FORM OF ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement (the "Option
Agreement") by and between [General Internet Inc. / XxxxxxXx.xxx, Inc.] (the
"Corporation") and ______________________ ("Optionee") evidencing the stock
option (the "Option") granted on _______________________, 199__ to Optionee
under the terms of the Corporation's 1998 Stock Option/Stock Issuance Plan, and
such provisions shall be effective immediately. All capitalized terms in this
Addendum, to the extent not otherwise defined herein, shall have the meanings
assigned to them in the Option Agreement.
TERMINATION OF SERVICE
FOLLOWING CHANGE IN CONTROL
1. To the extent the Option does not accelerate, in connection with
a Change in Control, the Option shall continue, over Optionee's period of
Service after the Change in Control, to become exercisable for the Option Shares
in one or more installments in accordance with the provisions of the Option
Agreement. However, immediately upon an Involuntary Termination of Optionee's
Service within twelve (12) months following such Change in Control, the Option
(or any replacement grant), to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that the Option
shall become immediately exercisable for all the Option Shares at the time
subject to the Option and may be exercised for any or all of those shares as
fully vested shares of Common Stock.
2. The Option as accelerated under Paragraph 1 shall remain so
exercisable until the earlier of (i) the Expiration Date or (ii) the expiration
of the one (1)-year period measured from the effective date of Optionee's
Involuntary Termination.
3. Involuntary Termination shall mean the termination of Optionee's
Service which occurs by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change
in Optionee's position with the Corporation (or Parent or Subsidiary
employing Optionee) which materially reduces Optionee's duties and
responsibilities, (B) a reduction in Optionee's level of
compensation (including base salary, fringe benefits and target
bonus under any performance based bonus or incentive programs), or
(C) a relocation of Optionee's place of employment by more than
fifty (50) miles, provided and only if such change, reduction or
relocation is effected without Optionee's consent. Notwithstanding
the foregoing, Optionee's voluntary resignation following (I) a
relocation shall not be considered an
1.
Involuntary Termination if the relocation is part of a general
relocation of a significant portion of the operations of the
Corporation (or Parent or Subsidiary employing Optionee) or of the
department or division in which Optionee is employed to a location
in the United States and if expenses reasonably incurred by Optionee
in connection with such relocation are to be reimbursed by the
Corporation or any successor entity or (II) a general reduction in
the level of base salary, target bonuses or fringe benefits which is
applied to all or substantially all of the employees of the
Corporation (or Parent or Subsidiary employing Optionee) in
connection with a cost reduction program shall not constitute an
Involuntary Termination. A resignation that does not constitute an
Involuntary Termination under clause (I) shall be referred to as the
"Group Relocation".
4. The provisions of Paragraph 2 of this Addendum shall govern the
period for which the Option is to remain exercisable following the Involuntary
Termination of Optionee's Service within twelve (12) months after the Change in
Control and shall supersede any provisions to the contrary in Paragraph 5 of the
Option Agreement.
5. In the event of Optionee's voluntary resignation during the
twelve (12)-month period following a Change in Control due to a Group
Relocation, then to the extent the resignation occurs during the period when the
Option is exercisable in annual installments, the Option shall, immediately
prior to such resignation, become exercisable for an additional number of Option
Shares determined by multiplying (i) the number of Option Shares for which the
Option is to become exercisable on the next annual exercise date by (ii) the
lesser of (A) 1 or (B) the fraction obtained by dividing the number of months
elapsed from the effective date of the Change in Control by 12.
ACCELERATION UPON
HOSTILE TAKE-OVER
6. Immediately prior to the effective date of a Hostile Take-Over,
the Option, to the extent outstanding at the time but not otherwise fully
exercisable, shall substantially accelerate so that the Option shall become
exercisable for all the Option Shares at the time subject to the Option and may
be exercised for any or all of those shares as fully-vested shares of Common
Stock. The Option, as so accelerated, shall remain exercisable until the
Expiration Date or sooner termination of the option term as provided in the
Option Agreement.
7. A Hostile Take-Over shall mean:
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 0000 Xxx) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a
2.
tender or exchange offer made directly to the Corporation's stockholders
which the Board does not recommend such stockholders to accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
8. The portion of any Incentive Option accelerated in connection
with a Change in Control or Hostile Take Over shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws. shall automatically accelerate
so that the Option shall become immediately exercisable for all the Option
Shares at the time subject to the Option and may be exercised for any or all of
those shares as fully vested shares of Common Stock.
3.
