communicate_8k-ex1004.htm


    Exhibit 10.4

     

    
      


       

       COMMUNICATE.COM,
INC.

       

      Incentive
Stock Option Agreement

      Granted under the
2007 Stock Incentive
Plan

       

      1. Grant of
Option.

       

      This
agreement evidences the grant by Communicate.com, Inc., a Nevada corporation
(the “Company”), effective on May 22, 2008 (the “Grant Date” or the “Effective
Date”) to Phillip Kast, an employee of the Company (the “Participant”), of an
option to purchase, in whole or in part, on the terms set forth herein and in
the Company’s 2007 Stock Incentive Plan (the “Plan”) and the employee’s
Employment Agreement dated March 25, 2008 (the “Employment Agreement”), a total
of 50,000 shares (the “Shares”) of common stock, $0.001 par value per share, of
the Company (“Common Stock”) at a price per share equal to the market closing
price of the Common Stock on the Effective Date.  Unless earlier
terminated, this option shall expire at 5:00 p.m., Pacific time, on the date
that is the fifth anniversary of the Effective Date (the “Final Exercise
Date”).

       

      It is
intended that the option evidenced by this agreement shall be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the
“Code”).  Should the grant for any reason not be or become eligible to
be treated as an incentive stock option under U.S. or Canadian law, it shall be
deemed a non-qualified stock option under U.S. or Canadian
law.  Except as otherwise indicated by the context, the term
“Participant”, as used in this option, shall be deemed to include any person who
acquires the right to exercise this option validly under its terms.

       

      2. Vesting
Schedule.

       

      This
option will become exercisable (“vest”) as to (i) 33.333% of the Shares on the
first anniversary
of the Effective Date and (ii) an additional 8.333 % of the Shares on the last
day of each successive three-month period thereafter, until all such Shares have
vested.

       

      The right
of exercise shall be cumulative so that to the extent the option is not
exercised in any period to the maximum extent permissible it shall continue to
be exercisable, in whole or in part, with respect to all Shares for which it is
vested until the earlier of the Final Exercise Date or the termination of this
option hereunder or under the Plan.

       

      3. Exercise of
Option.

       

      (a) Form of
Exercise.  Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan.  The Participant may purchase less than the
number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than one hundred whole
shares.

       

      
        
          
          

        

        
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      (b) Continuous Relationship with
the Company Required.  Except as otherwise provided in this
Section 3, this option may not be exercised unless the Participant, at the
time he or she exercises this option, is, and has been at all times since the
Grant Date, an employee or officer of, or consultant or advisor to, the Company
or any parent or subsidiary of the Company as defined in Section 424(e) or (f)
of the Code (an “Eligible Participant”).

       

      (c) Termination of Relationship
with the Company.

       

      (1)  If
the Participant ceases to be an Eligible Participant for any reason, except as
for Termination for Just Cause (as provided herein), Termination without Just
Cause (as provided herein), or Upon Death or Disability (as provided in
paragraphs (d) below), then the right to exercise this option shall
terminate thirty
(30) days 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.

       

      (2) If the
Participant, prior to the Final Exercise Date, is Terminated without Cause (as
set forth in the Employment Agreement), the Participant shall retain all vested
shares of the option and fifty percent (50%) of the unvested shares of the
option as of the date of termination subject to the provisions of Section 3.4 of
the Employment Agreement.

       

      (3) If the
Participant, prior to the Final Exercise Date, is terminated for Just Cause (as
set forth in the Employment Agreement), violates the provisions of any
employment contract, or violates any confidentiality and nondisclosure agreement
or other agreement between the Participant and the Company, the right to
exercise this option shall terminate immediately without further notice and
obligation to the Participant.

       

      (d) Exercise Period Upon Death
or Disability.  If the Participant dies or becomes disabled
(within the meaning of Section 22(e)(3) of the Code) prior to the Final
Exercise Date while he or she is an Eligible Participant and the Company has not
terminated such relationship for “Just Cause” as specified in paragraph (c)
above, this option shall be exercisable, within the period of two months
following the date of death or disability of the Participant, by the Participant
(or in the case of death by an authorized transferee), provided that this option
shall 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.

       

      4. Company Right of First
Refusal.

       

      (a) Notice of Proposed
Transfer.  If the Participant proposes to sell, assign,
transfer, pledge, hypothecate or otherwise dispose of, by operation of law or
otherwise (collectively, “transfer”) any Shares acquired upon exercise of this
option, then the Participant shall first give written notice of the proposed
transfer (the “Transfer 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.

       

      
        
          
          

        

        
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      (b) Company Right to
Purchase.  For 30 days following its receipt of such Transfer
Notice, the Company shall have the option to purchase all or part 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 or part 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 offices the certificate or certificates representing the Offered
Shares to be purchased by the Company, 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.  Promptly following
receipt of such certificate or certificates, the Company shall deliver or mail
to the Participant a check in payment of the purchase price for such 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; and provided further that any
delay in making such payment shall not invalidate the Company’s exercise of its
option to purchase the Offered Shares.

       

      (c) Shares Not Purchased By
Company.  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 which the Company has not elected to acquire 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.

       

      (d) Consequences of
Non-Delivery.  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 Offered 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.

       

      (e) Exempt
Transactions.  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, 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) the sale
of all or substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation);

       

      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.

       

      
        
          
          

        

        
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      (f) Assignment of Company
Right.  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) Termination.  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 (other than a
merger or consolidation in which all or substantially all of the individuals and
entities who were beneficial owners of the Common Stock immediately prior to
such transaction beneficially own, directly or indirectly, more than 75% of the
outstanding securities entitled to vote generally in the election of directors
of the resulting, surviving or acquiring corporation in such
transaction).

       

      (h) No Obligation to Recognize
Invalid Transfer.  The Company shall not be required (1) 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 (2) 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.

       

      (i) Legends.  The
certificate representing Shares shall bear a legend substantially in the
following form (in addition to, or in combination with, any legend required by
applicable federal and state securities laws and agreements relating to the
transfer of the Company securities):

       

      "The
shares represented by this certificate are subject to a right of first refusal
in favor of the Company, as provided in a certain stock option agreement with
the Company."

       

      5. Agreement in Connection with
Public Offering.

       

      The
Participant agrees, in connection with an 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.

       

      
        
          
          

        

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

       

      7. Provisions of the
Plan.

       

      In
addition to the terms of the Employment Agreement, this option is subject to the
provisions of the Plan, a copy of which is furnished to the Participant with
this option.

       

      


       

      


       

      REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

       

      


      
        
          
          

        

        
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      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.

       

       

      
         

        
          
            	 	
                    Communicate.com,
      Inc.

                  	 
	 	 	 	 
	
                    Dated:
      May 22, 2008

                  	
                    By:
      

                  	/s/ C.
      Geoffrey Hampson	 
	 	 	Name:
      C. Geoffrey Hampson 	 
	 	 	Title:
      Chief Executive Officer 	 
	 	 	 	 


          

        

         

         

        
          
            
            

          

          
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        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 2007 Stock Incentive Plan.

         

        
          PARTICIPANT:

           

          /s/ Phillip Kast

           

          Phillip Kast

           

          Address: __________________

          ___________________

           

           

           

           

           

           

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