Unassociated Document


    ANSWERS
      CORPORATION

    102
      CAPITAL GAIN STOCK
      OPTION AGREEMENT

    FOR

    [  insert
      name of optionee here  ]

     

    Agreement

     

    1.  Grant
      of Option      Answers
      Corporation (the “Company”) hereby grants, as of __________ (“Date of Grant”),
      to _________________ (the
      “Optionee”) an option (the “Option”) to purchase up to ____________ shares of
      the Company’s Common Stock, $0.001 par value per share (the “Shares”), at an
      exercise price per share equal to $__________ (the “Exercise Price”). The Option
      shall be subject to the terms and conditions set forth herein. The Option was
      issued pursuant to the Company’s 2005 Incentive Compensation Plan (the “Plan”),
      which is incorporated herein for all purposes. The Option is a Capital Gain
      Award and shall be subject to Israeli taxation under the capital gains track
      of
      Section 102. The Option will be issued to the Trustee on behalf of the Optionee.
      The Optionee hereby acknowledges receipt of a copy of the Plan and Trust
      Agreement, as defined below, and agrees to be bound by all of the terms and
      conditions hereof and thereof and all applicable laws and regulations including
      the Ordinance.

     

    2.  Definitions Unless
      otherwise provided herein, Capitalized terms used herein that are defined in
      the
      Plan and not defined herein shall have the meanings attributed thereto in the
      Plan. [For purposes of this Agreement, the term “Cause” shall have the same
      meaning as set forth on Exhibit
      A
      attached
      hereto.]

     

    3.  Israeli
      Tax Compliance

     

    (a) The
      Optionee agrees that the provisions of Section 102, as the same may be amended
      from time to time and the agreement that was signed between the Company and
      the
      Trustee (the “Trust
      Agreement”)
      are
      fully binding on the Optionee, and shall prevail in case of contradiction,
      over
      any other provision in this Agreement or in the Plan. Further, the Optionee
      agrees to execute and deliver, from time to time, any and all documents which
      the Company or the Trustee may reasonably determine to be necessary in order
      to
      comply with the Ordinance, and the rules and regulations promulgated thereunder,
      all as in effect from time to time.

    


    (b) The
      Optionee shall not to make any disposition of the Options or the Shares received
      upon exercise of such Options until the end of the Lockup Period. Should under
      any circumstances the Options, or the Shares issued upon the exercise thereof,
      be disposed of prior to the end of the Lockup Period, then, for Israeli tax
      purposes, the provisions of Section 102 relating to non-compliance with the
      Lockup Period, shall apply. 

    


    (c) The
      provisions of Section 102 and the rules and regulations promulgated thereunder,
      all as in effect from time to time relating to the allocation and exercise
      of
      options in the Section 102 capital gains track, shall apply to the Options
      granted hereunder.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Optionee
      hereby releases the Trustee, the Company and any Related Entity from any
      liability in respect of any action or decision duly taken with respect to the
      Plan, the Options or the Shares issued upon exercise of the
      Options.

    


    (e) The
      Options, and the Shares issued upon their exercise, will be held by the Trustee
      in trust on behalf of the Optionee for a period of at least 24 months from
      date
      such Options are allocated to the Trustee or such other period as may be
      required under the Ordinance or as may be approved by the Israeli tax
      authorities (the “Lockup
      Period”).
      

    


    (f) All
      rights related to the Options and the Shares issued upon their exercise will
      be
      held by the Trustee until the end of the Lock-up Period, including any bonus
      shares or dividends in respect thereof, and will be subject to the provisions
      of
      Section 102 regarding the capital gain track taxation thereunder.

     

    (g) Any
      and
      all taxes, fees and other liabilities (as may apply from time to time) in
      connection with the grant, the exercise, sale or other disposition of the
      Options or the Shares issued upon the exercise thereof, will be borne by the
      Optionee and Optionee shall be solely liable for all such taxes, fees and other
      liabilities. Furthermore, the Optionee hereby agrees to indemnify, defend and
      hold harmless the Company, any Related Entity and the Trustee and hold them
      harmless against and from any and all liability for any such tax or interest
      or
      penalty thereon.

