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WORLD OF TEA INC.

2008 EQUITY INCENTIVE PLAN

FORM OF INCENTIVE STOCK OPTION AGREEMENT

This INCENTIVE STOCK OPTION AGREEMENT (the “Option Agreement”), dated as of the
__ day of ___________, 20__ (the “Grant Date”), is between World of Tea Inc., a
Nevada corporation (the “Company”), and _______ (the “Optionee”), a key employee
of the Company or of a Subsidiary of the Company (a “Related Corporation”),
pursuant to the World of Tea Inc. 2008 Equity Incentive Plan (the “Plan”).

WHEREAS, the Company desires to give the Optionee the opportunity to purchase
shares of common stock of the Company, par value $0.001 (“Common Shares”) in
accordance with the provisions of the Plan, a copy of which is attached hereto;

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto, intending to
be legally bound hereby, agree as follows:

1.

Grant of Option.  The Company hereby grants to the Optionee the right and option
(the “Option”) to purchase all or any part of an aggregate of [________]
 (______) Common Shares.  The Option is in all respects limited and conditioned
as hereinafter provided, and is subject in all respects to the terms and
conditions of the Plan now in effect and as it may be amended from time to time
(but only to the extent that such amendments apply to outstanding options).
 Such terms and conditions are incorporated herein by reference, made a part
hereof, and shall control in the event of any conflict with any other terms of
this Option Agreement.  The Option granted hereunder is intended to be an
incentive stock option (“ISO”) meeting the requirements of the Plan and section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), and not a
nonqualified stock option (“NQSO”).

2.

Exercise Price.  The exercise price of the Common Shares covered by this Option
shall be $_________ per share.  It is the determination of the committee
administering the Plan (the “Committee”) that on the Grant Date the exercise
price was not less than the greater of (i) 100% (110% for an Optionee who owns
more than 10% of the total combined voting power of all shares of stock of the
Company or of a Related Corporation – a “More-Than-10% Owner”) of the “Fair
Market Value” (as defined in the Plan) of a Common Share, or (ii) the par value
of a Common Share.

3.

Term.  Unless earlier terminated pursuant to any provision of the Plan or of
this Option Agreement, this Option shall expire on _________ __, 20__ (the
“Expiration Date”), which date is not more than 10 years (five years in the case
of a More-Than-10% Owner) from the Grant Date. This Option shall not be
exercisable on or after the Expiration Date.

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4.

Exercise of Option.  The Option shall vest according to the following schedule,
provided that Optionee remains continuously employed as a key employee of the
Company or a Related Corporation from the date hereof through the applicable
vesting date:

Date Installment Becomes Exercisable

Number of Shares

 

______ Shares

 

an additional ______ Shares

 

an additional ______ Shares

 

an additional ______ Shares

The Committee may accelerate any vesting date of the Option, in its discretion,
if it deems such acceleration to be desirable.  Once the Option becomes
exercisable, it will remain exercisable until it is exercised or until it
terminates.

5.

Method of Exercising Option.  Subject to the terms and conditions of this Option
Agreement and the Plan, the Option may be exercised by written notice to the
Company at its principal office.  The form of such notice is attached hereto and
shall state the election to exercise the Option and the number of whole shares
with respect to which it is being exercised; shall be signed by the person or
persons so exercising the Option; and shall be accompanied by payment of the
full exercise price of such shares.  Only full shares will be issued.  

The exercise price shall be paid to the Company:

(a)

in cash, or by certified check, bank draft, or postal or express money order;

(b)

through the delivery of Common Shares previously acquired by the Optionee;

(c)

by delivering a properly executed notice of exercise of the Option to the
Company and a broker, with irrevocable instructions to the broker promptly to
deliver to the Company the amount necessary to pay the exercise price of the
Option;

(d)

in Common Shares newly acquired by the Optionee upon exercise of the Option
(which shall constitute a disqualifying disposition with respect to this ISO);
or

(e)

in any combination of (a), (b), (c) or (d) above.

In the event the exercise price is paid, in whole or in part, with Common
Shares, the portion of the exercise price so paid shall be equal to the Fair
Market Value of the Common Shares surrendered on the date of exercise.

Upon receipt of notice of exercise and payment, the Company shall deliver a
certificate or certificates representing the Common Shares with respect to which
the Option is so exercised. The Optionee shall obtain the rights of a
shareholder upon receipt of a certificate(s) representing such Common Shares.

