EXHIBIT 99.1
LOUDEYE CORP.
2005 INCENTIVE AWARD PLAN
STOCK OPTION GRANT NOTICE AND
STOCK OPTION AGREEMENT
Loudeye Corp., a Delaware corporation (the "COMPANY"), pursuant to its
2005 Incentive Award Plan (the "PLAN"), hereby grants to the holder listed below
("PARTICIPANT"), an option to purchase the number of shares of the Company's
common stock, par value $0.01 ("STOCK"), set forth below (the "OPTION"). This
Option is subject to all of the terms and conditions set forth herein and in the
Stock Option Agreement attached hereto as Exhibit A (the "STOCK OPTION
AGREEMENT") and the Plan, which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Grant Notice and the Stock Option Agreement.
PARTICIPANT: __________________________________
GRANT DATE: __________________________________
EXERCISE PRICE PER SHARE: $_________________________________
TOTAL EXERCISE PRICE: $_________________________________
TOTAL NUMBER OF SHARES
SUBJECT TO THE OPTION: shares
EXPIRATION DATE: __________________________________
TYPE OF OPTION: [ ] Incentive Stock Option [ ] Non-Qualified Stock Option
VESTING SCHEDULE: [To be specified in individual agreements]
By his or her signature, Participant agrees to be bound by the terms and
conditions of the Plan, the Stock Option Agreement and this Grant Notice.
Participant has reviewed the Stock Option Agreement, the Plan and this Grant
Notice in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Grant Notice and fully understands all provisions of
this Grant Notice, the Stock Option Agreement and the Plan. Participant hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator of the Plan upon any questions arising
under the Plan or relating to the Option.
LOUDEYE CORP. PARTICIPANT
By: _____________________________________ By: _________________________________
Print Name: _____________________________ Print Name: _________________________
Title: __________________________________
Address: 0000 Xxxxxxx Xxxxxx Xxxxx, Address: ____________________________
Seattle, WA 98144
EXHIBIT A
TO STOCK OPTION GRANT NOTICE
STOCK OPTION AGREEMENT
Pursuant to the Stock Option Grant Notice (the "GRANT NOTICE") to which
this Stock Option Agreement (this "AGREEMENT") is attached, Loudeye Corp., a
Delaware corporation (the "COMPANY"), has granted to Participant an option under
the Company's 2005 Incentive Award Plan (the "PLAN") to purchase the number of
shares of Stock indicated in the Grant Notice.
ARTICLE I
GENERAL
1.1 Defined Terms. Capitalized terms not specifically defined herein shall
have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Option is subject to the terms and
conditions of the Plan which are incorporated herein by reference.
ARTICLE II
GRANT OF OPTION
2.1 Grant of Option. In consideration of Participant's past and/or
continued employment with or service to the Company or a Parent or Subsidiary
and for other good and valuable consideration, effective as of the Grant Date
set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants
to Participant the Option to purchase any part or all of an aggregate of the
number of shares of Stock set forth in the Grant Notice, upon the terms and
conditions set forth in the Plan and this Agreement. Unless designated as a
Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive
Stock Option to the maximum extent permitted by law.
2.2 Exercise Price. The exercise price of the shares of Stock subject to
the Option shall be as set forth in the Grant Notice, without commission or
other charge; provided, however, that the price per share of the shares subject
to the Option shall not be less than 100% of the Fair Market Value of a share of
Stock on the Grant Date. Notwithstanding the foregoing, if this Option is
designated as an Incentive Stock Option and Participant owns (within the meaning
of Section 424(d) of the Code) more than 10% of the total combined voting power
of all classes of stock of the Company or any "subsidiary corporation" of the
Company or any "parent corporation" of the Company (each within the meaning of
Section 424 of the Code), the price per share of the shares subject to the
Option shall not be less than 110% of the Fair Market Value of a share of Stock
on the Grant Date.
2.3 Consideration to the Company. In consideration of the grant of the
Option by the Company, Participant agrees to render faithful and efficient
services to the Company or any Parent or Subsidiary. Nothing in the Plan or this
Agreement shall confer upon Participant any right to continue in the employ or
service of the Company or any Parent or Subsidiary or shall interfere with or
restrict in any way the rights of the Company and its Parents and Subsidiaries,
which rights are hereby expressly reserved, to discharge or terminate the
services of Participant at any time for any reason whatsoever, with or without
Cause, except to the extent expressly provided otherwise in a written agreement
between the Company, a Parent or a Subsidiary and Participant.
