the
Option shall be exercised pursuant to Section 7(b) hereof by any person or
persons other than the Optionee, the Exercise Notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the
Option.
(b) Payment of the exercise price shall be made
by certified or bank cashier's check or the equivalent thereof payable to the
order of the Company.
(c) The certificate or certificates for the
Option Shares in respect of which the option shall have been exercised shall be
registered in the name of the person or persons exercising the Option, or, if
the Option is exercised by the Optionee and if the Optionee shall so request in
the Exercise Notice, shall be registered in the name of the Optionee and
another person jointly, with right of survivorship, and shall be delivered as
provided above to or upon the written order of the person or persons exercising
the Option.
All of the Option Shares purchased upon the exercise of the Option as provided
herein shall, when issued, be fully paid and nonassessable.
11. Restrictions on Transfer of Option Shares. Optionee, by
acceptance of this Option, represents and warrants to the Company as follows:
(a) Optionee has been advised and understands
that: (i) the Option has been issued in reliance upon exemptions from
registration under the Securities Act and applicable state statutes; (ii) the
exercise of the Option and resale of the Option Shares have not been registered
under the Securities Act or applicable state statutes and the Option Shares
must be held and may not be sold, transferred or otherwise disposed of for
value unless they are subsequently registered under the Securities Act or an
exemption from such registration is available; (iii) the Company is under no
obligation to register the resale of the Option Shares under the Securities Act
or the applicable state statutes; (iv) in the absence of registration under the
Securities Act, the resale of the Option Shares may be practicably impossible;
and (v) the Company's registrar and transfer agent will maintain stop-transfer
instructions against registration or transfer of the Option Shares and any
certificate issued upon exercise of the Option representing the Option Shares
will bear on its face a legend in substantially the following form restricting
the resale of the Option Shares:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND ARE "RESTRICTED SECURITIES"
WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT
COMPLYING WITH RULE 144 IN THE ABSENCE OF EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT."
(b) Prior to one year from the date the Option
has been exercised and the Option Shares purchased as a result of such exercise
have been fully paid for, the Company may refuse to allow the transfer of the
Option Shares unless the holder thereof provides an opinion of legal counsel
reasonably satisfactory to the Company or a "no action" letter or interpretive
response from the staff of the Securities and Exchange Commission to the
effect that the transfer is proper; further, unless such opinion letter or
response states that the Option Shares are free of any restrictions under the
Securities Act, the Company may refuse to allow the transfer of the Option
Shares to any transferee who does not furnish in writing to the Company the
same representations and agree to the same conditions with respect to such
Option Shares as are set forth herein. Notwithstanding any of the foregoing,
the Company may refuse to allow the transfer of the Option Shares if any
circumstances are present reasonably indicating that the transferee's
representations are not accurate.
(c) After one year but prior to two years from
the date the Option has been exercised and the Option Shares purchased as a
result of such exercise have been fully paid for, the Company may refuse to
allow the transfer of the Option Shares unless the holder either (i) meets the
requirements of subparagraph (b) above; or (ii) resells such Option Shares in
accordance with Rule 144 promulgated under the Securities Act and furnishes to
the Company written assurances of compliance therewith in the form of a copy of
the Notice of Form 144 and appropriate letters of compliance from the holder of
such Option Shares and the securities broker-dealer to or through which such
Option Shares are being resold. No opinion of counsel for the holder of the
Option Shares shall be required respecting resales in reliance on Rule 144
pursuant to clause (ii) of this subparagraph (c).
(d) After two years from the date the Option
has been exercised and the Option Shares purchased as a result of such
exercise have been fully paid for, the Company shall, upon the written request
of any person who has held the Option Shares for two years (excluding any
tolling period provided for by Rule 144) and who is not, and has not been
during the preceding three months, an affiliate of the Company, reissue to such
holder in such names and denominations as the holder shall request, one or more
certificates for such Option Shares without any restriction whatsoever on their
further transfer and cancel any and all stop-transfer instructions regarding
such Option Shares on the books and records of the Company.
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12. Adequate Authorized Capitalization. The Company shall at all
times during the term of the Option reserve and keep available or otherwise
have authorized such number of shares of the Company's common stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all fees
and expenses necessarily incurred by the Company in connection therewith, and
shall from time to time use its best efforts to comply with all laws and
regulations which, in the opinion of legal counsel to the Company, shall be
applicable thereto.
13. Notices. All notices, requests, demands and other
communications called for or contemplated hereunder shall be in writing and
shall be deemed to have been duly given when personally delivered or when
mailed by United States certified or registered mail, postage prepaid,
addressed to the following parties or their successors in interest at the
following addresses, or at such other addresses as the parties may designate by
written notice in the manner aforesaid:
If to the Company: Wanderlust Interactive, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: President and CEO
If to Optionee: (See address on signature page)
14. Successors and Assigns. Subject to the limitations on
transferability contained in Section 6 hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, the Company's
successors in interest and assigns, and the Optionee's permitted successors in
interest.
15. Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
"Company" "Optionee"
WANDERLUST INTERACTIVE, INC. _______________________________
By:________________________________ _______________________________
Xxx Xxxxx, III, President and CEO Signature
_______________________________
Number and Street
_______________________________
City, State and Zip Code
(If Optionee is unmarried as of
the date hereof, then he shall
sign his name again below.)
I certify that, as of the date
hereof, I am not married.
_______________________________
Name of Optionee
