NO. < < STOCKOPTIONNO > >
ASK JEEVES, INC.
1996 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), is made and entered into as
of the date of grant set forth below (the "Date of Grant") by and between ASK
JEEVES, INC., a California corporation (the "Company"), and the participant
named below ("Participant"). Capitalized terms not defined herein shall have
the meaning ascribed to them in the Company's 1996 Equity Incentive Plan (the
"Plan").
PARTICIPANT: < < NAME > >
ADDRESS:
TOTAL OPTION SHARES:
EXERCISE PRICE PER SHARE: $
DATE OF GRANT:
VESTING COMMENCEMENT DATE:
EXPIRATION DATE:
TYPE OF STOCK OPTION:
(CHECK ONE): [ ] INCENTIVE STOCK OPTION
[ ] NONQUALIFIED STOCK OPTION
1. GRANT OF OPTION. The Company hereby grants to Participant an
option (the "Option") to purchase the total number of shares of Common Stock of
the Company set forth above (the "Shares") at the Exercise Price Per Share set
forth above (the "Exercise Price"), subject to all of the terms and conditions
of this Agreement and the Plan. If designated as an Incentive Stock Option
above, the Option is intended to qualify as an "incentive stock option" ("ISO")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. EXERCISE PERIOD.
2.1 EXERCISE PERIOD OF OPTION. Provided Participant
continues to be an employee of the Company or any Subsidiary or Parent
throughout the specified period, the Option shall become exercisable as
to portions of the Shares as follows: (a) Twenty-five percent (25%) of
the Shares subject to this Option shall vest on the first anniversary of
the Vesting Commencement Date; and (b) 2.08333% of the Shares subject to
this Option shall vest at the end of each month thereafter. If
application of the vesting percentage causes a fractional Share, such
Share shall be rounded down to a whole Share.
2.2 ACCELERATION OF VESTING
2.2.1 CORPORATE TRANSACTION. In the event of a
"corporate transaction" as such transactions are set forth in Section 18.1 of
the Plan (a "Corporate Transaction"), which occurs prior to the first
anniversary of the Vesting Commencement Date, any and all Shares subject to this
Option which would otherwise have vested under the terms of this Stock Option
Agreement on the later of (i) the first anniversary of the First Vesting Date or
(ii) six months following the date of the Corporate Transaction, whether or not
such Shares are fully vested on the effective date of such Corporate
Transaction, shall automatically become fully vested and exercisable immediately
prior to the effective date of such Corporate Transaction. In the event of a
Corporate Transaction which occurs after the first anniversary of the First
Vesting Date, subject to the terms and conditions of this Option Agreement, all
additional Shares shall vest six (6) months earlier than the original vesting
schedule applicable to such Shares as set forth in Section 2.1 above. In
addition, in the event of a Corporate Transaction, UNLESS this Option is, in
connection with the Corporate Transaction, either (i) assumed by the successor
corporation or Parent thereof or (ii) replaced with a comparable Option with
respect to shares of the capital stock of the successor corporation or Parent
thereof, or (iii) replaced with a cash incentive program of the successor
corporation which preserves the compensation element of this Option existing at
the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to this Option, THEN the
balance of all Shares under this Agreement which do not become fully exercisable
pursuant to the preceding sentence, shall automatically become fully vested and
exercisable immediately prior to the effective date of such Corporate
Transaction. The determination of Option comparability under clause (ii) above
shall be made by the Committee, and its determination shall be final, binding
and conclusive.
(a) Effective upon the consummation of the Corporate
Transaction, all outstanding Options hereunder shall terminate and cease to
remain outstanding, except to the extent assumed by the successor corporation or
its Parent.
(b) The portion of any Incentive Stock Option
accelerated under this Section 2.2.1 in connection with a Corporate Transaction
shall remain exercisable as an Incentive Stock Option under the Code only to the
extent the $100,000 dollar limitation of Section 422(d) of the Code is not
exceeded. To the extent such dollar limitation is exceeded, the accelerated
excess portion of such Option shall be exercisable as a Non-Qualified Stock
Option.
2.3 EXPIRATION. This Option shall in any event expire no
later than the Expiration Date set forth above and must be exercised, if at all,
on or before the Expiration Date, unless earlier terminated pursuant to this
Section 2.