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ARTICLE III
PERIOD OF EXERCISABILITY
3.1 Commencement of Exercisability.
(a) Subject to Sections 3.3, 5.7 and 5.9, the Option shall become
vested and exercisable in such amounts and at such times as are set forth in the
Grant Notice.
(b) No portion of the Option which has not become vested and
exercisable at the date of Participant's Termination of Employment, Termination
of Directorship or Termination of Consultancy shall thereafter become vested and
exercisable, except as may be otherwise provided by the Administrator or as set
forth in a written agreement between the Company and Participant.
3.2 Duration of Exercisability. The installments provided for in the
vesting schedule set forth in the Grant Notice are cumulative. Each such
installment which becomes vested and exercisable pursuant to the vesting
schedule set forth in the Grant Notice shall remain vested and exercisable until
it becomes unexercisable under Section 3.3.
3.3 Expiration of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:
(a) The expiration of ten years from the Grant Date;
(b) If this Option is designated as an Incentive Stock Option and
Participant owned (within the meaning of Section 424(d) of the Code), at the
time the Option was granted, more than 10% of the total combined voting power of
all classes of stock of the Company or any "subsidiary corporation" of the
Company or any "parent corporation" of the Company (each within the meaning of
Section 424 of the Code), the expiration of five years from the Grant Date;
(c) The expiration of three months from the date of Participant's
Termination of Employment, Termination of Directorship or Termination of
Consultancy, unless such termination occurs by reason of Participant's death,
Disability or Participant's discharge for Cause;
(d) The expiration of one year from the date of Participant's
Termination of Employment, Termination of Directorship or Termination of
Consultancy by reason of Participant's death or Disability; or
(e) The date of Participant's Termination of Employment, Termination
of Directorship or Termination of Consultancy by the Company or any Parent or
Subsidiary by reason of Participant's discharge for Cause.
Participant acknowledges that an Incentive Stock Option exercised more
than three months after Participant's Termination of Employment, other than by
reason of death or Disability, will be taxed as a Non-Qualified Stock Option.
3.4 Special Tax Consequences. Participant acknowledges that, to the extent
that the aggregate Fair Market Value (determined as of the time the Option is
granted) of all shares of Stock with respect to which Incentive Stock Options,
including the Option, are exercisable for the first time by Participant in any
calendar year exceeds $100,000, the Option and such other options shall be
Non-Qualified Stock Options to the extent necessary to comply with the
limitations imposed by Section 422(d)
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of the Code. Participant further acknowledges that the rule set forth in the
preceding sentence shall be applied by taking the Option and other "incentive
stock options" into account in the order in which they were granted, as
determined under Section 422(d) of the Code and the Treasury Regulations
thereunder.
ARTICLE IV
EXERCISE OF OPTION
4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and
5.2(c), during the lifetime of Participant, only Participant may exercise the
Option or any portion thereof. After the death of Participant, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by Participant's personal
representative or by any person empowered to do so under the deceased
Participant's will or under the then applicable laws of descent and
distribution.
4.2 Partial Exercise. Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at any
time prior to the time when the Option or portion thereof becomes unexercisable
under Section 3.3.
4.3 Manner of Exercise. The Option, or any exercisable portion thereof,
may be exercised solely by delivery to the Secretary of the Company or the
Secretary's office of all of the following prior to the time when the Option or
such portion thereof becomes unexercisable under Section 3.3:
(a) An Exercise Notice in writing signed by Participant or any other
person then entitled to exercise the Option or portion thereof, stating that the
Option or portion thereof is thereby exercised, such notice complying with all
applicable rules established by the Administrator. Such notice shall be
substantially in the form attached as Exhibit B to the Grant Notice (or such
other form as is prescribed by the Administrator);
(b) The receipt by the Company of full payment for the shares with
respect to which the Option or portion thereof is exercised, including payment
of any applicable withholding tax, which may be in one or more of the forms of
consideration permitted under Section 4.4;
(c) A bona fide written representation and agreement, in such form
as is prescribed by the Administrator, signed by Participant or the other person
then entitled to exercise such Option or portion thereof, stating that the
shares of Stock are being acquired for Participant's own account, for investment
and without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act and then
applicable rules and regulations thereunder and any other applicable law, and
that Participant or other person then entitled to exercise such Option or
portion thereof will indemnify the Company against and hold it free and harmless
from any loss, damage, expense or liability resulting to the Company if any sale
or distribution of the shares by such person is contrary to the representation
and agreement referred to above. The Administrator may, in its absolute
discretion, take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state securities
laws or regulations and any other applicable law. Without limiting the
generality of the foregoing, the Administrator may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Securities Act, and may issue
stop-transfer orders covering such shares. Share certificates evidencing Stock
issued on exercise of the Option shall bear an appropriate legend referring to
the provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have
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been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than Participant,
appropriate proof of the right of such person or persons to exercise the Option.
