printer-friendly

Sample Business Contracts

1996 Stock Incentive Plan - Emaginet Inc.

Sponsored Links

                                 EMAGINET, INC.

                           1996 STOCK INCENTIVE PLAN

1.   Purpose

     The purpose of this 1996 Stock Incentive Plan (the "Plan") of EMAGINET,
INC., a Delaware corporation (the "Company"), is to advance the interests of
the Company's stockholders by enhancing the Company's ability to attract,
retain and motivate persons who make (or are expected to make) important
contributions to the Company by providing such persons with equity ownership
opportunities and performance-based incentives and thereby better aligning the
interests of such persons with those of the Company's stockholders. Except
where the context otherwise requires, the term "Company" shall include any
present and future subsidiary corporations of EMAGINET, INC. as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the "Code").

2.   Eligibility

     The Company's employees, consultants and advisors are eligible to be
granted options, restricted stock, or other stock-based awards (each, an
"Award") under the Plan provided that Incentive Stock Options shall be granted
only to employees of the Company. Any person who has been granted an Award
under the Plan shall be deemed a "Participant".

3.   Administration, Delegation

     (1) Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem
advisable. The Board may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent it
shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.

     (2) Delegation to Executive officers. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum
number of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers.

     (3) Appointment of Committees. To the extent permitted by applicable law,
the

<PAGE>   2
Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). If and when the common
stock, $0.01 par value per share, of the Company (the "Common Stock") is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"), the
Board shall appoint one such Committee of not less than two members, each member
of which shall be an "outside director" within the meaning of Section 162(m) of
the Code and a "non-employee director" as defined in Rule 16b-3 promulgated
under the Exchange Act. All references in the Plan to the "Board" shall mean
the Board or a Committee of the Board or the executive officer referred to in
Section 3(b) to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee or executive officer.

4.   Stock Available for Awards

     (1)  Number of Shares. Subject to adjustment under Section 4(3), Awards may
be made under the Plan for up to ONE MILLION (1,000,000) shares of Common Stock.
If any Award expires or is terminated, surrendered or canceled without having
been fully exercised or is forfeited in whole or in part or results in any
Common Stock not being issued, the unused Common Stock covered by such Award
shall again be available for the grant of Awards under the Plan, subject,
however, in the case of Incentive Stock Options (as hereinafter defined), to any
limitation required under the Code. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.

     (2)  Per-Participant Limit. Subject to adjustment under Section 4(3), for
Awards granted after the Common Stock is registered under the Exchange Act, the
maximum number of shares with respect to which an Award may be granted to any
Participant under the Plan shall be 500,000. The per-participant limit described
in this Section 4(2) shall be construed and applied consistently with Section
162(m) of the Code.

     (3)  Adjustment to Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding Option, (iii) the repurchase price per
security subject to each outstanding Restricted Stock Award, and (iv) the terms
of each other outstanding stock-based Award shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate. If this Section 4(3) applies and Section 8(5)(1)
also applies to any event, Section 8(5)(1) shall be applicable to such event,
and this Section 4(3) shall not be applicable.

5.   Stock Options

     (1)  General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option,

<PAGE>   3
the exercise price of each Option and the conditions and limitations applicable
to the exercise of each Option, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable. An
Option which is not intended to be an Incentive Stock Option (as hereinafter
defined) shall be designated a "Nonstatutory Stock Option".

   (2)    Incentive Stock Options.  An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.

   (3)    Exercise Price.  The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement.

   (4)    Duration of Options.  Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement, except that, in the case of an Incentive Stock
Option, such Incentive Stock Option shall expire no later than ten years after
the date on which it is granted and, in all cases, options shall be subject to
earlier termination as provided in the Plan.

   (5)    Exercise of Option.  Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(6) for the number of shares for
which the Option is exercised.

   (6)    Payment Upon Exercise.  Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:

     (1)    in cash or by check, payable to the order of the Company;

     (2)    except as the Board may otherwise provide in an Option Agreement,
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or delivery by the Participant to the Company of a copy of irrevocable
and unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price;

     (3)    to the extent permitted by the Board and explicitly provided in an
Option Agreement (i) by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by the Board in good
faith ("Fair Market Value"), which Common Stock was owned by the Participant at
least six months prior to such delivery, (ii) by delivery of a combination of
cash equal to the par value of the Shares being purchased and a promissory note
of the Participant to the Company creating a binding obligation on the part of
Participant for the balance of the purchase price on terms determined by the
Board, or (iii) by payment of such other lawful consideration as the Board may
determine; or
<PAGE>   4
          (4) any combination of the above permitted forms of payment.

6.   Restricted Stock

     (1) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares to the extent payment has not been received)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each,
"Restricted Stock Award").

