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EXHIBIT 99.2
FORM OF INCENTIVE STOCK OPTION AGREEMENT
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COLLABORATIVE MARKETING, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement, effective as of ________, 199_,
made by and between Collaborative Marketing, Inc., a California corporation
("the Company"), and an Individual ("Optionee"). This Agreement is made
pursuant to the terms and conditions of the 1999 Stock Option Plan (the Plan"),
a copy of which is attached to this Agreement as Exhibit A.
1. Grant of Option. The Company grants to Optionee an option
(the "Option") to purchase _______ (____) shares of the Common Stock of the
Company (the "Shares"), on the terms and conditions set forth in the Plan and
in this Agreement.
2. Nature of the Option. The Option is intended to be an
incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
3. The Plan. This Option is granted pursuant to the Plan, the
provisions of which are incorporated into this Agreement by reference, and in
the event of any conflict between this Agreement and the Plan, the terms of the
Plan shall govern.
4. Option Price. The Option Price of the Shares to be purchased
pursuant to this Option shall be ______ ($___) per Share.
5. Vesting. Optionee's right to exercise the option granted in
this Agreement shall vest as provided in this paragraph.
(a) Provided that Optionee remains an employee of the
Company from the date of this Agreement through ________ [one quarter after the
Agreement date], ________ Shares [12.5% of the Shares] shall vest on ___ [one
quarter after the Agreement date];
(b) Thereafter, the remaining ________________ (_____)
shares shall vest in equal successive quarterly installments of________ Shares
per month on the ________ day of each continuous lull quarter of service. as an
employee that Optionee provides to the Company (as determined on the ________
day of each such quarter) until fully vested on __________ [two year
anniversary of the Agreement date].
(c) In the event of Optionee's death, disability or
other termination of employment, the exercisability of this Option shall be
governed by Sections 9(c), 9(d) and 9(e) of the Plan.
(d) The Option may not be exercised for fractional
shares or for less than one thousand shares (1,000) Shares unless the remaining
number of Shares subject to exercise is less than 1,000.
6. No Transfer or Assignment of Option. This Option and the
rights and privileges conferred hereby shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise)
except by will or the laws of descent and distribution
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and shall not be subject to sale under execution, attachment, or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate, or
otherwise dispose of this option, or of any right or privilege conferred
hereby, contrary to the provisions of this Agreement, or upon any attempted
sale under any execution, attachment, or similar process upon the rights and
privileges conferred hereby. this Option and the rights and privileges
conferred hereby shall immediately become null and void.
7. Method of Exercise.
(a) Notice. Optionee may exercise this option by
delivering a signed Notice of Exercise in substantially the form attached
hereto as Exhibit B to the officer of the Company designated in such notice
accompanied by a signed Restricted Stock Purchase Agreement in substantially
the form attached hereto as Exhibit C (if required by the Company at the time
of exercise of the Option) and payment in full of the aggregate purchase price
for the Shares.
(b) Restriction on Exercise. This Option may not be
exercised if the issuance of the Shares upon such exercise or the method of
payment of consideration for such Shares would constitute a violation of any
applicable Federal or state securities law or any other law or regulation.
Furthermore, the method and manner of payment of the Option Price will be
subject to the rules under Part 207 of Title 12 of the Code of Federal
Regulations ("Regulation G") as promulgated. by the Federal Reserve Board if
such rules apply to the Company at the date of exercise. As a condition to the
exercise of this Option, the Company may require the Optionee to make any
representation or warranty to the Company at the time of exercise of the Option
as in the opinion of legal counsel for the Company may be required by any
applicable law or regulation, including the execution and delivery of an
appropriate representation statement. Accordingly, the stock certificates for
the Shares issued upon exercise of this Option may bear appropriate legends
restricting transfer.