4.4 Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Participant:
(a) cash;
(b) check;
(c) with the consent of the Administrator, delivery of a promissory
note bearing interest at no less than such rate shall then preclude the
imputation of interest under the Code;
(d) with the consent of the Administrator, delivery of a notice that
the Participant has placed a market sell order with a broker with respect to
shares of Stock then issuable upon exercise of the Option, and that the broker
has been directed to pay a sufficient portion of the net proceeds of the sale to
the Company in satisfaction of the aggregate exercise price; provided, that
payment of such proceeds is then made to the Company upon settlement of such
sale;
(e) with the consent of the Administrator, surrender of other shares
of Stock which (A) in the case of shares of Stock acquired from the Company,
have been owned by the Participant for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the shares with respect to which the Option or
portion thereof is being exercised;
(f) with the consent of the Administrator, surrendered shares of
Stock issuable upon the exercise of the Option having a Fair Market Value on the
date of exercise equal to the aggregate exercise price of the shares with
respect to which the Option or portion thereof is being exercised; or
(g) with the consent of the Administrator, property of any kind
which constitutes good and valuable consideration.
4.5 Conditions to Issuance of Stock Certificates. The shares of Stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any shares
of Stock purchased upon the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges
on which such Stock is then listed;
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations of
the Securities and Exchange Commission or of any other governmental regulatory
body, which the Administrator shall, in its absolute discretion, deem necessary
or advisable;
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(c) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable;
(d) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax, which may be in one or more
of the forms of consideration permitted under Section 4.4; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may from time to time establish for
reasons of administrative convenience.
4.6 Rights as Stockholder. The holder of the Option shall not be, nor have
any of the rights or privileges of, a stockholder of the Company in respect of
any shares purchasable upon the exercise of any part of the Option unless and
until such shares shall have been issued by the Company to such holder (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
shares are issued, except as provided in Article 11 of the Plan.
ARTICLE V
OTHER PROVISIONS
5.1 Administration. The Administrator shall have the power to interpret
the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Administrator in good faith shall
be final and binding upon Participant, the Company and all other interested
persons. No member of the Administrator shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan, this Agreement or the Option. In its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Administrator under the Plan and this Agreement.
5.2 Option Not Transferable.
(a) Subject to Section 5.2(b), the Option may not be sold, pledged,
assigned or transferred in any manner other than by will or the laws of descent
and distribution, unless and until the shares underlying the Option have been
issued, and all restrictions applicable to such shares have lapsed. Neither the
Option nor any interest or right therein shall be liable for the debts,
contracts or engagements of Participant or his or her successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
(b) Notwithstanding any other provision in this Agreement, with the
consent of the Administrator and to the extent the Option is not intended to
qualify as an Incentive Stock Option, the Option may be transferred to one or
more Permitted Transferees, subject to the terms and conditions set forth in
Section 10.3 of the Plan.
(c) Unless transferred to a Permitted Transferee in accordance with
Section 5.2(b), during the lifetime of Participant, only Participant may
exercise the Option or any portion thereof. Subject to such conditions and
procedures as the Administrator may require, a Permitted Transferee may
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exercise the Option or any portion thereof during Participant's lifetime. After
the death of Participant, any exercisable portion of the Option may, prior to
the time when the Option becomes unexercisable under Section 3.3, be exercised
by Participant's personal representative or by any person empowered to do so
under the deceased Participant's will or under the then applicable laws of
descent and distribution.
5.3 Restrictive Legends and Stop-Transfer Orders.
(a) The share certificate or certificates evidencing the shares of
Stock purchased hereunder shall be endorsed with any legends that may be
required by state or federal securities laws.
