TWISTBOX ENTERTAINMENT, INC. NON-QUALIFIED STOCK OPTION AGREEMENT PURSUANT TO THE TWISTBOX ENTERTAINMENT, INC. 2006 STOCK INCENTIVE PLAN
TWISTBOX
ENTERTAINMENT, INC.
PURSUANT
TO THE
TWISTBOX
ENTERTAINMENT, INC. 2006 STOCK INCENTIVE PLAN
This
Non-Qualified Stock Option AGREEMENT (“Agreement”),
dated
as of ________ (the “Grant
Date”)
by and
between Twistbox Entertainment, Inc., a California corporation (the
“Company”)
and
«Name»
(the
“Participant”).
Preliminary
Statement
The
Committee has authorized this grant of a non-qualified stock option (the
“Option”)
on
________ to purchase the number of shares of the Company’s common stock (the
“Common
Stock”)
set
forth below to the Participant, as an Eligible Employee of the Company or a
Subsidiary (collectively, the Company and all Subsidiaries of the Company shall
be referred to as the “Employer”).
Unless otherwise indicated, any capitalized term used but not defined herein
shall have the meaning ascribed to such term in the Twistbox Entertainment,
Inc.
2006 Stock Incentive Plan (the “Plan”).
A
copy of the Plan has been delivered to the Participant. By signing and returning
this Agreement, the Participant acknowledges having received and read a copy
of
the Plan and agrees to comply with it, this Agreement and all applicable laws
and regulations.
Accordingly,
the parties hereto agree as follows:
1. Tax
Matters.
No part
of the Option granted hereby is intended to qualify as an “incentive stock
option” under Section 422 of the Internal Revenue Code of 1986, as
amended.
2. Grant
of Option.
Subject
in all respects to the Plan and the terms and conditions set forth herein and
therein, the Participant is hereby granted an Option to purchase from the
Company «shares»
shares
of Common Stock, at a price per share of $__ (the “Option
Price”).
3. Exercise.
(a) Except
as
set forth in subsection (b) below, the Option shall vest and become exercisable
as provided below, which shall be cumulative. To the extent that the Option
has
become exercisable with respect to a number of shares of Common Stock as
provided below, the Option may thereafter be exercised by the Participant,
in
whole or in part, at any time or from time to time prior to the expiration
of
the Option as provided herein and in accordance with Section 6.3(d) of the
Plan,
including, without limitation, the filing of such written form of exercise
notice, if any, as may be required by the Committee and payment in full of
the
Option Price multiplied by the number of shares of Common Stock underlying
the
portion of the Option exercised. Upon expiration of the Option, the Option
shall
be canceled and no longer exercisable. Exhibit A (Vesting Schedule) indicates
each date upon which the Participant shall be vested and entitled to exercise
the Option with respect to the percentage indicated beside that date provided
that the Participant has not suffered a Termination of Employment prior to
the
applicable vesting date.
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.
(b) Upon
the
occurrence of an IPO or Change in Control, the Option shall immediately become
exercisable with respect to all shares of Common Stock subject
thereto.
(c) Notwithstanding
the foregoing, the Participant may not exercise the Option unless the shares
of
Common Stock issuable upon such exercise are then registered under the
Securities Act, or, if such shares of Common Stock are not then so registered,
the Company has determined that such exercise and issuance would be exempt
from
the registration requirements of the Securities Act. The exercise of the Option
must also comply with other applicable laws and regulations governing the
Option, and the Participant may not exercise the Option if the Company
determines that such exercise would not be in material compliance with such
laws
and regulations. In addition, the Participant may not exercise the Option if
the
terms of the Plan do not permit the exercise of Options at such time.
4. Option
Term.
The
term of each Option shall be until the tenth (10th)
anniversary of the Grant Date, after which time it shall terminate, subject
to
earlier termination in the event of the Participant’s Termination of Employment
as specified in Section 5 below.
5. Termination
of Employment.
(a) Subject
to the terms of the Plan and this Agreement, the Option, to the extent vested
at
the time of the Participant’s Termination of Employment, shall remain
exercisable as provided in Section 9.2(a) of the Plan.