     (2) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.

7.   Other Stock-Based Awards

     The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including
the grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.

8.   General Provisions Applicable to Awards

     (1) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

     (2) Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.

     (3) Board Discretion. Except as otherwise provided by the Plan, each type
of Award may be made alone or in addition or in relation to any other type of
Award. The terms of each

<PAGE>   5
type of Award need not be identical, and the Board need not treat Participants
uniformly.

     (4)  Termination of Status.  The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

     (5)  Acquisition Events

        (1)    Consequences of Acquisition Events.  Upon the occurrence of an
Acquisition Event (as defined below), or the execution by the Company of any
agreement with respect to an Acquisition Event, the Board shall take any one or
more of the following actions with respect to then outstanding Awards: (1)
provide that outstanding Options shall be assumed, or equivalent Options shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such Options substituted for Incentive Stock Options
shall satisfy, in the determination of the Board, the requirements of Section
424(a) of the Code; (ii) upon written notice to the Participants, provide that
all then unexercised Options will become exercisable in full as of a specified
time (the "Acceleration Time") prior to the Acquisition Event and will terminate
immediately prior to the consummation of such Acquisition Event, except to the
extent exercised by the Participants between the Acceleration Time and the
consummation of such Acquisition Event; (iii) in the event of an Acquisition
Event under the terms of which holders of Common Stock will receive upon
consummation thereof a cash payment for each share of Common Stock surrendered
pursuant to such Acquisition Event (the "Acquisition Price"), provide that all
outstanding Options shall terminate upon consummation of such Acquisition Event
and each Participant shall receive, in exchange therefor, a cash payment equal
to the amount (if any) by which (A) the Acquisition Price multiplied by the
number of shares of Common Stock subject to such outstanding Options (whether or
not then exercisable), exceeds (B) the aggregate exercise price of such Options;
(iv) provide that all Restricted Stock Awards then outstanding shall become free
of all restrictions prior to the consummation of the Acquisition Event; or (v)
provide that any other stock-based Awards outstanding (A) shall become
exercisable, realizable or vested in full, or shall be free of all conditions or
restrictions, as applicable to each such Award, prior to the consummation of the
Acquisition Event, or (B), if applicable, shall be assumed, or equivalent Awards
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof).

        An "Acquisition Event" shall mean: (a) any merger or consolidation which
results in the voting securities of the Company outstanding immediately prior
thereto representing immediately thereafter (either by remaining outstanding or
by being converted into voting securities of the surviving or acquiring entity)
less than 51% of the combined voting power of the voting securities of the
Company or such surviving or acquiring entity outstanding immediately after such
merger or consolidation; (b) any sale of all or substantially all of the assets
of the Company; or (c) the complete liquidation of the Company.

        (2)  Assumption of Options Upon Certain Events. The Board may grant
<PAGE>   6
Awards under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and
conditions as the Board considers appropriate in the circumstances.

     (f)  Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability. The Board may allow Participants
to satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to a
Participant.

     (g)  Amendment of Award. The Board may amend, modify, or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be
required unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.

     (h)  Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been
satisfied, including any applicable securities laws and any applicable stock
exchange or stock market rules and regulations, and (iii) the Participant has
executed and delivered to the Company such representations or agreements as the
Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.

     (i)  Acceleration. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.

9.   Miscellaneous

  (1)     No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any
other relationship with the Company. The Company expressly reserves the right
at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
<PAGE>   7
     (2) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.

     (3) Effective Date and Term of Plan. The Plan shall become effective on the
date on which it is adopted by the Board but no option granted under the Plan
shall become exercisable unless and until the Plan shall have been approved by
the Company's shareholders. If such shareholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, options
previously granted under the Plan shall not vest and shall terminate and no
options shall be granted thereafter. No Awards shall be granted under the Plan
after the completion of ten years from the earlier of (i) the date on which the
Plan was adopted by the Board or (ii) the date the Plan was approved by the
Company's stockholders, but Awards previously granted may extend beyond that
date.

     (4) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, except that if at any time the approval of
shareholders is required under Section 422 of the Code or any successor
provision with respect to Incentive Stock Options, or under Rule 16b-3, the
Board of Directors may not effect such modification or amendment without such
approval.

     (5) Governing Law. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law.
<PAGE>   8
(PLAN YEAR) GRANT

                                 EMAGINET, INC.

                        Incentive Stock Option Agreement
                    Granted Under 1996 Stock Incentive Plan

     THIS AGREEMENT, dated as of the 20th day of January, 1998 by and between
EMAGINET, INC., a Delaware corporation ("the "Company" or "Emaginet"), and
(FULL NAME) ("Participant").

