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COMMUNICATE.COM, INC.
Incentive Stock Option Agreement
Granted under the 2007 Stock Incentive Plan
1.
Grant of Option .
This agreement evidences the grant by Communicate.com, Inc., a
Nevada corporation (the “Company”), effective on
September 8, 2007 (the “Grant Date”) to Jonathan
Ehrlich, an employee of the Company (the
“Participant”), of an option to purchase, in whole or
in part, on the terms set forth herein and in the Company’s
2007 Stock Incentive Plan (the “Plan”) and the
employee’s Employment Agreement dated September 8, 2007 (the
“Employment Agreement”), a total of 1,500,000 shares
(the “Shares”) of common stock, $0.001 par value per
share, of the Company (“Common Stock”) at a price per
share equal to the market closing price of the Common Stock on the
Grant Date. Unless earlier terminated, this option shall
expire at 5:00 p.m., Pacific time, on the date that is the fifth
anniversary of October 1, 2007 (the “Final Exercise
Date”).
It is intended that the option evidenced by this agreement shall be
an incentive stock option as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the “Code”). Should the grant for any
reason not be or become eligible to be treated as an incentive
stock option under U.S. or Canadian law, it shall be deemed a
non-qualified stock option under U.S. or Canadian law. Except
as otherwise indicated by the context, the term
“Participant”, as used in this option, shall be deemed
to include any person who acquires the right to exercise this
option validly under its terms.
2.
Vesting Schedule .
This option will become exercisable (“vest”) as to (i)
500,000 Shares on the first anniversary of the Effective Date of
his Employment (October 1, 2007) and (ii) an additional 125,000
Shares on the last day of each successive three-month period
thereafter, until all such Shares have vested.
The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent
permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the
earlier of the Final Exercise Date or the termination of this
option hereunder or under the Plan.
3.
Exercise of Option .
(a)
Form of Exercise . Each election to exercise this
option shall be in writing, signed by the Participant, and received
by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan.
The Participant may purchase less than the number of shares
covered hereby, provided that no partial exercise of this option
may be for any fractional share or for fewer than one hundred whole
shares.
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(b)
Continuous Relationship with the Company Required .
Except as otherwise provided in this Section 3, this
option may not be exercised unless the Participant, at the time he
or she exercises this option, is, and has been at all times since
the Grant Date, an employee or officer of, or consultant or advisor
to, the Company or any parent or subsidiary of the Company as
defined in Section 424(e) or (f) of the Code (an “Eligible
Participant”).
(c)
Termination of Relationship with the Company . If the
Participant ceases to be an Eligible Participant for any reason,
then, except as provided in paragraph (d) below, the right to
exercise this option shall terminate three months after such
cessation (but in no event after the Final Exercise Date),
provided that this option shall be exercisable only
to the extent that the Participant was entitled to exercise this
option on the date of such cessation; provided that
if the Participant is terminated by the Company without Just Cause
(as set forth in the Employment Agreement), then this option shall
be fully exercisable. Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the
provisions of any employment contract, or is terminated for Just
Cause, violates any confidentiality and nondisclosure agreement or
other agreement between the Participant and the Company, the right
to exercise this option shall terminate immediately upon written
notice to the Participant from the Company describing such
violation; provided this option shall terminate immediately
without notice upon a discharge for Just Cause.
(d)
Exercise Period Upon Death or Disability . If the
Participant dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not
terminated such relationship for “Just Cause” as
specified in paragraph (c) above, this option shall be fully
exercisable, within the period of six months following the
date of death or disability of the Participant, by the Participant
(or in the case of death by an authorized transferee),
provided that this option shall not be exercisable
after the Final Exercise Date.
4.
Company Right of First Refusal .
(a)
Notice of Proposed Transfer . If the Participant
proposes to sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise
(collectively, “transfer”) any Shares acquired upon
exercise of this option, then the Participant shall first give
written notice of the proposed transfer (the “Transfer N
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