(b) Any
portion of the Option that is not vested as of the date of the Participant’s
Termination of Employment for any reason shall terminate and expire as of the
date of such Termination of Employment.
(c) If
the
Participant breaches any agreement with the Company or any of its Subsidiaries
regarding competition, confidentiality or the solicitation of customers or
employees, the Option (whether vested or unvested) and shares of Common Stock
acquired upon exercise of the Option (without compensation other than repayment
of the Option Price) shall be immediately forfeited to the Company unless the
Participant cures such breach (if curable) within 15 days of being notified
of
such breach.
6. Restriction
on Transfer of Option.
No part
of the Option shall be Transferable other than by will or by the laws of descent
and distribution and during the lifetime of the Participant, may be exercised
only by the Participant or the Participant’s guardian or legal representative.
In addition, the Option shall not be assigned, negotiated, pledged or
hypothecated in any way (except as provided by law or herein), and the Option
shall not be subject to execution, attachment or similar process. Upon any
attempt to Transfer 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.
2
7. Company
Call Rights; Restrictions on Transfer.
The
Option, and any shares of Common Stock that the Participant acquires upon
exercise of the Option, shall be subject to the Company call rights and
restrictions on transfer (including the Company’s right of first refusal) set
forth in Article XIII of the Plan. To ensure that the shares of Common Stock
issuable upon exercise of the Option are not transferred in contravention of
the
terms of the Plan and this Agreement, and to ensure compliance with other
provisions of the Plan and this Agreement, the Company may deposit the
certificates evidencing the shares of Common Stock to be issued upon the
exercise of the Option with an escrow agent designated by the
Company.
8. Securities
Representations.
Upon the
exercise of the Option prior to the registration of the Common Stock subject
to
the Option pursuant to the Securities Act or other applicable securities laws,
the Participant shall be deemed to acknowledge and make the representations
and
warranties as described below and as otherwise may be requested by the Company
for compliance with applicable laws, and any issuances of Common Stock by the
Company shall be made in reliance upon the express representations and
warranties of the Participant.
(a) The
Participant is acquiring and will hold the shares of Common Stock for investment
for his account only and not with a view to, or for resale in connection with,
any “distribution” thereof within the meaning of the Securities Act or other
applicable securities laws.
(b) The
Participant has been advised that the shares of Common Stock have not been
registered under the Securities Act or other applicable securities laws, on
the
ground that no distribution or public offering of the shares of Common Stock
is
to be effected (it being understood, however, that the shares of Common Stock
are being issued and sold in reliance on the exemption provided under Rule
701
under the Securities Act), and that the shares of Common Stock must be held
indefinitely, unless they are subsequently registered under the applicable
securities laws or the Participant obtains an opinion of counsel (in the form
and substance satisfactory to the Company and its counsel) that registration
is
not required. In connection with the foregoing, the Company is relying in part
on the Participant’s representations set forth in this Section. The Participant
further acknowledges and understands that the Company is under no obligation
hereunder to register the shares of Common Stock.
(c) The
Participant is aware of the adoption of Rule 144 by the Securities and Exchange
Commission under the Securities Act, which permits limited public resale of
securities acquired in a non-public offering, subject to the satisfaction of
certain conditions. The Participant acknowledges that he is familiar with the
conditions for resale set forth in Rule 144, and acknowledges and understands
that the conditions for resale set forth in Rule 144 have not been satisfied
and
that the Company has no plans to satisfy these conditions in the foreseeable
future.
(d) The
Participant will not sell, transfer or otherwise dispose of the shares of Common
Stock in violation of the Plan, this Agreement, Securities Act (or the rules
and
regulations promulgated thereunder) or under any other applicable securities
laws. The Participant agrees that he will not dispose of the Common Stock unless
and until he has complied with all requirements of this Agreement applicable
to
the disposition of the shares of Common Stock.
3
(e) The
Participant has been furnished with, and has had access to, such information
as
he considers necessary or appropriate for deciding whether to invest in the
shares of Common Stock, and the Participant has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the issuance of the Common Stock.