     WHEREAS, the Company believes that it is in the Company's best interest to
adopt a Stock Option Plan for its employees; and

     WHEREAS, the Board of Directors and Shareholders of the Company voted and
approved in 1996 to institute such a plan, which was to have been filed with
the State of Maryland Securities Division at that time; and

     WHEREAS, the plan was properly filed with the Maryland Securities Division
on January 12, 1998, and thereafter became effective on January 20, 1998; and

     WHEREAS, the Company now intends to implement this Agreement with
Participant as if the Stock Option Plan had been implemented in 1996,

     NOW, THEREFORE, it is hereby agreed between the parties as follows:

1.   Grant of Option.

     This agreement evidences the grant by EMAGINET, on (DATE), to Participant,
of an option to purchase, in whole or in part, on the terms provided herein and
in the Company's 1996 Stock Incentive Plan (the "Plan"), a total of (OPTIONS)
shares of common stock, $0.01 par value per share, of the Company ("Common
Stock") (the "Shares") at (PRICE) per Share. Unless earlier terminated, this
option shall expire ten (10) years from October 19, 1996 (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").
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.

<PAGE>   9
EMAGINET STOCK OPTION AGREEMENT
(PLAN YEAR) GRANT
PAGE 2


2.   Vesting Schedule.

     This option will become exercisable ("vest") as to 25% of the original
number of Shares on the first anniversary of the date of the grant of the
option (the "Grant Date") and as to an additional 25% of the original number of
Shares at the end of each successive full one year period following the first
anniversary of the Grant Date until the fourth anniversary of the Grant Date.
This option shall expire upon, and will not be exercisable after, the Final
Exercise Date.

     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 under Section 3 hereof or 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
          (i) by delivery of shares of Common Stock owned by the Participant
          valued at their fair market value as determined by the Board in good
          faith (the "Fair Market Value"), which Common Stock was owned by the
          Participant at least six months prior to such delivery; (ii) if
          acceptable to the Board as it may determine in its sole discretion, by
          delivery of a combination of cash equal to the par value of the shares
          being purchased and a promissory note of the Participant to the
          Company creating a binding obligation on the part of the Participant
          for the balance of the purchase price on terms determined by the
          Board; or (iii) by payment of such other lawful consideration as the
          Board may determine. 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 10 whole
          shares.

     (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 date of grant of this option, an
          employee 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 paragraphs (d) and (e) 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. Notwithstanding
          the foregoing, if the Participant, prior to the Final Exercise Date,
          violates the non-competition or

<PAGE>   10
EMAGINET STOCK OPTION AGREEMENT
(PLAN YEAR) GRANT
PAGE 3



          confidentiality provisions of any employment contract, confidentiality
          and nondisclosure agreement or other agreement between the Participant
          and the Company, the right to exercise this option shall terminate
          immediately upon such violation.

     (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
          "cause" as specified in paragraph (e) below, this option shall be
          exercisable, within the period of one year following the date of death
          or disability of the Participant by the Participant or PARTICIPANT'S
          LEGAL HEIRS, provided that this option shall be exercisable only to
          the extent that this option was exercisable by the Participant on the
          date of his or her death or disability, and further provided that this
          option shall not be exercisable after the Final Exercise Date.

     (e)  Discharge for Cause. If the Participant, prior to the Final Exercise
          Date, is discharged by the Company for "cause" (as defined below), the
          right to exercise this option shall terminate immediately upon the
          effective date of such discharge. "Cause" shall mean willful
          misconduct by the Participant or willful failure by the Participant to
          perform his or her responsibilities to the Company (including, without
          limitation, breach by the Participant of any provision of any
          employment, consulting, advisory, nondisclosure, non-competition or
          other similar agreement between the Participant and the Company), as
          determined by the Company, which determination shall be conclusive.
          The Participant shall be considered to have been discharged for
          "Cause" if the Company determines, within 30 days after the
          Participant's resignation, that discharge for cause was warranted.

4.   Right of First Refusal.

     (a)  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 Notice") to the Company. The Transfer
          Notice shall name the proposed transferee and state the number of such
          Shares the Participant proposes to transfer (the "Offered Shares"),
          the price per share and all other material terms and conditions of the
          transfer.

     (b)  For 30 days following its receipt of such Transfer Notice, the Company
          shall have the option to purchase all (but not less than all) of the
          Offered Shares at the price and upon the terms set forth in the
          Transfer Notice. In the event the Company elects to purchase all of
          the Offered Shares, it shall give written notice of such election to
          the Participant within such 30-day period. Within 10 days after his
          receipt of such notice, the Participant shall tender to the Company at
          its principal
<PAGE>   11
EMAGINET STOCK OPTION AGREEMENT
(PLAN YEAR) GRANT
PAGE 4

          offices the certificate or certificates representing the Offered
          Shares, duly endorsed in blank by the Participant or with duly
          endorsed stock powers attached thereto, all in a form suitable for
          transfer of the Offered Shares to the Company. Upon receipt of such
          certificate or certificates, the Company shall deliver or mail to the
          Participant a check in payment of the purchase price for the Offered
          Shares; provided that if the terms of payment set forth in the
          Transfer Notice were other than cash against delivery, the Company may
          pay for the Offered Shares on the same terms and conditions as were
          set forth in the Transfer Notice.

