NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SHARES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE. NEITHER THE
SECURITIES REPRESENTED HEREBY MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED NOR MAY THE SHARES BE ISSUED UPON EXERCISE UNLESS SUCH SECURITIES AND
SHARES ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR THE COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH SALE, TRANSFER, PLEDGE OR ISSUANCE IS EXEMPT FROM REGISTRATION.
ROO GROUP, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement") is made as of
this 12th day of April, 2004 by and between ROO Group, Inc., a Delaware
corporation (the "Company"), and Robin Smyth ("Optionee").
R E C I T A L
Pursuant to the 2004 Stock Option Plan (the "Plan") of the Company, the
Board of Directors of the Company or a committee to which administration of the
Plan is delegated by the Board of Directors (in either case, the
"Administrator") has authorized the granting to Optionee of an incentive stock
option to purchase the number of Shares of the Company specified in Paragraph 1
hereof, at the price specified therein, such option to be for the term and upon
the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the
undertakings of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the
Administrator, the Company hereby grants to Optionee the option ("Option") to
purchase, upon and subject to the terms and conditions of the Plan, up to
3,000,000 shares of common stock (the "Shares") of the Company at a price of
$.1265 per share.
2. TERM. This Option shall expire on May 8, 2006 (the "Expiration
Date"), unless such Option shall have been terminated prior to that date in
accordance with the provisions of the Plan or this Agreement. The term
"Affiliate" as used herein shall have the meaning as set forth in the Plan.
3. SHARES SUBJECT TO EXERCISE. Shares subject to exercise shall be 100%
of such Shares on and after May 8, 2004.
4. CONDITIONS TO EXERCISE. In order for the Optionee to exercise the
Option, in whole or in part, the Optionee shall not have ceased to be employed
as a senior executive officer of the Company, prior to May 8, 2006, unless such
termination of employment shall be by reason of the death or permanent
disability of the Optionee, or shall otherwise have been approved by the Board
of Directors of the Company (the Optionee abstaining in any such vote).
5. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company at its principal executive office stating the
number of Shares with respect to which the Option is being exercised, together
with:
(A) a check or money order made payable to the Company in the
amount of the exercise price and any withholding tax, as provided under
Paragraph 5 hereof; or
(B) if expressly authorized in writing by the Administrator,
in its sole discretion, at the time of the Option exercise, the tender to the
Company of Shares owned by Optionee having a fair market value, as determined by
the Administrator, not less than the exercise price, plus the amount of
applicable federal, state and local withholding taxes.
Not less than 100 shares may be purchased at any one time unless the
number purchased is the total number purchasable under such Option at the time.
Only whole shares may be purchased.
6. TAX WITHHOLDING. In the event that this Option shall lose its
qualification as an incentive stock option, as a condition to exercise of this
Option, the Company may require Optionee to pay over to the Company all
applicable federal, state and local taxes which the Company is required to
withhold with respect to the exercise of this Option. At the discretion of the
Administrator and upon the request of Optionee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of Shares of
the Company otherwise issuable to Optionee upon the exercise of this Option.
7. EXERCISE ON TERMINATION OF EMPLOYMENT. If for any reason other than
death or permanent and total disability, Optionee ceases to be employed by the
Company or any of its Affiliates (such event being called a "Termination"), this
Option (to the extent then exercisable) may be exercised in whole or in part at
any time within three months of the date of such Termination, but in no event
after the Expiration Date; provided, however, that if such exercise of this
Option would result in liability for Optionee under Section 16(b) of the
Securities Exchange Act of 1934, then such three-month period automatically
shall be extended until the tenth day following the last date upon which
Optionee has any liability under Section 16(b), but in no event after the
Expiration Date. If Optionee dies or becomes permanently and totally disabled
(as defined in the Plan) while employed by the Company or an Affiliate or within
the period that this Option remains exercisable after Termination, this Option
(to the extent then exercisable) may be exercised, in whole or in part, by
Optionee, by Optionee's personal representative or by the person to whom this
Option is transferred by devise or the laws of descent and distribution, at any
time within twelve months after the death or twelve months after the permanent
and total disability of Optionee, but in no event after the Expiration Date. In
the event this Option is treated as a non-qualified stock option, then and to
that extent, "employment" would include service as a director or as a
consultant. For purposes of this Paragraph 6, Optionee's employment shall not be
deemed to terminate by reason of sick leave, military leave or other leave of
absence approved by the Administrator, if the period of any such leave does not
exceed 90 days or, if longer, if Optionee's right to reemployment by the Company
or any Affiliate is guaranteed either contractually or by statute.