(b) Participant agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
(c) The Company shall not be required: (i) to transfer on its books
any shares of Stock that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement, or (ii) to treat as owner of such
shares of Stock or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such shares shall have been so transferred.
5.4 Shares to Be Reserved. The Company shall at all times during the term
of the Option reserve and keep available such number of shares of Stock as will
be sufficient to satisfy the requirements of this Agreement.
5.5 Notices. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of the Secretary of the
Company at the address given beneath the signature of the Company's authorized
officer on the Grant Notice, and any notice to be given to Participant shall be
addressed to Participant at the address given beneath Participant's signature on
the Grant Notice. By a notice given pursuant to this Section 5.5, either party
may hereafter designate a different address for notices to be given to that
party. Any notice which is required to be given to Participant shall, if
Participant is then deceased, be given to the person entitled to exercise his or
her Option pursuant to Section 4.1 by written notice under this Section 5.5. Any
notice shall be deemed duly given when sent via email or when sent by certified
mail (return receipt requested) and deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
5.6 Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
5.7 Governing Law; Severability. This Agreement shall be administered,
interpreted and enforced under the laws of the State of Delaware, without regard
to the conflicts of law principles thereof. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
5.8 Conformity to Securities Laws. Participant acknowledges that the Plan
is intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
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5.9 Amendments. This Agreement may not be modified, amended or terminated
except by an instrument in writing, signed by Participant or such other person
as may be permitted to exercise the Option pursuant to Section 4.1 and by a duly
authorized representative of the Company.
5.10 Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth in Section 5.2, this Agreement
shall be binding upon Participant and his or her heirs, executors,
administrators, successors and assigns.
5.13 Notification of Disposition. If this Option is designated as an
Incentive Stock Option, Participant shall give prompt notice to the Company of
any disposition or other transfer of any shares of Stock acquired under this
Agreement if such disposition or transfer is made (a) within two years from the
Grant Date with respect to such shares or (b) within one year after the transfer
of such shares to him. Such notice shall specify the date of such disposition or
other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by Participant in such disposition or other
transfer.
5.14 Limitations Applicable to Section 16 Persons. Notwithstanding any
other provision of the Plan or this Agreement, if Participant is subject to
Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
5.15 Entire Agreement. The Plan and this Agreement (including all Exhibits
hereto) constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and Participant
with respect to the subject matter hereof.
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EXHIBIT B
TO STOCK OPTION GRANT NOTICE
FORM OF EXERCISE NOTICE
Effective as of today, ________________ ___, 20___, the undersigned
("PARTICIPANT") hereby elects to exercise Participant's option to purchase the
number of shares of common stock specified below (the "SHARES") of Loudeye
Corp., a Delaware corporation (the "COMPANY"), under and pursuant to the Loudeye
Corp. 2005 Incentive Award Plan (the "PLAN") and the Stock Option Grant Notice
and Stock Option Agreement dated as of (the "OPTION AGREEMENT"). Capitalized
terms used herein without definition shall have the meanings given in the Plan
and, if not defined in the Plan, the Option Agreement.
GRANT DATE: ______________________________
NUMBER OF SHARES AS TO WHICH OPTION IS EXERCISED: ______________________________
EXERCISE PRICE PER SHARE: $____________
TOTAL EXERCISE PRICE: $____________
CERTIFICATE TO BE ISSUED IN NAME OF: ______________________________
PAYMENT DELIVERED HEREWITH: $______________ (Representing
the full exercise price for
the Shares, as well as any
applicable withholding tax)
Form of Payment: _____________
(Please specify)
TYPE OF OPTION: [ ] Incentive Stock Option [ ] Non-Qualified Stock Option
Participant acknowledges that Participant has received, read and
understood the Plan and the Option Agreement. Participant agrees to abide by and
be bound by their terms and conditions. Participant understands that Participant
may suffer adverse tax consequences as a result of Participant's purchase or
disposition of the Shares. Participant represents that Participant has consulted
with any tax consultants Participant deems advisable in connection with the
purchase or disposition of the Shares and that Participant is not relying on the
Company for any tax advice. The Plan and Option Agreement are incorporated
herein by reference. This Agreement, the Plan and the Option Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with
respect to the subject matter hereof.
ACCEPTED BY: SUBMITTED BY:
LOUDEYE CORP.
By: _______________________________ By: _______________________________
Print Name:________________________ Print Name: _______________________
Title: ____________________________
Address: __________________________
__________________________