     (c)  At and after the time at which the Offered Shares are required to be
          delivered to the Company for transfer to the Company pursuant to
          subsection (b) above, the Company shall not pay any dividend to the
          Participant on account of such Shares or permit the Participant to
          exercise any of the privileges or rights of a stockholder with respect
          to such Offered Shares, but shall, in so far as permitted by law,
          treat the Company as the owner of such Offered Shares.

     (d)  If the Company does not elect to acquire all of the Offered Shares,
          the Participant may, within the 30-day period following the expiration
          of the option granted to the Company under subsection (b) above,
          transfer the Offered Shares to the proposed transferee, provided that
          such transfer shall not be on terms and conditions more favorable to
          the transferee than those contained in the Transfer Notice.
          Notwithstanding any of the above, all Offered Shares transferred
          pursuant to this Section 4 shall remain subject to the right of first
          refusal set forth in this Section 4 and such transferee shall, as a
          condition to such transfer, deliver to the Company a written
          instrument confirming that such transferee shall be bound by all of
          the terms and conditions of this Section 4.

     (e)  The following transactions shall be exempt from the provisions of this
          Section 4:

          (1)  any transfer of Shares to or for the benefit of any spouse,
               parent, child or grandchild of the Participant, or to a trust for
               their benefit;

          (2)  any transfer pursuant to an effective registration statement
               filed by the Company under the Securities Act of 1933, as amended
               (the "Securities Act"); and

          (3)  any transfer of the Shares pursuant to the sale of all or
               substantially all of the business of the Company;

          provided, however, that in the case of a transfer pursuant to clause
          (1) above, such Shares shall remain subject to the right of first
          refusal set forth in this Section 4 and such transferee shall, as a
          condition to such transfer, deliver to the Company a written
          instrument confirming that such transferee shall be bound by all of
          the terms and conditions of this Section 4.
<PAGE>   12
EMAGINET STOCK OPTION AGREEMENT
(PLAN YEAR) GRANT
PAGE 5

     (f)  The Company may assign its rights to purchase Offered Shares in any
          particular transaction under this Section 4 to one or more persons or
          entities.

     (g)  The provisions of this Section 4 shall terminate upon the earlier of
          the following events:

          (1)  the closing of the sale of shares of Common stock in an
               underwritten public offering pursuant to an effective
               registration statement filed by the Company under the Securities
               Act; or

          (2)  the sale of all or substantially all of the capital stock, assets
               or business of the Company, by merger, consolidation, sale of
               assets or otherwise.

     (h)  The Company shall not be required (a) to transfer on its books any of
          the Shares which shall have been sold or transferred in violation of
          any of the provisions set forth in this Section 4, or (b) to treat as
          owner of such Shares or to pay dividends to any transferee to whom any
          such Shares shall have been so sold or transferred.

5.   Agreement in Connection with Public Offering.

     The Participant agrees, in connection with the initial underwritten public
offering of the Company's securities pursuant to a registration statement under
the Securities Act, (i) not to sell, make short sale of, loan, grant any options
for the purchase of, or otherwise dispose of any shares of Common Stock held by
the Participant (other than those shares included in the offering) without the
prior written consent of the Company or the underwriters managing such initial
underwritten public offering of the Company's securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute
any agreement reflecting clause (i) above as may be requested by the Company or
the managing underwriters at the time of such offering.

6.   Withholding.

     No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option. The Participant may
satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value.

7.   Nontransferability of Option.

     This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent
<PAGE>   13
EMAGINET STOCK OPTION AGREEMENT
(PLAN YEAR) GRANT
PAGE 6

and distribution, and, during the lifetime of the Participant, this option
shall be exercisable only by the Participant.

8.   Disqualifying Disposition.

     If the Participant disposes of Shares acquired upon exercise of this
option within two years from the date of grant of the option or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.

9.   Provisions of the Plan.

     This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.

     IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.

                                   EMAGINET, INC.

Dated: (Sign Date)                 By: _________________________________
                                       Name:  Kamran Amjadi
                                       Title: President & CEO

                            PARTICIPANT'S ACCEPTANCE

     The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1996 Stock Incentive Plan.

                                   PARTICIPANT:

                                       _________________________________
                                       (Full_Name)
                                       (Address)