8. NONTRANSFERABILITY. This Option may not be assigned or transferred
except by will, qualified domestic relations order or by the laws of descent and
distribution, and may be exercised only by Optionee during his lifetime and
after his death, by his personal representative or by the person entitled
thereto under his will or the laws of intestate succession.
9. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Shares of the Company covered by this Option
until the date of issuance of a stock certificate or stock certificates to him
upon exercise of this Option. No adjustment will be made for dividends or other
rights for which the record date is prior to the date such stock certificate or
certificates are issued.
10. NO RIGHT TO EMPLOYMENT. Nothing in the Option granted hereby shall
interfere with or limit in any way the right of the Company or of any of its
Affiliates to terminate Optionee's employment or consulting at any time, nor
confer upon Optionee any right to continue in the employ of, or consult with,
the Company or any of its Affiliates.
11. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 6.1 and
6.3 of the Plan.
12. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees
that, upon his exercise of this Option, in whole or in part, unless there is in
effect at that time under the Securities Act a registration statement relating
to the Shares issued to him, he will acquire the Shares issuable upon exercise
of this Option for the purpose of investment and not with a view to their resale
or further
distribution, and that upon each exercise thereof he shall furnish to the
Company a written statement to such effect, satisfactory to the Company in form
and substance. Optionee agrees that any certificates issued upon exercise of
this Option may bear a legend indicating that their transferability is
restricted in accordance with applicable state or federal securities law. Any
person or persons entitled to exercise this Option under the provisions of
Paragraphs 5 and 6 hereof shall, upon each exercise of this Option under
circumstances in which Optionee would be required to furnish such a written
statement, also furnish to the Company a written statement to the same effect,
satisfactory to the Company in form and substance.
13. PLAN GOVERNS. This Agreement and the Option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan, as it may be construed
by the Administrator. It is intended that this Option shall qualify as an
incentive stock option as defined by Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and this Agreement shall be construed in a manner
which will enable this Option to be so qualified. Optionee hereby acknowledges
receipt of a copy of the Plan.
14. NOTICES. All notices to the Company shall be addressed to the Chief
Financial Officer at the principal executive office of the Company, and all
notices to Optionee shall be addressed to Optionee at the address of Optionee on
file with the Company or its subsidiary, or to such other address as either may
designate to the other in writing. A notice shall be deemed to be duly given if
and when enclosed in a properly addressed sealed envelope deposited, postage
prepaid, with the United States Postal Service. In lieu of giving notice by mail
as aforesaid, written notices under this Agreement may be given by personal
delivery to Optionee or to the Chief Financial Officer (as the case may be).
15. SALE OR OTHER DISPOSITION. Optionee understands that, under current
law, beneficial tax treatment resulting from the exercise of this Option will be
available only if certain requirements of the Code are satisfied, including
without limitation, the requirement that no disposition of Shares acquired
pursuant to exercise of this Option be made within two years from the grant date
or within one year after the transfer of Shares to him or her. If Optionee at
any time contemplates the disposition (whether by sale, gift, exchange, or other
form of transfer) of any such Shares, he or she will first notify the Company in
writing of such proposed disposition and cooperate with the Company in complying
with all applicable requirements of law, which, in the judgment of the Company,
must be satisfied prior to such disposition. In addition to the foregoing,
Optionee hereby agrees that before Optionee disposes (whether by sale, exchange,
gift, or otherwise) of any Shares acquired by exercise of this Option within two
years of the grant date or within one year after the transfer of such Shares to
Optionee upon exercise of this Option, Optionee shall promptly notify the
Company in writing of the date and terms of the proposed disposition and shall
provide such other information regarding the Option as the Company may
reasonably require immediately before such disposition. Said written notice
shall state the date of such proposed disposition, and the type and amount of
the consideration to be received for such Shares by Optionee in connection
therewith. In the event of any such disposition, the Company shall have the
right to require Optionee to immediately pay the Company the amount of taxes (if
any) which the Company is required to withhold under federal and/or state law as
a result of the granting or exercise of the Option and the disposition of the
Shares.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
ROO GROUP, INC.
By: _______________________
Name:
Title:
OPTIONEE
By: Robin Smyth
Name:
Address: _______________________
_______________________
_______________________