(c) Method of Payment. Payment of the exercise price
shall be by any of the following, or a combination thereof, at the election of
the Optionee:
a. cash;
b. certified or bank cashier's check; or
c. cancellation of indebtedness if agreed to
by Company;
d. promissory note if agreed to by Company
as, subject to the Board of Directors' discretion and approval, Company may
make loans or guarantee loans made by an appropriate financial institution to
individual optionees, including officers, on such terms as may be approved by
the Board for the purpose of financing the exercise of options granted under
the Plan and payment of taxes that maybe due by reason of such exercise; or
e. in the event there exists a public
market for the Company's Common Stock on the date of exercise, by surrender of
shares of the Company's Common Stock, provided that if such shares were
acquired upon exercise of an incentive stock option, the Optionee must have
first satisfied the holding period requirements under Section 22(a)(l) of the
Code. In this case payment shall be made as follows:
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(i) Optionee shall deliver to the Secretary
of the Company a written notice which shall set forth the portion of the
purchase price the Optionee wishes to pay with Common Stock, and the number of
shares of such Common Stock the Optionee intends to surrender pursuant to the
exercise of this Option, which shall be determined by dividing the
aforementioned portion of the purchase price by the average of the last
reported bid and asked prices per share of Common Stock of the Company, as
reported in The Wall Street Journal (or, if not SO reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotation
NASDAQ) System or, in the event the Common Stock is listed on a national
securities exchange, or on the NASDAQ National Market System (or any successor
national market system), the closing price of Common Stock of the Company on
such exchange as reported in the Wall Street Journal, for the day on which the
notice of exercise is sent or delivered;
(ii) Fractional shares shall be disregarded
and the Optionee shall pay in cash an amount equal to such fraction multiplied
by the price determined under subparagraph (I) above;
(iii) The written notice shall be accompanied
by a duly endorsed blank stock power with respect to the number of Shares set
forth in the notice, and the certificate(s) representing said Shares shall be
delivered to the Company at its principal offices within three (3) working days
from the date of the notice of exercise;
(iv) The Optionee hereby authorizes and
directs the Secretary of the Company to transfer so many of the Shares
represented by such certificate(s) as are necessary to pay the purchase price
in accordance with the provisions herein;
(v) If any such transfer of Shares requires
the consent of the California Commissioner of Corporations or of some other
agency under the securities laws of any other state, or an opinion of counsel
for the Company or Optionee that such transfer may be effected under applicable
Federal and state securities laws, the time periods specified herein shall be
extended for such periods as the necessary request for consent to transfer is
pending before said Commission or other agency, or until counsel renders such
an opinion, as the case may be. All parties agree to cooperate in making such
request for transfer, or in obtaining such opinion of counsel, and no transfer
shall be effected without such consent or opinion if required by law; and
(vi) Notwithstanding any other provision
herein, the Optionee shall only be permitted to pay the purchase price with
shares of the Company's Common Stock owned by him as of the exercise date in
the manner and within the time periods allowed under 17 CFR Section 240. 16b-3
promulgated under the Securities Exchange Act of 1934 as such regulation is
presently constituted, as it is amended from time to time, and as it is
interpreted now or hereafter by the Securities and Exchange Commission.
8. Term and Expiration. This option, if it has not earlier
expired pursuant to the terms this Agreement or the Plan, shall expire in all
Events on the tenth (10th) year anniversary of the effective date of this
Agreement.
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9. Compliance with State and Federal Securities Laws. No Shares
shall be issued upon the exercise of this option unless and until the Company
has determined that all applicable provisions of state and federal securities
laws have been satisfied.
10. Adjustment Upon Changes in Capitalization or Merger. The
number of Shares covered by this Option shall be adjusted in accordance with
the provisions of Section 11 of the Plan in the event of changes in the
capitalization pr organization of the Company, or if the Company is a party to
a merger or other corporate reorganization.
11. Repurchase Rights. The Optionee hereby agrees that any
Shares acquired upon the exercise of this Option shall be subject to the rights
of the Company to repurchase such Shares and to certain restrictions on
transfer specified in the Company's Bylaws and/or the Restricted Stock Purchase
Agreement attached hereto as Exhibit C.
12. Not Employment Contract. Nothing in this Agreement or in
the Plan shall confer upon the Optionee any right to continue in the employ of
the Company or shall interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to discharge the Optionee at any
time for any reason whatsoever, with or without cause, subject to the
provisions of applicable law. This is not an employment contract.
13. Income Tax Withholding. The Optionee authorizes the Company
to withhold in accordance with applicable law from any compensation payable to
him or her any taxes required to be withheld by Federal, state or local laws as
a result of the exercise of this Option. Furthermore, in the event of any
determination that the Company has failed to withhold a sum sufficient to pay
all withholding taxes due in connection with the exercise of this Option, the
Optionee agrees to pay the Company the amount of any such deficiency in cash
within five (5) days after receiving a written demand from the Company to do
so, whether or not Optionee is an Optionee of the Company at that time.
14. Miscellaneous Provisions.
(a) No Rights as a Shareholder. Optionee shall have no
rights as a shareholder with respect to any Shares subject to this option until
the Shares have been issued in the name of Optionee.
(b) Confidentiality. Optionee agrees and acknowledges
that the terms and conditions of this Agreement, including without limitation
the number of Shares for which options have been granted, are confidential.
Optionee agrees that he will not disclose these terms and conditions to any
third party, except to Optionee's financial or legal advisors, tax preparer or
family members, unless such disclosure is required by law.
(c) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts wholly made and performed in the State of California.
(d) Entire Agreement. This Agreement, and the Plan,
together with those documents that are referenced in this Agreement, are
intended to be the final, complete, and exclusive statement of the terms of the
agreement between Optionee and the Company with
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regard to the subject matter of this Agreement. This Agreement and the Plan
supersede all other prior agreements, communications, and statements, whether
written or oral, express or implied, pertaining to that subject matter. This
Agreement and the Plan may not be contradicted by evidence of any prior or
contemporaneous statements or agreements, oral or written, and may not be
explained or supplemented by evidence of consistent additional terms.
(e) Counterparts. This Agreement may be executed in
one or more counterparts all of which together shall constitute one and the
same instrument.
DATE OF GRANT: _______________, 19__
Collaborative Marketing, Inc.
By:
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Name:
Title:
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