     

    (h) In
      the
      event that the Company or the Trustee determines that it is
      required to withhold any tax as a result of the exercise of the Options, the
      Optionee, as a condition to the exercise of the Options, shall make arrangements
      satisfactory to the Company and the Trustee to enable them to satisfy
      all withholding requirements. The Optionee shall also make arrangements
      satisfactory to the Company to enable it to satisfy any withholding requirements
      that may arise in connection with the vesting or
      disposition of Shares purchased by exercising the Options.

    


    (i) Anything
      to the contrary notwithstanding, the Trustee shall not release any Options
      or
      any Shares issued upon exercise of the Options, prior to the full payment of
      the
      Exercise Price by the Optionee and payment by the Optionee of its’ tax liability
      arising from such Options or Shares issued upon exercise thereof or the
      Optionee's guarantee of payment of such taxes in a form reasonably acceptable
      to
      the Trustee and Company and in compliance with the Ordinance.

     

     

    4.  Exercise
      Schedule    Except
      as
      otherwise provided in Sections 7 or 10 of this Agreement, or in the Plan, the
      Option is exercisable in installments as provided below, which shall be
      cumulative. To the extent that the Option has become exercisable with respect
      to
      a percentage of Shares as provided below, the Option may thereafter be exercised
      by the Optionee, in whole or in part, at any time or from time to time prior
      to
      the expiration of the Option as provided herein. The Options shall vest over
      a
      period of four years from the Date of Grant, as follows (each date indicated
      referred to as a “Vesting Date”): One fourth (25%) of the Option shall vest one
      year after the Grant Date with the remaining three-fourths of the Option to
      vest
      in equal monthly amounts over the following thirty-six month period (2.08333%
      per month); in all cases, provided that the Continuous Service of the Optionee
      continues through and on the applicable Vesting Date.

     

    
      
        
        

      

      
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    Except
      as
      otherwise specifically provided herein, there shall be no proportionate or
      partial vesting in the periods prior to each Vesting Date, and all vesting
      shall
      occur only on the appropriate Vesting Date. Upon the termination of the
      Optionee’s Continuous Service with the Company and its Related Entities, any
      unvested portion of the Option shall terminate and be null and
      void.

     

    


     

    5.  Method
      of Exercise    (a) The
      vested portion of this Option shall be exercisable in whole or in part in
      accordance with the exercise schedule set forth in Section 4 hereof by written
      notice ("Exercise Notice") which shall state the election to exercise the
      Option, the number of Shares in respect of which the Option is being exercised,
      and such other representations and agreements as to the holder’s investment
      intent with respect to such Shares as may be required by the Company pursuant
      to
      the provisions of the Plan. Such Exercise Notice shall be signed by the Optionee
      and shall be delivered in person or by certified mail to the Secretary of the
      Company and the Trustee. The Exercise Notice to the Company shall be accompanied
      by payment of the Exercise Price. This Option shall be deemed to be exercised
      after both (i) receipt by the Company of such Exercise Notice accompanied by
      the
      Exercise Price and (ii) arrangements that are satisfactory to the Committee
      in
      its sole discretion have been made for Optionee’s payment to the Company of the
      amount, if any, that is necessary to be withheld in accordance with applicable
      Federal or state withholding requirements. After an Exercise Notice has been
      delivered to the Company (and the Trustee if relevant), it may not be rescinded
      or revised by the Optionee. 

     

     

    (b) As
      a
      condition to the exercise of any of the Options, (i) the Optionee shall sign
      any
      and all documents required by the Company, the Trustee or by applicable law,
      all
      as in effect from time to time, and (ii) together with the payment of the
      Exercise Price the Optionee shall deliver to the Company and Trustee proof,
      reasonably acceptable to the Company and Trustee, the all taxes due in respect
      of the grant and exercise of the Options have been paid to the relevant tax
      authorities, or Optionee has made adequate provision to guarantee that all
      such
      taxes will be paid on or before the date due therefore, to the satisfaction
      of
      the Company and Trustee in their sole discretion.

     

     

    (c) The
      Shares issuable upon the exercise of the Options shall be issued to, and in
      the
      name of Trustee, unless the Section 102 capital gain track permits the issuance
      of such Shares to the Optionee.

     

    


    (d) The
      Trustee will transfer the Shares to the Optionee upon the Optionee's demand,
      subject to compliance with the Plan, the Ordinance and this Agreement (including
      the Lockup Period). 

