ANSWERS CORPORATION FOR [ insert name of optionee here ] Agreement
ANSWERS
CORPORATION
102
CAPITAL GAIN STOCK
OPTION AGREEMENT
FOR
[ insert
name of optionee here ]
Agreement
1. Grant
of Option Answers
Corporation (the “Company”) hereby grants, as of __________ (“Date of Grant”),
to _________________ (the
“Optionee”) an option (the “Option”) to purchase up to ____________ shares of
the Company’s Common Stock, $0.001 par value per share (the “Shares”), at an
exercise price per share equal to $__________ (the “Exercise Price”). The Option
shall be subject to the terms and conditions set forth herein. The Option was
issued pursuant to the Company’s 2005 Incentive Compensation Plan (the “Plan”),
which is incorporated herein for all purposes. The Option is a Capital Gain
Award and shall be subject to Israeli taxation under the capital gains track
of
Section 102. The Option will be issued to the Trustee on behalf of the Optionee.
The Optionee hereby acknowledges receipt of a copy of the Plan and Trust
Agreement, as defined below, and agrees to be bound by all of the terms and
conditions hereof and thereof and all applicable laws and regulations including
the Ordinance.
2. Definitions Unless
otherwise provided herein, Capitalized terms used herein that are defined in
the
Plan and not defined herein shall have the meanings attributed thereto in the
Plan. [For purposes of this Agreement, the term “Cause” shall have the same
meaning as set forth on Exhibit
A
attached
hereto.]
3. Israeli
Tax Compliance
(a) The
Optionee agrees that the provisions of Section 102, as the same may be amended
from time to time and the agreement that was signed between the Company and
the
Trustee (the “Trust
Agreement”)
are
fully binding on the Optionee, and shall prevail in case of contradiction,
over
any other provision in this Agreement or in the Plan. Further, the Optionee
agrees to execute and deliver, from time to time, any and all documents which
the Company or the Trustee may reasonably determine to be necessary in order
to
comply with the Ordinance, and the rules and regulations promulgated thereunder,
all as in effect from time to time.
(b) The
Optionee shall not to make any disposition of the Options or the Shares received
upon exercise of such Options until the end of the Lockup Period. Should under
any circumstances the Options, or the Shares issued upon the exercise thereof,
be disposed of prior to the end of the Lockup Period, then, for Israeli tax
purposes, the provisions of Section 102 relating to non-compliance with the
Lockup Period, shall apply.
(c) The
provisions of Section 102 and the rules and regulations promulgated thereunder,
all as in effect from time to time relating to the allocation and exercise
of
options in the Section 102 capital gains track, shall apply to the Options
granted hereunder.
(d) Optionee
hereby releases the Trustee, the Company and any Related Entity from any
liability in respect of any action or decision duly taken with respect to the
Plan, the Options or the Shares issued upon exercise of the
Options.
(e) The
Options, and the Shares issued upon their exercise, will be held by the Trustee
in trust on behalf of the Optionee for a period of at least 24 months from
date
such Options are allocated to the Trustee or such other period as may be
required under the Ordinance or as may be approved by the Israeli tax
authorities (the “Lockup
Period”).
(f) All
rights related to the Options and the Shares issued upon their exercise will
be
held by the Trustee until the end of the Lock-up Period, including any bonus
shares or dividends in respect thereof, and will be subject to the provisions
of
Section 102 regarding the capital gain track taxation thereunder.
(g) Any
and
all taxes, fees and other liabilities (as may apply from time to time) in
connection with the grant, the exercise, sale or other disposition of the
Options or the Shares issued upon the exercise thereof, will be borne by the
Optionee and Optionee shall be solely liable for all such taxes, fees and other
liabilities. Furthermore, the Optionee hereby agrees to indemnify, defend and
hold harmless the Company, any Related Entity and the Trustee and hold them
harmless against and from any and all liability for any such tax or interest
or
penalty thereon.
(h) In
the
event that the Company or the Trustee determines that it is
required to withhold any tax as a result of the exercise of the Options, the
Optionee, as a condition to the exercise of the Options, shall make arrangements
satisfactory to the Company and the Trustee to enable them to satisfy
all withholding requirements. The Optionee shall also make arrangements
satisfactory to the Company to enable it to satisfy any withholding requirements
that may arise in connection with the vesting or
disposition of Shares purchased by exercising the Options.