(f) The
Participant is aware that his investment in the Company is a speculative
investment that has limited liquidity and is subject to the risk of complete
loss. The Participant is able, without impairing his financial condition, to
hold the Shares for an indefinite period and to suffer a complete loss of his
investment in the Common Stock.
9. Rights
as a Stockholder.
The
Participant shall have no rights as a stockholder with respect to any shares
covered by the Option unless and until the Participant has become the holder
of
record of the shares, and no adjustments shall be made for dividends in cash
or
other property, distributions or other rights in respect of any such shares,
except as otherwise specifically provided for in the Plan.
10. 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 as may be adopted
by
the Committee and as may be in effect from time to time. The Plan is
incorporated herein by reference. 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 contains the entire understanding of the parties
with respect to the subject matter hereof (other than any exercise notice or
other documents expressly contemplated herein or in the Plan) and supersedes
any
prior agreements between the Company and the Participant with respect to the
subject matter hereof.
11. Notices.
Any
notice or communication given hereunder shall be in writing and shall be deemed
to have been duly given: (i) when delivered in person; (ii) two (2) days after
being sent by United States mail; or (iii) on the first business day following
the date of deposit if delivered by a nationally recognized overnight delivery
service, to the appropriate party at the address set forth below (or such other
address as the party shall from time to time specify):
If
to the
Company, to:
Twistbox
Entertainment, Inc.
00000
Xxxxxxx Xxxxxxxxx, 0xx
Floor
Xxxxxxx
Oaks, California 91423
Attention:
Plan Administrator
If
to the
Participant, to the address on file with the Company.
4
12. No
Obligation to Continue Employment.
This
Agreement is not an agreement of employment. This Agreement does not guarantee
that the Employer will employ the Participant for any specific time period,
nor
does it modify in any respect the Employer’s right to terminate or modify the
Participant’s employment or compensation.
13. Agreement.
As a
condition to the receipt of shares of Common Stock when the Option is exercised,
the Participant shall execute and deliver an Assumption Agreement, and to the
extent required by the Committee, the Participant shall execute and deliver
a
stockholder’s agreement or such other documentation which shall set forth
certain restrictions on transferability of the shares of Common Stock acquired
and such other terms or restrictions as the Committee shall from time to time
establish. Such Assumption Agreement, stockholder’s agreement or other
documentation shall apply to the Common Stock acquired under the Plan and
covered by such Assumption Agreement, stockholder’s agreement or other
documentation. The Company may require, as a condition of exercise, the
Participant to become a party to any other existing stockholder agreement or
other agreement.
14. 409A. NOTWITHSTANDING
ANYTHING HEREIN OR IN THE PLAN TO THE CONTRARY, IF THE COMMON STOCK DOES NOT
CONSTITUTE “SERVICE RECIPIENT STOCK” FOR PURPOSES OF SECTION 409A OF THE CODE OR
IF THE OPTION OTHERWISE IS DEEMED TO BE DEFERRED COMPENSATION UNDER SECTION
409A
OF THE CODE AS A RESULT OF ANY PROPOSED, TEMPORARY OR FINAL REGULATIONS OR
ANY
OTHER GUIDANCE ISSUED BY THE SECRETARY OF THE TREASURY AND THE INTERNAL REVENUE
SERVICE WITH RESPECT TO SECTION 409A OF THE CODE, THE COMPANY SHALL BE PERMITTED
TO AMEND THE PLAN AND THE OPTION TO COMPLY WITH SECTION 409A WITHOUT THE
PARTICIPANT’S CONSENT. THE COMPANY SHALL HAVE NO LIABILITY TO THE PARTICIPANT OR
OTHERWISE IF THE OPTION AND ANY AMOUNTS PAID OR PAYABLE THEREUNDER IS SUBJECT
TO
SECTION 409A OF THE CODE.
[Remainder
of Page Left Intentionally Blank]
[Signature
Page Follows]
5
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date and year
first above written.
|
TWISTBOX
ENTERTAINMENT, INC.
By:
 Authorized
Officer
|
«Name»
Employee
[ID
or
Social Security]
number:
I,
_____________________, the spouse of the Participant, do hereby join with my
spouse in executing this Agreement and do hereby agree to be bound by all of
the
terms and provisions thereof.
_________________________
Signature
6
