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EXHIBIT 99.2
PREMIA CORPORATION
INCENTIVE STOCK OPTION LETTER AGREEMENT
TO: Date of Xxxxx: February 1, 2000
We are pleased to inform you that you have been selected by the Plan
Administrator of Premia Corporation's (the "Company") 1998 Stock Option Plan
(the "Plan") to receive an incentive stock option for the purchase of 1,000
shares of the Company's Common Stock at an exercise price of $ 2.75 per share.
The Plan is incorporated into this Agreement by reference.
The terms of this option are as set forth in the Plan and in this Agreement.
This Agreement is subject to and in accordance with the express terms and
conditions of the Plan and is in all respects limited by and subject to the
express terms and provisions of the Plan. Capitalized terms used without
definition have the meanings ascribed to them in the Plan. The most important of
the terms set forth in the Plan are summarized as follows:
TERM: The term of this option is ten years from date of grant, unless sooner
terminated.
VESTING: This option shall vest based on your hire date and the following
schedule:
DATE ON AND AFTER WHICH OPTION IS PORTION OF TOTAL OPTION WHICH IS
EXERCISABLE EXERCISABLE
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After 1 year of employment 25%
After 1 year and 1 month of employment 2% per month
and for each complete month thereafter
Each option will become exercisable, up to the portion of the Option vested,
upon the earlier to occur of (i) ten (10) years from the Grant Date, (ii) upon
the closing of an underwritten initial public offering with an aggregate price
to the public in excess of $10 million ("IPO"), or (iii) immediately prior to
the specified effective date of a Corporate Transaction such as the sale of the
Company or its stock to a third party. An Option may be exercised from time to
time by written notice to the Company, in accordance with procedures established
by the Plan Administrator, setting forth the number of shares with respect to
which the Option is being exercised and accompanied by payment in full. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time (or the lesser number of remaining
shares covered by the Option).
ISO QUALIFICATION: To the extent that the aggregate fair market value of the
shares with respect to which this option is exercisable for the first time by
you during any calendar year (under this option and all other incentive stock
options you hold) exceeds $100,000, the excess portion will be treated as a
nonqualified stock option, unless the Internal Revenue Service changes the rules
and regulations governing the $100,000 limit for incentive stock options.
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TERMINATION: Unless otherwise determined at any time by the Plan Administrator,
this option will terminate immediately upon termination for cause, as defined in
the Plan, or one year after termination of service as a result of retirement,
early retirement at the Company's request, disability, or death or three months
after all other terminations, but in each case not later than the remaining term
of this option. This option must be exercised within three months after
termination of employment for reasons other than death or disability and one
year after termination of employment due to disability to qualify for the
beneficial tax treatment afforded to incentive stock options.
EXERCISE: During your lifetime only you can exercise this option. The Plan also
provides for exercise of this option by the personal representative of your
estate or the beneficiary thereof following your death. You may use the Notice
of Exercise of Incentive Stock Option in the form attached to this Agreement
when you exercise this option.
The Plan Administrator may, in its sole discretion at the time of exercise,
determine that the exercise of this option is subject to your execution of an
agreement, in the form in use at the time of exercise, whereby under certain
circumstances, you grant to the Company a right of first offer to purchase the
shares acquired by you upon exercise of this option.
PAYMENT FOR SHARES: Unless the Plan Administrator at any time determines
otherwise, this option may be exercised by the delivery of a Notice of Exercise
of Stock Option in the form attached together with a check in the aggregate
exercise price of the shares.
WITHHOLDING TAXES: As a condition to the exercise of any portion of this option
which is treated as a nonqualified stock option, you shall make such
arrangements as the Company may require for the satisfaction of any federal,
state or local withholding tax obligations that may arise in connection with
such exercise. The Company shall have the right to retain without notice
sufficient shares of stock to satisfy the withholding obligation. Unless the
Plan Administrator determines otherwise, you may satisfy the withholding
obligation by electing to have the Company or related corporation withhold from
the shares to be issued upon exercise that number of shares having a fair market
value equal to the amount required to be withheld.
TRANSFER OF OPTION: This option is not transferable except by will or by the
applicable laws of descent and distribution.
HOLDING PERIODS:
A. SECURITIES EXCHANGE ACT SECTION 16
If an individual subject to Section 16 of the Exchange Act sells shares of
Common Stock obtained upon the exercise of a stock option within six months
after the date this option was granted, such sale may result in short-swing
profit recovery under Section 16(b) of the Exchange Act.
B. TAXATION OF STOCK OPTIONS
In order to obtain certain tax benefits afforded to incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended, you must
hold the shares issued upon the exercise of an incentive stock option for two
years after the date of grant of this option and one year from the date of
exercise. You may be subject to the alternative minimum tax at the time of
exercise.
You should obtain tax advice when exercising any option and prior to the
disposition of the shares issued upon the exercise of any option.
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REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 15.3 OF THE PLAN,
WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE
SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THIS OPTION CAN BE EXERCISED AND
BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY HAS NO OBLIGATION TO
REGISTER THE SHARES THAT WOULD BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND
IF IT NEVER REGISTERS THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THIS OPTION
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME,
EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY
LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE EXPIRATION OF THIS OPTION.
CONSEQUENTLY, YOU MIGHT HAVE NO OPPORTUNITY TO EXERCISE THIS OPTION AND TO
RECEIVE SHARES UPON SUCH EXERCISE.
Please execute the Acceptance and Acknowledgment set forth below on the enclosed
copy of this Agreement and return it to the undersigned.
Very truly yours,
PREMIA CORPORATION
By:
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President
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