FORM B OF
NQSO GRANT
WORLDGATE COMMUNICATIONS,
INC.
2003 EQUITY INCENTIVE
PLAN
NONSTATUTORY STOCK OPTION
GRANT
This NONSTATUTORY STOCK OPTION GRANT AGREEMENT
(the “ Agreement ”), dated as of May ___, 2009
(the “ Date of Grant ”), is delivered by
WorldGate Communications, Inc. (the “ Company ”)
to _______________ (the “ Participant
”).
RECITALS
WHEREAS, the Company maintains the WorldGate
Communications, Inc. 2003 Equity Incentive Plan (the “
Plan ”) for the benefit of its and its Participating
Company’s (as defined in the Plan) employees, non-employee
directors, and consultants;
WHEREAS, the Board of Directors of the Company
(the “ Board ”) has determined to amend the Plan
to increase the number of shares of common stock of the Company
authorized for issuance under the Plan and has approved an
amendment to the Plan to increase the shares authorized for
issuance thereunder, subject to the approval of the Company’s
stockholders;
WHEREAS, for purposes of this nonstatutory stock
option grant, only those Committee (as defined in the Plan) members
who are “outside directors” as defined in Treas. Reg.
Section 1.162-27(e)(3) and “non-employee directors” as
defined in Rule 16(b)-3 of the Securities and Exchange Act of 1934,
as amended (the “ Outside Directors ”), have
approved this grant;
WHEREAS, the Outside Directors have determined
to grant the Participant a nonstatutory stock option under the
Plan;
WHEREAS, the Committee desires that the
Participant execute a [
Non-Compete/Non-Solicitation/Confidentiality/Invention
Assignment Agreement ] (the “ Restrictive Covenant
Agreement ”) as a condition to making this nonstatutory
stock option grant to the Participant, and the Participant has
agreed to execute the Restrictive Covenant Agreement, attached
hereto as Exhibit A .
NOW, THEREFORE, the parties to this Agreement,
intending to be legally bound hereby, agree as follows:
1.
Grant of Option . Subject to the terms and
conditions set forth in this Agreement and in the Plan, the Company
hereby grants to the Participant a nonstatutory stock option (the
“ Option ”) to purchase ___________ shares of
Stock (as defined in the Plan), at an exercise price of $_________
per share of Stock. Notwithstanding anything herein to
the contrary, this Agreement shall be null, void and without effect
if the Company’s stockholders do not approve the amendment to
the Plan that increases the number of shares authorized for
issuance thereunder within twelve (12) months from the Date of
Grant.
2.
Exercisability of Option . The Option shall
become exercisable on the following dates, if the Participant
continues to provide Service (as defined in the Plan) to an
employer within the Participating Company Group (as defined in the
Plan) from the Date of Grant through the applicable
date:
|
Date
|
|
Shares for Which the Option is Exercisable
|
|
|
|
|
|
|
|
First
anniversary of the Date of Grant
|
|
|
25
|
%
|
|
|
|
|
|
|
|
Second
anniversary of the Date of Grant
|
|
|
25
|
%
|
|
|
|
|
|
|
|
Third
anniversary of the Date of Grant
|
|
|
25
|
%
|
|
|
|
|
|
|
|
Fourth
anniversary of the Date of Grant
|
|
|
25
|
%
|
The
exercisability of the Option is cumulative, but shall not exceed
100% of the shares of Stock subject to the Option. If
the foregoing schedule would produce fractional shares of Stock,
the number of shares of Stock for which the Option becomes
exercisable shall be rounded down to the nearest whole share of
Stock. The Option shall become fully exercisable on the
fourth anniversary of the Date of Grant, provided that the
Participant is providing Service to the Participating Company Group
on such date. Notwithstanding anything herein to the
contrary, no portion of the Option may be exercised prior to the
date on which the Company’s stockholders approve the increase
in the shares of Stock authorized for issuance under the
Plan
3.
Term of Option .
(a) The
Option shall have a term of ten (10) years from the Date of Grant,
and shall terminate at the expiration of that period, unless it is
terminated at an earlier date pursuant to the provisions of this
Agreement or the Plan.
(b) The
Option shall automatically terminate upon the happening of the
first of the following events:
(i) If
the Participant’s Service with the Participating Company
Group terminates on account of death or Disability (as defined in
the Plan), the expiration of the one-year period following the date
of the Participant’s termination of Service on account of
death or Disability.
(ii) If
the Participant’s Service with the Participating Company
Group terminates for any reason other than on account of death,
Disability, voluntary termination by the Participant without the
consent of the applicable Participating Company, or termination for
cause (as defined in the Plan), the expiration of the three-month
period following the date of the Participant’s termination of
Service for any reason other than on account of death, Disability,
voluntary termination by the Participant without the consent of the
applicable Participating Company, or termination for
cause.
(iii) The
date on which the Participant ceases to provide Service to the
Participating Company Group due to a termination for cause or due
to a voluntary separation from the applicable Participating Company
without the consent of the Participating Company.
Notwithstanding
the foregoing, in no event may the Option be exercised after the
tenth anniversary of the Date of Grant. Any portion of
the Option that is not exercisable at the time the Participant
ceases to provide Service to the Participating Company Group shall
immediately terminate as of such date.
4.
Restrictive Covenant Agreement . In consideration
for this grant of the Option, the Participant agrees to execute and
to be bound by the terms and conditions of the Restrictive Covenant
Agreement, attached hereto as Exhibit A. If the
Participant breaches the terms and conditions of the Restrictive
Covenant Agreement, this Agreeme
