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BAM! ENTERTAINMENT, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
This 2001 Employee Stock Purchase Plan (the "Plan") of BAM! Entertainment, Inc.,
a Delaware corporation (the "Company"), was adopted by the Board of Directors
and shareholders of the Company as of August 9, 2001.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986,
as amended. The provisions of the Plan, accordingly, shall be construed
so as to extend and limit participation in a manner consistent with the
requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean BAM! Entertainment, Inc., a Delaware
corporation, and any Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time gross earnings
including commissions, payments for overtime, incentive payments and
performance bonuses.
(f) "Designated Subsidiary" shall mean (i) any Subsidiary which has been
designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan, (ii) BAM Entertainment Limited and
(iii) BAM Studios (Europe) Limited.
(g) "Employee" shall mean any individual who is an Employee of the
Company or a Designated Subsidiary, for tax purposes whose customary
employment with the Company is at least twenty (20) hours per week and
more than five (5) months in any calendar year. For purposes of the
Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other leave of absence approved
by the Company. Where the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute
or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.
(h) "Enrollment Date" shall mean the first Trading Day of each Offering
Period.
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(i) "Exercise Date" shall mean the last Trading Day of each Purchase
Period.
(j) "Fair Market Value" shall mean, as of any date, the value of Common
Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or system
for the last market trading day on the date of such
determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;
(2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked
prices for the Common Stock on the date of such determination,
as reported in The Wall Street Journal or such other source as
the Board deems reliable, or;
(3) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
(k) "Offering Periods" shall mean the periods of approximately six (6)
months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after March 1 and
September 1 of each year and terminating on the last Trading Day in the
periods ending six months later, except as provided in Section 4 of
this Plan. The first Offering Period under the Plan shall commence with
the first Trading Day on or after the date on which the Securities and
Exchange Commission declares the Company's Registration Statement
effective and ending on the last Trading Day on or before December 31,
2001. The duration and timing of Offering Periods may be changed
pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Purchase Period" shall mean the approximately six month period
commencing after one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period shall
commence on the Enrollment Date and end with the next Exercise Date. The
first Purchase Period under the Plan shall commence with the first
Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company's Registration Statement effective and
shall end on the last trading day on or before June 30 [2002.].
Beginning on March 1, 2002, each Purchase Period will be for the same
six (6) month interval as the corresponding Offering Period as provided
in Section 4 of this Plan.
(n) "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower; provided, however, that the Purchase
Price may be adjusted by the Board pursuant to Section 20.
(o) "Registration Statement" shall mean the Registration Statement filed
by the Company on Form S-1 as of June 6, 2001, and all amendments
thereto.
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(p) "Reserves" shall mean the number of shares of Common Stock covered
by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.
(q) "Subsidiary" shall mean a corporation, domestic or foreign, of which
not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
(r) "Trading Day" shall mean a day on which national stock exchanges and
the Nasdaq System are open for trading.
3. Eligibility.
(a) Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent
that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of
the capital stock of the Company or of any Subsidiary, or (ii) to the
extent that his or her rights to purchase stock under all employee stock
purchase plans of the Company and its subsidiaries accrues at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such
option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods.
(a) The first Offering Period under the Plan shall commence on the first
Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company's Registration Statement effective and
ending on the last Trading Day on or before December 31, 2001, and the
Plan shall continue to be implemented with consecutive, non-overlapping
Offering Periods that are exclusively six (6) months in duration,
commencing on the first Trading Day on or after May 31 and November 30
of each year thereafter, or on such other date as the Board shall
determine, and continuing thereafter until terminated in accordance with
Section 20 hereof.
(b) The Board shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to
future offerings without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the
first Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a
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subscription agreement authorizing payroll deductions in the form of
Exhibit A to this Plan and filing it with the Company's payroll office
not later than two (2) weeks prior to the applicable Enrollment Date.
Eligible employees who begin employment with the Company within two
weeks of an Enrollment Date may file a subscription agreement with the
Company's payroll office up to one day prior to the applicable
Enrollment Date. With respect to the first Enrollment Date, eligible
Employees may file a subscription agreement up to one day prior to the
Enrollment Date. An eligible Employee may participate in only one
Offering Period at a time.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll
in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day
during the Offering Period in an amount not exceeding 15% of the
Compensation which he or she receives on each pay day during the
Offering Period. The maximum calendar year contribution shall not exceed
$25,000 worth of stock (determined at the fair market value of the
shares at the time such option is granted).