(i) Anything
to the contrary notwithstanding, the Trustee shall not release any Options
or
any Shares issued upon exercise of the Options, prior to the full payment of
the
Exercise Price by the Optionee and payment by the Optionee of its’ tax liability
arising from such Options or Shares issued upon exercise thereof or the
Optionee's guarantee of payment of such taxes in a form reasonably acceptable
to
the Trustee and Company and in compliance with the Ordinance.
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Except
as
otherwise specifically provided herein, there shall be no proportionate or
partial vesting in the periods prior to each Vesting Date, and all vesting
shall
occur only on the appropriate Vesting Date. Upon the termination of the
Optionee’s Continuous Service with the Company and its Related Entities, any
unvested portion of the Option shall terminate and be null and
void.
5. Method
of Exercise (a) The
vested portion of this Option shall be exercisable in whole or in part in
accordance with the exercise schedule set forth in Section 4 hereof by written
notice ("Exercise Notice") which shall state the election to exercise the
Option, the number of Shares in respect of which the Option is being exercised,
and such other representations and agreements as to the holder’s investment
intent with respect to such Shares as may be required by the Company pursuant
to
the provisions of the Plan. Such Exercise Notice shall be signed by the Optionee
and shall be delivered in person or by certified mail to the Secretary of the
Company and the Trustee. The Exercise Notice to the Company shall be accompanied
by payment of the Exercise Price. This Option shall be deemed to be exercised
after both (i) receipt by the Company of such Exercise Notice accompanied by
the
Exercise Price and (ii) arrangements that are satisfactory to the Committee
in
its sole discretion have been made for Optionee’s payment to the Company of the
amount, if any, that is necessary to be withheld in accordance with applicable
Federal or state withholding requirements. After an Exercise Notice has been
delivered to the Company (and the Trustee if relevant), it may not be rescinded
or revised by the Optionee.
(b) As
a
condition to the exercise of any of the Options, (i) the Optionee shall sign
any
and all documents required by the Company, the Trustee or by applicable law,
all
as in effect from time to time, and (ii) together with the payment of the
Exercise Price the Optionee shall deliver to the Company and Trustee proof,
reasonably acceptable to the Company and Trustee, the all taxes due in respect
of the grant and exercise of the Options have been paid to the relevant tax
authorities, or Optionee has made adequate provision to guarantee that all
such
taxes will be paid on or before the date due therefore, to the satisfaction
of
the Company and Trustee in their sole discretion.
(c) The
Shares issuable upon the exercise of the Options shall be issued to, and in
the
name of Trustee, unless the Section 102 capital gain track permits the issuance
of such Shares to the Optionee.
(d) The
Trustee will transfer the Shares to the Optionee upon the Optionee's demand,
subject to compliance with the Plan, the Ordinance and this Agreement (including
the Lockup Period).
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(e) No
Shares
will be issued pursuant to the Option unless and until such issuance and such
exercise shall comply with all relevant provisions of applicable law, including
the requirements of any stock exchange upon which the Shares then may be
traded.
6. 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) check; (c) with Shares
that have been held by the Optionee for at least 6 months free and clear of
any
Lockup Period (or such other Shares as the Company determines will not cause
the
Company to recognize for financial accounting purposes a charge for compensation
expense), (d) pursuant to a “cashless exercise” procedure, by delivery of a
properly executed exercise notice together with such other documentation, and
subject to such guidelines, as the Committee shall require to effect an exercise
of the Option and delivery to the Company by a licensed broker acceptable to
the
Company of proceeds from the sale of Shares or a margin loan sufficient to
pay
the Exercise Price and any applicable income or employment taxes, (e) awards
granted under other plans of the Company or a Related Entity, or other property
(including notes or other contractual obligations of Participants to make
payment on a deferred basis provided that such deferred payments are not in
violation of the Xxxxxxxx-Xxxxx Act of 2002, or any rule or regulation adopted
thereunder or any other applicable law) or (f) such other consideration or
in
such other manner as may be determined by the Committee in its absolute
discretion.