     

    
      
        
        

      

      
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    (e) No
      Shares
      will be issued pursuant to the Option unless and until such issuance and such
      exercise shall comply with all relevant provisions of applicable law, including
      the requirements of any stock exchange upon which the Shares then may be
      traded.

     

    6.  Method
      of Payment    Payment
      of the Exercise Price shall be by any of the following, or a combination
      thereof, at the election of the Optionee: (a) cash; (b) check; (c) with Shares
      that have been held by the Optionee for at least 6 months free and clear of
      any
      Lockup Period (or such other Shares as the Company determines will not cause
      the
      Company to recognize for financial accounting purposes a charge for compensation
      expense), (d) pursuant to a “cashless exercise” procedure, by delivery of a
      properly executed exercise notice together with such other documentation, and
      subject to such guidelines, as the Committee shall require to effect an exercise
      of the Option and delivery to the Company by a licensed broker acceptable to
      the
      Company of proceeds from the sale of Shares or a margin loan sufficient to
      pay
      the Exercise Price and any applicable income or employment taxes, (e) awards
      granted under other plans of the Company or a Related Entity, or other property
      (including notes or other contractual obligations of Participants to make
      payment on a deferred basis provided that such deferred payments are not in
      violation of the Sarbanes-Oxley Act of 2002, or any rule or regulation adopted
      thereunder or any other applicable law) or (f) such other consideration or
      in
      such other manner as may be determined by the Committee in its absolute
      discretion.

     

    7.  Termination
      of Option

     

    (a)  Any
      unexercised portion of the Option shall automatically and without notice
      terminate and become null and void at the time of the earliest to occur of
      the
      following:

     

    (i)  unless
      the Committee otherwise determines in writing in its sole discretion, three
      months after the date on which the Optionee’s Continuous Service with the
      Company and its Related Entities is terminated for any reason other than by
      reason of (A) termination of the Optionee’s Continuous Service by the Company or
      a Related Entity for Cause, (B) a Disability of the Optionee as determined
      by a
      medical doctor satisfactory to the Committee, or (C) the Optionee's
      death;

     

    (ii)  immediately
      upon the termination of the Optionee’s Continuous Service with the Company and
      its Related Entities for Cause;

     

    (iii)  twelve
      months after the date on which the Optionee’s Continuous Service with the
      Company and its Related Entities is terminated by reason of a Disability as
      determined by a medical doctor satisfactory to the Committee;

     

    (iv)  twelve
      months after the date of termination of the Optionee’s Continuous Service with
      the Company and its Related Entities by reason of the death of the Optionee
      (or,
      if later, three months after the date on which the Optionee shall die if such
      death shall occur during the one year period specified in paragraph (iii) of
      this Section 7);
      or


     

    (v)  the
      sixth
      anniversary of the Date of Grant.

     

    
      
        
        

      

      
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    (b)  In
      the
      event of any merger, consolidation or other reorganization in which the Company
      does not survive, or in the event of any Change in Control, any outstanding
      Option may be dealt with in accordance with any of the following approaches,
      as
      determined by the agreement effectuating the transaction or, if and to the
      extent not so determined, as determined by the Committee: (a) the continuation
      of the outstanding Option by the Company, if the Company is a surviving
      corporation, (b) the assumption or substitution for the outstanding Option
      by
      the surviving corporation or its parent or subsidiary, (c) full exercisability
      or vesting and accelerated expiration of the outstanding Option, or (d)
      settlement of the value of the outstanding Option in cash or cash equivalents
      or
      other property followed by cancellation of such Awards (which value, in the
      case
      of Options, shall be measured by the amount, if any, by which the Fair Market
      Value of a Share exceeds the exercise or grant price of the Option as of the
      effective date of the transaction). The Committee shall give written notice
      of
      any proposed transaction referred to in this Section a reasonable period of
      time
      prior to the closing date for such transaction (which notice may be given either
      before or after the approval of such transaction), in order that the Optionee
      may have a reasonable period of time prior to the closing date of such
      transaction within which to exercise any Option that are then exercisable
      (including any Options that may become exercisable upon the closing date of
      such
      transaction). The Optionee may condition his or her exercise of any Option
      upon
      the consummation of the transaction. The treatment of any outstanding Options
      in
      the event of any merger, consolidation or other reorganization in which the
      Company does not survive, or in the event of any Change in Control shall comply
      with all applicable law, including the Ordinance.

