EXHIBIT 4.2
FORM OF OFFICER/DIRECTOR OPTION AGREEMENT AND CERTIFICATE
OPTION AGREEMENT
This OPTION AGREEMENT (the "Agreement") is dated as of April 1, 1999, by
and between INTERNET SPORTS NETWORK, INC. (the "Company"), and
__________________ ("___________").
WHEREAS, the Company proposes to issue to ______________ _______ options
(the "Options"), each such Option entitling the holder thereof to purchase one
share of Common Stock, $.001 par value, of the Company (the "Shares") at an
exercise price of $____ per share.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. OPTION CERTIFICATES. The Option Certificates to be
delivered pursuant to this Agreement (the "Option Certificates") shall be in the
form set forth in EXHIBIT A, attached hereto and made a part hereof. The Option
Certificates shall be executed on behalf of the Company by its Chief Executive
Officer, President, or any Vice President under its corporate seal reproduced
thereon and attested by its corporate secretary or one of its assistant
secretaries. Option Certificates may be exchanged at the Optionholder's option,
when surrendered to the Company for another Option Certificate or other Option
Certificates of like tenor and representing in the aggregate a like number of
Options.
SECTION 2. RIGHT TO EXERCISE OPTIONS. Each Option may be exercised
immediately after each vesting date (hereinafter defined) until 11:59 P.M.
(Pacific Standard time) on the date that is five years after the date of this
Agreement (the "Expiration Date"). Each Option not exercised on or before the
Expiration Date shall expire. Subject to the provisions of this Option
Agreement, including Section 10 hereof, the holder of each Option shall have the
right to purchase from the Company, and the Company shall issue and sell to each
such Optionholder, at an initial exercise price per share of $____, subject to
adjustment as provided herein (the "Exercise Price"), one fully paid and
nonassessable Share upon surrender to the Company of the Option Certificate
evidencing such Option, with the form of election to purchase duly completed and
signed and evidence of payment of the Exercise Price. Payment of the Exercise
Price shall be made by wire transfer or check to the Company. A check for the
option price shall not be considered delivered until good funds are received by
the Company.
Upon surrender of such Option Certificate and payment of the Exercise
Price, the Company shall cause to be issued and delivered promptly to the Option
holder a certificate for the Shares issuable upon the exercise of the Option or
Options evidenced by such Option Certificate. The Options evidenced by an
Option Certificate shall be exercisable at the election of the Option holder
thereof, either as an entirety or from time to time for less than all of the
number of Options specified in the Option Certificate.
SECTION 3. VESTING. Although granted as of the date of this Agreement,
the Options shall vest over the below time period. An initial 50% of the
options shall vest as of December 1, 1999 (the "Vesting Dates"). The remaining
50% options shall vest on June 1, 2000. The vesting of the Options is expressly
conditioned on the holder's employment as an officer or director on the Vesting
Dates. If the holder is not employed as an officer or holds the position of
director on the Vesting Dates, the Options to be vested on that date will not
vest and no future Options are due.
Notwithstanding the above, if the holder is terminated from the officer or
director position because of a change in control of the Company prior to the
Vesting Dates or the Company is purchased, merges with, or reorganizes such that
a change in control occurs, the entire amount of the Options due under this
Agreement shall immediately vest and be exercisable according to the terms
hereof by the holder.
SECTION 4. RESERVATION OF SHARES. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Shares or its authorized and issued Shares held in
its treasury for the purpose of enabling it to satisfy any obligation to issue
Shares upon exercise of Options, the full number of Shares deliverable upon the
exercise of all outstanding Options. The Company
covenants that all Shares which may be issued upon exercise of Options will be
validly issued, fully paid and nonassessable outstanding Shares of the Company.
SECTION 5. REGISTRATION UNDER THE SECURITIES ACT OF 1933. ___________
represents and warrants to the Company that ___________ is acquiring the Options
for investment and with no present intention of distributing or reselling any of
the Options. The Shares and the certificate or certificates evidencing any such
Shares shall bear the following legend:
"THE SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
OPINION OF COUNSEL THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT
IS AVAILABLE."
Certificates for Shares without such legend shall be issued if such shares are
sold pursuant to an effective registration statement under the Act or if the
Company has received an opinion from counsel reasonably satisfactory to counsel
for the Company, that such legend is no longer required under the Act.
Certificates for Options or Shares shall also bear such legends as may be
required from time to time by law.
SECTION 6. REGISTRATION RIGHTS.