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Such certificate(s) shall be registered in the name of the person so exercising
the Option (or, if the Option is exercised by the Optionee and if the Optionee
so requests in the notice exercising the Option, shall be registered in the name
of the Optionee and the Optionee's spouse, jointly, with right of survivorship),
and shall be delivered as provided above to, or upon the written order of, the
person exercising the Option.  In the event the Option is exercised by any
person after the death or disability (as determined in accordance with Section
22(e)(3) of the Code) of the Optionee, the notice shall be accompanied by
appropriate proof of the right of such person to exercise the Option.  All
Common Shares that are purchased upon exercise of the Option as provided herein
shall be fully paid and non-assessable.

Upon exercise of the Option, Optionee shall be responsible for all employment
and income taxes then or thereafter due (whether Federal, State or local), and
if the Optionee does not remit to the Company sufficient cash (or, with the
consent of the Committee, Common Shares) to satisfy all applicable withholding
requirements, the Company shall be entitled to satisfy any withholding
requirements for any such tax by disposing of Common Shares at exercise,
withholding cash from Optionee's salary or other compensation or such other
means as the Committee considers appropriate to the fullest extent permitted by
applicable law.  Nothing in the preceding sentence shall impair or limit the
Company's rights with respect to satisfying withholding obligations under
Section 10 of the Plan.

6.

Non-Transferability of Option.  This Option is not assignable or transferable,
in whole or in part, by the Optionee other than by will or by the laws of
descent and distribution.  During the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee or, in the event of his or her disability,
by his or her guardian or legal representative.

7.

Termination of Employment.  If the Optionee's employment with the Company and
all Related Corporations is terminated for any reason (other than death or
disability) prior to the Expiration Date, then this Option may be exercised by
Optionee, to the extent of the number of Common Shares with respect to which the
Optionee could have exercised it on the date of such termination of employment,
at any time prior to the earlier of (i) the Expiration Date, or (ii) three
months after such termination of employment.  Any part of the Option that was
not exercisable immediately before the termination of Optionee's employment
shall terminate at that time.

8.

Disability.  If the Optionee becomes disabled (as determined in accordance with
section 22(e)(3) of the Code) during his or her employment and, prior to the
Expiration Date, the Optionee's employment is terminated as a consequence of
such disability, then this Option may be exercised by the Optionee or by the
Optionee's legal representative, to the extent of the number of Common Shares
with respect to which the Optionee could have exercised it on the date of such
termination of employment at any time prior to the earlier of (i) the Expiration
Date or (ii) one year after such termination of employment.  Any part of the
Option that was not exercisable immediately before the Optionee's termination of
employment shall terminate at that time.  

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9.

Death.  If the Optionee dies during his or her employment and prior to the
Expiration Date, or if the Optionee's employment is terminated for any reason
(as described in Paragraphs 7 and 8) and the Optionee dies following his or her
termination of employment but prior to the earliest of (i) the Expiration Date,
or (ii) the expiration of the period determined under Paragraph 7 or 8 (as
applicable to the Optionee), then this Option may be exercised by the Optionee's
estate, personal representative or beneficiary who acquired the right to
exercise this Option by bequest or inheritance or by reason of the Optionee's
death, to the extent of the number of Common Shares with respect to which the
Optionee could have exercised it on the date of his or her death, at any time
prior to the earlier of (i) the Expiration Date or (ii) one year after the date
of the Optionee's death.  Any part of the Option that was not exercisable
immediately before the Optionee's death shall terminate at that time.  

 10.

Disqualifying Disposition of Option Shares.  The Optionee agrees to give written
notice to the Company, at its principal office, if a “disposition” of the Common
Shares acquired through exercise of the Option granted hereunder occurs at any
time within two years after the Grant Date or within one year after the transfer
to the Optionee of such shares.  Optionee acknowledges that if such disposition
occurs, the Optionee generally will recognize ordinary income as of the date the
Option was exercised in an amount equal to the lesser of (i) the Fair Market
Value of the Common Shares on the date of exercise minus the exercise price, or
(ii) the amount realized on disposition of such shares minus the exercise price.
 If requested by the Company at the time of and in the case of any such
disposition, Optionee shall pay to the Company an amount sufficient to satisfy
the Company's federal, state and local withholding tax obligations with respect
to such disposition.  The provisions of this Section 10 shall apply, whether or
not the Optionee is in the employ of the Company at the time of the relevant
disposition.  For purposes of this Paragraph, the term “disposition” shall have
the meaning assigned to such term by section 424(c) of the Code.