(b) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments
into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may decrease the rate of his or her
payroll deductions during the Offering Period by completing or filing
with the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Board may, in its discretion, limit the
number of participation rate changes during any Offering Period. The
change in rate shall be effective with the first full payroll period
following five (5) business days after the Company's receipt of the new
subscription agreement unless the Company elects to process a given
change in participation more quickly. A participant's subscription
agreement shall remain in effect for successive Offering Periods unless
terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%)
at any time during a Purchase Period. Payroll deductions shall
recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Purchase Period which is
scheduled to end in the following calendar year, unless terminated by
the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at the
time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant
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must make adequate provision for the Company's federal, state, or other
tax withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At any time, the
Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required
to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Common Stock by the
Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted
an option to purchase on each Exercise Date during such Offering Period
(at the applicable Purchase Price) up to a number of shares of the
Company's Common Stock determined by dividing such Employee's payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the applicable Purchase
Price; provided that in no event shall an Employee be permitted to
purchase during each Offering Period more than a number of Shares
determined by dividing $25,000 by the Fair Market Value of a share of
the Company's Common Stock (subject to any adjustment pursuant to
Section 19) on the Enrollment Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b)
and 12 hereof. The Board may, for future Offering Periods and in its
absolute discretion, set a maximum number of shares of the Company's
Common Stock an Employee may purchase during each Purchase Period of
such Offering Period and increase or decrease such maximum. Exercise of
the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option
shall expire on the last day of the Offering Period.
8. Exercise of Option.
(a) Unless a participant withdraws from the Plan as provided in Section
10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of
full shares subject to option shall be purchased for such participant at
the applicable Purchase Price with the accumulated payroll deductions in
his or her account. No fractional shares shall be purchased; any payroll
deductions accumulated in a participant's account which are not
sufficient to purchase a full share shall be retained in the
participant's account for the subsequent Purchase Period or Offering
Period, subject to earlier withdrawal by the participant as provided in
Section 10 hereof. During a participant's lifetime, a participant's
option to purchase shares hereunder is exercisable only by him or her.
(b) If the Board determines that, on a given Exercise Date, the number
of shares with respect to which options are to be exercised may exceed
(i) the number of shares of Common Stock that were available for sale
under the Plan on the Enrollment Date of the applicable Offering Period,
or (ii) the number of shares available for sale under the Plan on such
Exercise Date, the Board may in its sole discretion (x) provide that the
Company shall make a pro rata allocation of the shares of Common Stock
available for purchase on such Enrollment Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as it
shall determine in its sole discretion to be equitable among all
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participants exercising options to purchase Common Stock on such
Exercise Date, and continue all Offering Periods then in effect, or (y)
provide that the Company shall make a pro rata allocation of the shares
available for purchase on such Enrollment Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as it
shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such
Exercise Date, and terminate any or all Offering Periods then in effect
pursuant to Section 20 hereof. The Company may make pro rata allocation
of the shares available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the
Company's stockholders subsequent to such Enrollment Date.
9. Delivery. As promptly as practicable after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery,
either electronically or manually, to each participant, as appropriate,
or to a designated broker as chosen by the Company in its discretion, of
a certificate representing the shares purchased upon exercise of his or
her option.
10. Withdrawal.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to
the Company in the form of Exhibit B to this Plan. All of the
participant's payroll deductions credited to his or her account shall be
paid to such participant promptly after receipt of notice of withdrawal
and such participant's option for the Offering Period shall be
automatically terminated, and no further payroll deductions for the
purchase of shares shall be made for such Offering Period. If a
participant withdraws from an Offering Period, payroll deductions shall
not resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription agreement.
(b) A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar
plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering
Period from which the participant withdraws.
11. Termination of Employment.
Upon a participant's ceasing to be an Employee, for any reason, he or
she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the
Offering Period, but not yet used to exercise the option, shall be
returned to such participant or, in the case of his or her death, to the
person or persons entitled thereto under Section 15 hereof, and such
participant's option shall be automatically terminated. The preceding
sentence notwithstanding, a participant who receives payment in lieu of
notice of termination of employment shall be treated as continuing to be
an Employee for the participant's customary number of hours per week of
employment during the period in which the participant is subject to such
payment in
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lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
(a) Subject to adjustment upon changes in capitalization of the Company
as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the
Plan shall be 150,000 shares.
(b) The participant shall have no interest or voting right in shares
covered by his option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan shall be
registered in the name of the participant or in the name of the
participant and his or her spouse.
14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or
its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan.
Every finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final and
binding upon all parties.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who is
to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to
such participant of such shares and cash. In addition, a participant may
file a written designation of a beneficiary who is to receive any cash
from the participant's account under the Plan in the event of such
participant's death prior to exercise of the option. If a participant is
married and the designated beneficiary is not the spouse, spousal
consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the participant at
any time by written notice. In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan
who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any
one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person
as the Company may designate.