7. Termination
of Option
(a) Any
unexercised portion of the Option shall automatically and without notice
terminate and become null and void at the time of the earliest to occur of
the
following:
(i) unless
the Committee otherwise determines in writing in its sole discretion, three
months after the date on which the Optionee’s Continuous Service with the
Company and its Related Entities is terminated for any reason other than by
reason of (A) termination of the Optionee’s Continuous Service by the Company or
a Related Entity for Cause, (B) a Disability of the Optionee as determined
by a
medical doctor satisfactory to the Committee, or (C) the Optionee's
death;
(ii) immediately
upon the termination of the Optionee’s Continuous Service with the Company and
its Related Entities for Cause;
(iii) twelve
months after the date on which the Optionee’s Continuous Service with the
Company and its Related Entities is terminated by reason of a Disability as
determined by a medical doctor satisfactory to the Committee;
(iv) twelve
months after the date of termination of the Optionee’s Continuous Service with
the Company and its Related Entities by reason of the death of the Optionee
(or,
if later, three months after the date on which the Optionee shall die if such
death shall occur during the one year period specified in paragraph (iii) of
this Section 7);
or
(v) the
sixth
anniversary of the Date of Grant.
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(b) In
the
event of any merger, consolidation or other reorganization in which the Company
does not survive, or in the event of any Change in Control, any outstanding
Option may be dealt with in accordance with any of the following approaches,
as
determined by the agreement effectuating the transaction or, if and to the
extent not so determined, as determined by the Committee: (a) the continuation
of the outstanding Option by the Company, if the Company is a surviving
corporation, (b) the assumption or substitution for the outstanding Option
by
the surviving corporation or its parent or subsidiary, (c) full exercisability
or vesting and accelerated expiration of the outstanding Option, or (d)
settlement of the value of the outstanding Option in cash or cash equivalents
or
other property followed by cancellation of such Awards (which value, in the
case
of Options, shall be measured by the amount, if any, by which the Fair Market
Value of a Share exceeds the exercise or xxxxx xxxxx of the Option as of the
effective date of the transaction). The Committee shall give written notice
of
any proposed transaction referred to in this Section a reasonable period of
time
prior to the closing date for such transaction (which notice may be given either
before or after the approval of such transaction), in order that the Optionee
may have a reasonable period of time prior to the closing date of such
transaction within which to exercise any Option that are then exercisable
(including any Options that may become exercisable upon the closing date of
such
transaction). The Optionee may condition his or her exercise of any Option
upon
the consummation of the transaction. The treatment of any outstanding Options
in
the event of any merger, consolidation or other reorganization in which the
Company does not survive, or in the event of any Change in Control shall comply
with all applicable law, including the Ordinance.
8. Transferability Unless
otherwise determined by the Committee in compliance with applicable law, the
Option granted hereby is not transferable otherwise than by will or under the
applicable laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s
guardian or legal representative. In addition, the Option shall not be assigned,
negotiated, pledged or hypothecated in any way (whether by operation of law
or
otherwise), and the Option shall not be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the Option, or in the event of any levy upon the Option by reason
of
any execution, attachment or similar process contrary to the provisions hereof,
the Option shall immediately become null and void. The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
9. No
Rights of Stockholders Neither
the Optionee nor any personal representative (or beneficiary) shall be, or
shall
have any of the rights and privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of
the
Option, in whole or in part, prior to the date of exercise of the
Option.
10. Acceleration
of Exercisability of Option
(a) This
Option shall become immediately fully exercisable in the event that, prior
to
the termination of the Option pursuant to Section 7 hereof, and during the
Optionee's Continuous Service, there is a “Change in Control”, as defined in
Section 9 of the Plan.
5
(b) Notwithstanding
the foregoing, if in the event of a Change in Control the successor company
assumes or substitutes for this Option, then each outstanding Option shall
not
be accelerated as described above. For the purposes of this Section 10(b),
an
Option shall be considered assumed or substituted for if following the Change
in
Control the award confers the right to purchase or receive, for each Share
subject to the Option immediately prior to the Change in Control, the
consideration (whether stock,
cash or
other securities or property) received in the transaction constituting a Change
in Control by holders of Shares for each Share held on the effective date of
such transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the
transaction constituting a Change in Control is not solely common stock of
the
successor company or its parent or subsidiary, the Committee may, with the
consent of the successor company or its parent or subsidiary, provide that
the
consideration to be received upon the exercise or vesting of an Option, for
each
Share subject thereto, will be solely common stock of the successor company
or
its parent or subsidiary substantially equal in fair market value to the per
share consideration received by holders of Shares in the transaction
constituting a Change in Control. The determination of such substantial equality
of value of consideration shall be made by the Committee in its sole discretion
and its determination shall be conclusive and binding.
11. Miscellaneous
Provisions
(a) No
Right to Continued Employment.
Neither
the Option nor this Agreement shall confer upon the Optionee any right to
continued employment or service with the Company or any Related
Entity.
(b) Law
Governing.
This
Agreement shall be governed in accordance with and governed by the internal
laws
of the State of Delaware.