A. PIGGYBACK REGISTRATION RIGHTS. If the Company at any time proposes
to register any of its securities under the Act, including an SB-2 Registration
Statement or otherwise, it will each such time give written notice to all
holders of outstanding Shares and Options of its intention so to do. The
Company will use best efforts at the request of ___________, if applicable, to
register the shares underlying these options on a form S-8 registration
statement. Upon the written request of a holder or holders of any such Shares
or Options given within 30 days after receipt of any such notice, the Company
will use its best efforts to cause all such Shares, the holders of which (or of
the Options for which upon exercise thereof the Company will issue Shares) shall
have so requested registration thereof, to be registered under the Act (with the
securities which the Company at the time propose to register), all to the extent
requisite to permit the sale or other disposition by the prospective sellers of
the Shares so registered; provided, however, that the Company may, as a
condition precedent to the effectiveness of such registration, require each
prospective seller to agree with the Company and the managing underwriter or
underwriters of the offering to be made by the Company in connection with such
registration that such seller will not sell any securities of the same class or
convertible into the same class as those registered by the Company (including
any class into which the securities registered by the Company are convertible)
for such reasonable period after such registration becomes effective (not
exceeding 30 days) as shall then be specified in writing by such underwriter or
underwriters if in the opinion of such underwriter or underwriters the Company's
offering would be materially adversely affected in the absence of such an
agreement. All expenses incurred by the Company in complying with this Section,
including without limitation all registration and filing fees, listing fees,
printing expenses, fees and disbursements of all independent accounts, or
counsel for the Company and or counsel for the sellers and the expense of any
special audits incident to or required by any such registration and the expenses
of complying with the securities or blue sky laws of any jurisdiction shall be
paid by the Company. Notwithstanding the foregoing, sellers shall pay all
underwriting discounts or commissions with respect to shares sold by the
sellers. Notwithstanding the above, the Company shall not be obligated to
register the securities underlying the option more often than every 120 days in
the case of an S-8 or every 365 days in the case of any other type of
registration statement.
B. INDEMNIFICATION.
(i) In the event of any registration of any of its Shares under the
Act pursuant to this Section, the Company hereby indemnifies and holds harmless
the sellers of such Shares (which phrase shall include any underwriters of such
Shares), their respective directors and officers, and each other person who
participates, in the offering of such Shares and each other person, if any, who
controls such sellers, or such participating persons within the meaning of the
Act, against any losses, claims, damages or liabilities, joint or several, to
which each such seller or any such director or officer or participating person
or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such Shares were registered under the
Act, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based upon any omission
or alleged omission to state therein an material fact required to be stated
therein or necessary to make the statements therein not misleading; and will
reimburse each such Seller and each director, officer or participating or
controlling person for any legal or any other expenses reasonably incurred by
such Seller or such director, officer or participating or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, preliminary
prospectus or prospectus or amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such Seller specifically stating that it is for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Seller or such directors, officer or
participating or controlling person, and shall survive the transfer of such
Shares by such Seller.
(ii) Each holder of any Shares or Options shall by acceptance thereof
indemnify and hold harmless the Company and its directors and officers, and each
person, if any who controls the Company, against any losses, claims, damages or
liabilities, joint or several, to which the Company or any director or officer
or any such person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained, on the effective date thereof, in any
registration statement under which Shares were registered under the Act at the
request of such holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus, prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company through an instrument duly executed by or on behalf of such
holder specifically stating that it is for use therein; and will reimburse the
Company or such director, officer or person for any legal or any other expense
reasonably incurred in connection with investigation or defending any such loss,
claim, damage, liability or action.
C. RULE 144. If the Company shall be subject to the reporting
requirements of Section 13 of the 1934 Act, the Company will use its best
efforts timely to file all reports required to be filed from time to time with
the Commission (including but not limited to the reports under Section 13 and
15(d) of the 1934 Act referred to in subparagraph (c)(1) of Rule 144 adopted by
the Commission under the Act). If there is a public market for any Shares of
the Company at any time that the Company is not subject to the reporting
requirements of either of said Section 13 or 15(d), the Company will, upon the
request of any holder of any Shares or Options, use its best efforts to make
publicly available the information concerning the Company referred to in
subparagraph (c)(2) of said Rule 144. The Company will furnish to each holder
of any shares or Options, promptly upon request, (i) a written statement of the
Company's compliance with the requirements of subparagraphs (c)(1) or (c)(2), as
the case may be, of said Rule 144, and (ii) written information concerning the
Company sufficient to enable such holder to complete any Form 144 required to be
filed with the Commission pursuant to said Rule 144.
SECTION 7. NOTICES TO COMPANY AND _______. Any notice or demand
authorized by this Agreement to be given or made by any registered holder of any
Option Certificate to or on the Company shall be sufficiently give or made if
sent by registered mail, postage prepaid, addressed (until another address is
filed in writing by the Company with the holders) to the Company as in the
address set forth in the execution block of this Agreement.