16. Transferability. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to
receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the
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laws of descent and distribution or as provided in Section 15 hereof) by
the participant. Any such attempt at assignment, transfer, pledge or
other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds from an Offering Period
in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each participant in
the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the
amounts of payroll deductions, the Purchase Price, the number of shares
purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the Reserves, the maximum number of shares
each participant may purchase each Purchase Period (pursuant to Section
7), as well as the price per share and the number of shares of Common
Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease
in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Offering Period then in progress
shall be shortened by setting a new Exercise Date (the "New Exercise
Date"), and shall terminate immediately prior to the consummation of
such proposed dissolution or liquidation, unless provided otherwise by
the Board. The New Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Board shall notify
each participant in writing, at least ten (10) business days prior to
the New Exercise Date, that the Exercise Date for the participant's
option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn
from the Offering Period as provided in Section 10 hereof.
(c) Merger or Asset Sale. In the event of a proposed sale of all or
substantially all of
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the assets of the Company, or the merger of the Company with or into
another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option,
any Purchase Periods then in progress shall be shortened by setting a
new Exercise Date (the "New Exercise Date") and any Offering Periods
then in progress shall end on the New Exercise Date. The New Exercise
Date shall be before the date of the Company's proposed sale or merger.
The Board shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for
the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the
New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.
20. Amendment or Termination.
(a) The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 19
hereof, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board of
Directors on any Exercise Date if the Board determines that the
termination of the Offering Period or the Plan is in the best interests
of the Company and its stockholders. Except as provided in Section 19
and this Section 20 hereof, no amendment may make any change in any
option theretofore granted which adversely affects the rights of any
participant. To the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision or any other applicable law,
regulation or stock exchange rule), the Company shall obtain stockholder
approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected,"
the Board (or its committee) shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase
of Common Stock for each participant properly correspond with amounts
withheld from the participant's Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in
its sole discretion advisable which are consistent with the Plan.
(c) In the event the Board determines that the ongoing operation of the
Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion and, to the extent necessary or desirable,
modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:
(1) altering the Purchase Price for any Offering Period
including an Offering
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Period underway at the time of the change in Purchase Price;
(2) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at
the time of the Board action; and
(3) allocating shares.
Such modifications or amendments shall not require stockholder approval
or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the
receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the
shares may then be listed, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of
any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable
provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect until August 8,
2011, unless sooner terminated under Section 20 hereof.
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EXHIBIT A
BAM! ENTERTAINMENT, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
[ ] Original Application Offering Period Beginning:
[ ] Change in Payroll Deduction Rate -------------
[ ] Change of Beneficiary(ies)
NAME (Please print):
------------------------------------------------------------
(First) (Middle) (Last)
SOCIAL SECURITY NUMBER: - -
------------------------------------
ADDRESS: PHONE:
-----------------------------------------------
- ------------------------------------------------------- (W) ---------------
- ------------------------------------------------------- (H) ---------------
1. ___________________________ hereby elects to participate in the BAM!
Entertainment, Inc. 2001 Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's Common Stock
in accordance with this Subscription Agreement and the Employee Stock Purchase
Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of __% of my Compensation on each payday (from 1 to 15%) during the Offering
Period in accordance with the Employee Stock Purchase Plan. (Please note that no
fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in all
respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to stockholder
approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only): ______________.
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the Offering
Period during which I purchased such shares) or 1 year after the Exercise Date,
I will be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount equal to the excess of the
fair market value of the shares at the time such shares were purchased by me
over the price which I paid for the shares. I hereby agree to notify the Company
in writing within 30 days after the date of any disposition of my shares and I
will make adequate provision for Federal, state or
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other tax withholding obligations, if any, which arise upon the disposition of
the Common Stock. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the Company
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by me. If I dispose of such shares at any time after the expiration
of the 2-year and 1-year holding periods, I understand that I will be treated
for federal income tax purposes as having received income only at the time of
such disposition, and that such income will be taxed as ordinary income only to
the extent of an amount equal to the lesser of (1) the excess of the fair market
value of the shares at the time of such disposition over the purchase price
which I paid for the shares, or (2) 15% of the fair market value of the shares
on the first day of the Offering Period. The remainder of the gain, if any,
recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan.
The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:
Primary Beneficiary (please print):
---------------------------------------------
(First) (Middle (Last)
Initial)
Relationship: Percentage Distribution (if Applicable):
------------------ ---------
Beneficiary's Address:
(include City, State, Zip) ---------------------------------------------------
---------------------------------------------------
Contingent or Other Beneficiary (please print):
---------------------------------
(First) (Middle (Last)
Initial)
Relationship: Percentage Distribution (if Applicable):
------------- -------------
Beneficiary's Address:
(include City, State, Zip) ----------------------------------------------------
---------------------------------------------------
Signature of Spouse:
---------------------------------------------
(Required if spouse is not named beneficiary)
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:
---------------------- ----------------------------------------
Signature of Employee
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EXHIBIT B
BAM! ENTERTAINMENT, INC.
2001 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the BAM! Entertainment,
Inc. 2001 Employee Stock Purchase Plan which began on _____, ___ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
Name:
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Address:
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Social Security #:
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Signature:
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Date:
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