3. TERMINATION.
3.1 TERMINATION FOR ANY REASON EXCEPT DEATH OR DISABILITY.
If Participant is Terminated for any reason, except death or Disability, the
Option, to the extent (and only to the extent) that it would have been
exercisable by Participant on the date of Termination, may be exercised by
Participant no later than three (3) months after the date of Termination, but in
any event no later than the Expiration Date.
3.2 TERMINATION BECAUSE OF DEATH OR DISABILITY. If
Participant is Terminated because of death or Disability of Participant, the
Option, to the extent that it is exercisable by Participant on the date of
Termination, may be exercised by Participant (or Participant's legal
representative) no later than twelve (12) months after the date of Termination,
but in any event no later than the Expiration Date.
3.3 NO OBLIGATION TO EMPLOY. Nothing in the Plan or this
Agreement shall confer on Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent, Subsidiary or Affiliate of
the Company, or limit in any way the right of the Company or any Parent,
Subsidiary or Affiliate of the Company to terminate Participant's employment or
other relationship at any time, with or without cause.
4. MANNER OF EXERCISE.
4.1 STOCK OPTION EXERCISE AGREEMENT. To exercise this
Option, Participant (or in the case of exercise after Participant's
death, Participant's executor, administrator, heir or legatee, as the
case may be) must deliver to the Company an executed stock option
exercise agreement in the form as may be approved by the Company from
time to time (the "Exercise Agreement"), which shall set forth, INTER
ALIA, Participant's election to exercise the Option, the number of
Shares being purchased, any restrictions imposed on the Shares and any
representations, warranties and agreements regarding Participant's
investment intent and access to information as may be required by the
Company to comply with applicable securities laws. If someone other
than Participant exercises the Option, then such person must submit
documentation reasonably acceptable to the Company that such person has
the right to exercise the Option.
4.2 LIMITATIONS ON EXERCISE. The Option may not be exercised
unless such exercise is in compliance with all applicable federal and state
securities laws, as they are in effect on the date of exercise. The Option may
not be exercised as to fewer than 100 Shares unless it is exercised as to all
Shares as to which the Option is then exercisable.
4.3 PAYMENT. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
check), or where expressly approved by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to
the Participant;
(b) by waiver of compensation due or accrued to
Participant for services rendered;
(c) provided that a public market for the Company's
stock exists, (1) through a "same day sale" commitment from Participant and a
broker-dealer that is a member of the National Association of Securities Dealers
(an "NASD Dealer") whereby Participant irrevocably elects to exercise the Option
and to sell a portion of the Shares so purchased to pay for the exercise price
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company, or (2) through a "margin"
commitment from Participant and an NASD Dealer whereby Participant irrevocably
elects to exercise the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the exercise price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly to the
Company; or
(d) by any combination of the foregoing.
4.4 TAX WITHHOLDING. Prior to the issuance of the Shares
upon exercise of the Option, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company. If the Committee
permits, Participant may provide for payment of withholding taxes upon exercise
of the Option by requesting that the Company retain Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the Participant by
deducting the Shares retained from the Shares issuable upon exercise.
4.5 ISSUANCE OF SHARES. Provided that the Exercise Agreement
and payment are in form and substance satisfactory to counsel for the Company,
the Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.
5. NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option
is an ISO, and if Participant sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (1) the date two years
after the Date of Grant, and (2) the date one year after transfer of such Shares
to Participant upon exercise of the Option, Participant shall immediately notify
the Company in writing of such disposition. Participant agrees that Participant
may be subject to income tax withholding by the Company on the compensation
income recognized by Participant from the early disposition by payment in cash
or out of the current wages or other compensation payable to Participant.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of the Option
and the issuance and transfer of Shares shall be subject to compliance by the
Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or
transfer. Participant understands that the Company is under no obligation to
register or qualify the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.
7. NONTRANSFERABILITY OF OPTION. The Option may not be transferred
in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Participant only by Participant. The
terms of the Option shall be binding upon the executors, administrators,
successors and assigns of Participant.
8. TAX CONSEQUENCES. Set forth below is a brief summary as of the
Date of Grant of some of the federal and state tax consequences of exercise of
the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.
8.1 EXERCISE OF ISO. If the Option qualifies as an ISO,
there will be no regular federal or state income tax liability upon the exercise
of the Option, although the excess, if any, of the fair market value of the
Shares on the date of exercise over the Exercise Price will be treated as a tax
preference item for federal income tax purposes and may subject the Participant
to the alternative minimum tax in the year of exercise.