SECTION 8. SUPPLEMENTS AND AMENDMENTS. The Company and ___________ may
from time to time supplement or amend this Agreement without the approval of any
Optionholders (other than ___________) in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or
inconsistent with any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and
___________ may deem necessary or desirable and which the Company and
___________ deem shall not adversely affect the interests of the Optionholders.
SECTION 9. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or ___________ shall bind and
inure to the benefit of their respective successors and assigns hereunder.
SECTION 10. GOVERNING LAW. This Agreement and each Option Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of California and for all proposes shall be governed by and construed in
accordance with the laws of said State.
SECTION 11. COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. The Parties
agree that facsimile signatures of this Agreement shall be deemed a valid and
binding execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.
INTERNET SPORTS NETWORK, INC.
By: By:
------------------------------- --------------------------------
Xxx Xxxxx
Its: Chief Executive Officer
Address:
00 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
OPTION CERTIFICATE
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR
OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE OPTIONS, SHARES OR OTHER SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
EXERCISABLE FROM 12:00 P.M. PACIFIC STANDARD TIME,
ON APRIL 1, 1999 UNTIL
11:59 P.M., PACIFIC STANDARD TIME ON MARCH 31, 2004
No. ___ _______ Options
OPTION CERTIFICATE
INTERNET SPORTS NETWORK, INC.
This Option Certificate certifies that __________________ ("___________")
or registered assigns, is the registered holder of _______ Options (the
"Options") expiring March 31, 2004 (the "Expiration Date"), to purchase shares
of Common Stock (the "Shares") of INTERNET SPORTS NETWORK, INC., a Florida
corporation (the "Company"). Each Option entitles the holder to purchase from
the Company before 11:59 p.m. (Pacific Standard time) on the "Expiration Date"
one fully paid and nonassessable share of Common Stock of the Company at the
initial exercise price for each Option of $____ per share (the "Exercise
Price"), upon surrender of this Option Certificate and payment of the Exercise
Price at an office or agency of the Company, but only subject to the terms and
conditions set forth herein and in the Option Agreement. Payment of the
Exercise Price may be permitted by check or wire transfer. Payment shall be
deemed accepted only upon the receipt of good funds by the Company. As used
herein, "Share" or "Shares" refers to the Common Stock of the Company. In the
event that upon any exercise of Options evidenced hereby, the number of Options
exercised shall be less than the total number of Options evidence hereby, there
shall be issued to the holder hereof or his or her assignee a new Option
Certificate evidencing the number of Options not exercised. No adjustment shall
be made for any cash dividends on any Shares issuable upon exercise of this
Option.
No Option may be exercised after 11:59 P.M. (Pacific Standard Time) on the
Expiration Date. All Options evidenced hereby shall thereafter be void.
The Options evidenced by this Option Certificate are part of a duly
authorized issue of Options issued pursuant to an Option Agreement, dated
effective as of April 1, 1999 (the "Option Agreement"), duly executed by the
Company and ___________ which Option Agreement is hereby incorporated by
reference in and made a part of this instruments and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder of the Option
Certificates of Shares).
The Company may deem and treat the person(s) registered in the Company's
register as the absolute owner(s) of this Option Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, and of any distribution to the holder(s) hereof,
and for all purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Option Certificate which are defined in the Option
Agreement shall have the meaning assigned to them in the Option Agreement.
THE OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON STOCK (OR
OTHER SECURITIES) ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER
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THE SECURITIES ACT OF 1933. THE OPTIONS, SHARES OR OTHER SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
IN WITNESS WHEREOF, the Company has caused this Option Certificate to be
duly executed under its corporate seal.
Dated: April 1, 1999 INTERNET SPORTS NETWORK, INC.
By:____________________________
Its: President
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ELECTION TO PURCHASE
(To be executed upon exercise of Option)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Option Certificate, to purchase ______ Shares and herewith
authorizes payment for such Shares in the amount of $_____ all in accordance
with the terms hereof. The undersigned requests that certificates for such
Shares be registered as follows:
Name Number of Shares
------ ------------------
all of whose addresses are ____________________________________________________,
and that such certificates be delivered to _______________________ whose address
is _________________________________________________________________. If said
number of Shares is less than all of the Shares purchasable hereunder, the
undersigned requests that a new Option Certificate representing the remaining
balance of the Shares be registered in the name of __________________, whose
address is ____________________________________________________ and that such
Certificates be delivered to the attention of ___________________ at the above
address.
Dated:____________________ By:____________________________________
Its:___________________________________
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