(c) Entire
Agreement.Subject
to the provisions of the Plan and the Ordinance, this Agreement, together with
the exhibits hereto, constitute the entire agreement between the Optionee and
the Company with respect to the Options granted hereunder, and with respect
to
all options to purchase shares in the Company which have not yet been actually
issued or granted, and that any agreement, arrangement or understanding as
aforesaid is null and void and of no further force or effect., and the
provisions of the Plan and the Ordinance, and this Agreement, together with
the
exhibits hereto, supersede all prior agreements, understandings and
arrangements, oral or written, between the Optionee, the Company and any Related
Entity with respect to the subject matter hereof.
(d) Interpretation
/ Provisions of Plan Control.
This
Agreement is subject to all the terms, conditions and provisions of the Plan,
including, without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the Plan adopted by the
Committee as may be in effect from time to time. If and to the extent that
this
Agreement conflicts or is inconsistent with the terms, conditions and provisions
of the Plan, the Plan shall control, and this Agreement shall be deemed to
be
modified accordingly. This Agreement is further subject to the Ordinance and
if
and to the extent that the Plan or this Agreement conflict or are inconsistent
with the Ordinance, then the Ordinance shall control, The Optionee accepts
the
Option subject to all the terms and provisions of the Plan and this Agreement.
The undersigned Optionee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
the Plan and this Agreement, unless shown to have been made in an arbitrary
and
capricious manner.
6
(e) The
Optionee acknowledges that the Company may issue additional shares of capital
stock and to issue additional options to purchase stock in the future to various
entities and individuals, as the Company in its sole discretion shall
determine.
(f) Notices.
Any notice under this Agreement shall be in writing and shall be deemed to
have
been duly given (i)
by
registered or certified mail, postage prepaid, return receipt requested,
effective 7 days after posting, (ii) by confirmed fax, effective on the next
business day in recipient’s location, or (iii) by messenger or courier,
effective upon receipt.
The
address of the Company shall be the Company’s Secretary at 000 Xxxx
00xx
Xxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000, or if the Company should move its principal
office, to such principal office, and, in the case of the Optionee, to the
Optionee’s last permanent address as shown on the Company’s records, subject to
the right of either party to designate some other address at any time hereafter
in a notice satisfying the requirements of this Section.
(g) Tax
Consequences.
THE
RECEIPT OF THIS OPTION GRANT AND THE EXERCISE OF SUCH OPTIONS MAY BE SUBJECT
TO
TAX OR EXEMPT FORM TAX THE UNITED STATES OR ISRAEL. OPTIONEE SHOULD CONSULT
WITH
HIS/HER TAX ADVISOR IN ADVANCE CONCERNING THE RAMIFICATIONS TO OPTIONEE OF
RECEIVING, HOLDING OR EXERCISING THE OPTIONS OR HOLDING OR SELLING THE SHARES
UNDERLYING SUCH OPTIONS.
(i) This
Agreement shall bind and inure to the benefit of the parties hereto and the
successors and assigns of the Company and, to the extent provided in the Plan,
Optionee's executors, administrators, legatees and heirs.
(j) The
failure of any party to enforce at any time any provisions of this Agreement
or
the Plan shall in no way be construed to be a waiver of such provision or of
any
other provision hereof.
(k) This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same Agreement.
7
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the [ ]
day
of [ ], [ ].
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COMPANY:
ANSWERS
CORPORATION
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| By: | ||
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The
Optionee acknowledges receipt of a copy of the Plan and represents that he
or
she has reviewed the provisions of the Plan and this Option Agreement in their
entirety, is familiar with and understands their terms and provisions and is
familiar with Section 102, as defined in the Plan, and hereby accepts this
Option subject to all of the terms and provisions of the Plan and the Option
Agreement. The Optionee further represents that he or she has had an opportunity
to obtain the advice of counsel prior to executing this Option
Agreement.
| Dated:________________________________ | ||
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OPTIONEE:
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| By: | ||
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EXHIBIT
A
The
following terms shall have the meanings indicated:
1. “Cause”
shall mean a felony conviction
by a court of law (which guilty verdict is sustained on final appeal) in
connection with and limited to his services to the Company or a Related Entity,
or pleading guilty to or no contest to a felony involving fraud, embezzlement,
misappropriation of funds in connection with and limited to his services to
the
Company or a Related Entity. Any termination for Cause shall be made in writing
to the Optionee, which notice shall set forth in detail all acts or omissions
upon which the Company is relying for such termination.