11.

Securities Matters.  (a)  If, at any time, counsel to the Company shall
determine that the listing, registration or qualification of the Common Shares
subject to the Option upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, or that
the disclosure of non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with, the issuance or
purchase of Common Shares hereunder, such Option may not be exercised, in whole
or in part, unless such listing, registration, qualification, consent or
approval, or satisfaction of such condition shall have been effected or obtained
on conditions acceptable to the Board of Directors.  The Company shall be under
no obligation to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition.  The Committee shall inform the
Optionee in writing of any decision to defer or prohibit the exercise of an
Option.  During the period that the effectiveness of the exercise of an Option
has been deferred or prohibited, the Optionee may, by written notice, withdraw
the Optionee's decision to exercise and obtain a refund of any amount paid with
respect thereto.

(b)

The Company may require: (i) the Optionee (or any other person exercising the
Option in the case of the Optionee's death or Disability) as a condition of
exercising the Option, to give written assurances, in substance and form
satisfactory to the Company, to the effect that such person is acquiring the
Common Shares subject to the Option for his or her own account for investment
and not with any present intention of selling or otherwise distributing the
same, and to make such other representations or covenants; and (ii) that any
certificates for Common Shares delivered in connection with the exercise of the
Option bear such legends, in each case as the Company deems necessary or
appropriate, in order to comply with federal and applicable state securities
laws, to comply with covenants or representations made by the Company in
connection with any public offering of its Common Shares or otherwise.  The
Optionee specifically understands and agrees that the Common Shares, if and when
issued upon exercise of the Option, may be “restricted securities,” as that term
is defined in Rule 144 under the Securities Act of 1933 and, accordingly, the
Optionee may be required to hold the shares indefinitely unless they are
registered under such Securities Act of 1933, as amended, or an exemption from
such registration is available.

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(c)

The Optionee shall have no rights as a shareholder with respect to any Common
Shares covered by the Option (including, without limitation, any rights to
receive dividends or non-cash distributions with respect to such shares) until
the date of issue of a stock certificate to the Optionee for such Common Shares.
 No adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.

12.

Governing Law.  This Option Agreement shall be governed by the applicable Code
provisions to the maximum extent possible.  Otherwise, the laws of the State of
Delaware (without reference to the principles of conflict of laws) shall govern
the operation of, and the rights of the Optionee under, the Plan and Options
granted thereunder.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this Incentive Stock Option Agreement
to be duly executed by its duly authorized officer, and the Optionee has
hereunto set his or her hand and seal, all as of the ______ day of ____________,
20__.

WORLD OF TEA INC.

By:_______________________________

Name:

Title:

________________________________

Optionee

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WORLD OF TEA INC.

2008 EQUITY INCENTIVE PLAN

Notice of Exercise of Incentive Stock Option

I hereby exercise the incentive stock option granted to me pursuant to the
Incentive Stock Option Agreement dated as of  ____________ __, 20__, by World of
Tea Inc. (the “Company”), with respect to the following number of shares of the
Company's common stock (“Shares”), par value $0.001 per Share, covered by said
option:

Number of Shares to be purchased:

  _______

Purchase price per Share:

$_______

Total purchase price:

$_______

     

A.

Enclosed is cash or my certified check, bank draft, or postal or express money
order in the amount of $________ in full/partial [circle one] payment for such
Shares;

and/or

     

B.

Enclosed is/are           Share(s) with a total fair market value of $
             on the date hereof in full/partial [circle one] payment for such
Shares;

and/or

     

C.

I have provided notice to                          [insert name of broker], a
broker, who will render full/partial [circle one] payment for such Shares.
 [Optionee should attach to the notice of exercise provided to such broker a
copy of this Notice of Exercise and irrevocable instructions to pay to the
Company the full/partial (as elected above) exercise price.]

and/or

     

D.

I elect to satisfy the payment for Shares purchased hereunder by having the
Company withhold newly acquired Shares pursuant to the exercise of the Option.
 I understand that this will result in a “disqualifying disposition,” as
described in Section 10 of my Incentive Stock Option Agreement.

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Please have the certificate or certificates representing the purchased Shares
registered in the following name or names*:
                                                                   ; and sent to
                                                .

DATED:                       ___, 20__

______________________ Optionee's Signature

 

 

________________
* Certificates may be registered in the name of the Optionee alone or in the
joint names (with right of survivorship) of the Optionee and his or her spouse.

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