8.2 EXERCISE OF NONQUALIFIED STOCK OPTION. If the Option
does not qualify as an ISO, there may be a regular federal or state income tax
liability upon the exercise of the Option. Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. The Company will be required to withhold from
Participant's compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
8.3 DISPOSITION OF SHARES. If the Shares are held for more
than twelve (12) months after the date of the transfer of the Shares pursuant to
the exercise of the Option (and, in the case of an ISO, are disposed of more
than two years after the Date of Grant), any gain realized on disposition of the
Shares will be treated as long term capital gain for federal and state income
tax purposes. If Shares purchased under an ISO are disposed of within one year
of exercise or within two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the excess, if any,
of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price. The Company will be required to withhold from Participant's compensation
or collect from Participant and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of
exercise.
9. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of
the rights of a shareholder with respect to any Shares until Participant
exercises the Option and pays the Exercise Price.
10. PUBLIC OFFERING LOCK-UP. For a period not to exceed one hundred
eighty (180) days following the date of the first effective registration
statement of the Company's common stock, Participant shall not sell, pledge or
otherwise transfer any Shares to any person or entity. In addition, Participant
agrees to execute, in connection with the initial public offering of the
Company's securities, such other documents confirming and/or restating the
"lock-up" provisions of this section.
11. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.
12. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.
13. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal
delivery; three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by facsimile or telecopier.
14. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and
assigns.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California as such laws are applied
to agreements between California residents entered into and to be performed
entirely within California.
16. ACCEPTANCE. Participant hereby acknowledges receipt of a copy of
the Plan and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in duplicate by its duly authorized representative and Participant has executed
this Agreement in duplicate as of the Effective Date.
ASK JEEVES, INC.
A CALIFORNIA CORPORATION
BY:
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PARTICIPANT ACKNOWLEDGES AND UNDERSTANDS THAT THE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR ANY
APPLICABLE STATE LAW IN RELIANCE UPON ONE OR MORE SPECIFIC EXEMPTIONS CONTAINED
IN THE ACT AND ANY APPLICABLE STATE LAW, WHICH MAY INCLUDE RELIANCE ON RULE 701
PROMULGATED UNDER THE ACT, IF AVAILABLE, OR WHICH MAY DEPEND UPON (I)
PARTICIPANT'S BONA FIDE INVESTMENT INTENTION IN ACQUIRING THESE SECURITIES;
(II) PARTICIPANT'S INTENTION TO HOLD THESE SECURITIES IN COMPLIANCE WITH FEDERAL
AND STATE SECURITIES LAWS; (III) PARTICIPANT HAVING NO PRESENT INTENTION OF
SELLING OR TRANSFERRING ANY PART THEREOF (RECOGNIZING THAT THE OPTION IS NOT
TRANSFERABLE) IN VIOLATION OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS; AND
(IV) THERE BEING CERTAIN RESTRICTIONS ON TRANSFER OF THE SHARES SUBJECT TO THE
OPTION;
PARTICIPANT UNDERSTANDS THAT THE SHARES SUBJECT TO THIS OPTION, IN ADDITION TO
OTHER RESTRICTIONS ON TRANSFER, MUST BE HELD INDEFINITELY UNLESS SUBSEQUENTLY
REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE LAW, OR UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE; THAT RULE 144, THE USUAL EXEMPTION FROM
REGISTRATION UNDER THE ACT, IS ONLY AVAILABLE AFTER THE SATISFACTION OF CERTAIN
HOLDING PERIODS AND IN THE PRESENCE OF A PUBLIC MARKET FOR THE SHARES; THAT
THERE IS NO CERTAINTY THAT A PUBLIC MARKET FOR THE SHARES WILL EXIST, AND THAT
OTHERWISE IT WILL BE NECESSARY THAT THE SHARES BE SOLD PURSUANT TO ANOTHER
EXEMPTION FROM REGISTRATION WHICH MAY BE DIFFICULT TO SATISFY; AND
PARTICIPANT UNDERSTANDS THAT THE CERTIFICATE REPRESENTING THE SHARES WILL BEAR A
LEGEND PROHIBITING THEIR TRANSFER IN THE ABSENCE OF THEIR REGISTRATION OR THE
OPINION OF COUNSEL FOR THE COMPANY THAT REGISTRATION IS NOT REQUIRED.
DATED: SIGNED:
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OPTIONEE
RESIDENCE ADDRESS:
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