     

    8.  Transferability    Unless
      otherwise determined by the Committee in compliance with applicable law, the
      Option granted hereby is not transferable otherwise than by will or under the
      applicable laws of descent and distribution, and during the lifetime of the
      Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s
      guardian or legal representative. In addition, the Option shall not be assigned,
      negotiated, pledged or hypothecated in any way (whether by operation of law
      or
      otherwise), and the Option shall not be subject to execution, attachment or
      similar process. Upon any attempt to transfer, assign, negotiate, pledge or
      hypothecate the Option, or in the event of any levy upon the Option by reason
      of
      any execution, attachment or similar process contrary to the provisions hereof,
      the Option shall immediately become null and void. The terms of this Option
      shall be binding upon the executors, administrators, heirs, successors and
      assigns of the Optionee. 

     

    9.  No
      Rights of Stockholders    Neither
      the Optionee nor any personal representative (or beneficiary) shall be, or
      shall
      have any of the rights and privileges of, a stockholder of the Company with
      respect to any shares of Stock purchasable or issuable upon the exercise of
      the
      Option, in whole or in part, prior to the date of exercise of the
      Option.

     

    10.  Acceleration
      of Exercisability of Option

     

    (a)  This
      Option shall become immediately fully exercisable in the event that, prior
      to
      the termination of the Option pursuant to Section 7 hereof, and during the
      Optionee's Continuous Service, there is a “Change in Control”, as defined in
      Section 9 of the Plan.

     

    
      
        
        

      

      
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    (b)  Notwithstanding
      the foregoing, if in the event of a Change in Control the successor company
      assumes or substitutes for this Option, then each outstanding Option shall
      not
      be accelerated as described above. For the purposes of this Section 10(b),
      an
      Option shall be considered assumed or substituted for if following the Change
      in
      Control the award confers the right to purchase or receive, for each Share
      subject to the Option immediately prior to the Change in Control, the
      consideration (whether stock,
      cash or
      other securities or property) received in the transaction constituting a Change
      in Control by holders of Shares for each Share held on the effective date of
      such transaction (and if holders were offered a choice of consideration, the
      type of consideration chosen by the holders of a majority of the outstanding
      shares); provided, however, that if such consideration received in the
      transaction constituting a Change in Control is not solely common stock of
      the
      successor company or its parent or subsidiary, the Committee may, with the
      consent of the successor company or its parent or subsidiary, provide that
      the
      consideration to be received upon the exercise or vesting of an Option, for
      each
      Share subject thereto, will be solely common stock of the successor company
      or
      its parent or subsidiary substantially equal in fair market value to the per
      share consideration received by holders of Shares in the transaction
      constituting a Change in Control. The determination of such substantial equality
      of value of consideration shall be made by the Committee in its sole discretion
      and its determination shall be conclusive and binding.

     

    11.  Miscellaneous
      Provisions

     

    (a)  No
      Right to Continued Employment.
      Neither
      the Option nor this Agreement shall confer upon the Optionee any right to
      continued employment or service with the Company or any Related
      Entity.

     

    (b)  Law
      Governing.
      This
      Agreement shall be governed in accordance with and governed by the internal
      laws
      of the State of Delaware.

     

    (c)  Entire
      Agreement.Subject
      to the provisions of the Plan and the Ordinance, this Agreement, together with
      the exhibits hereto, constitute the entire agreement between the Optionee and
      the Company with respect to the Options granted hereunder, and with respect
      to
      all options to purchase shares in the Company which have not yet been actually
      issued or granted, and that any agreement, arrangement or understanding as
      aforesaid is null and void and of no further force or effect., and the
      provisions of the Plan and the Ordinance, and this Agreement, together with
      the
      exhibits hereto, supersede all prior agreements, understandings and
      arrangements, oral or written, between the Optionee, the Company and any Related
      Entity with respect to the subject matter hereof.

     

    (d)  Interpretation
      / Provisions of Plan Control.
      This
      Agreement is subject to all the terms, conditions and provisions of the Plan,
      including, without limitation, the amendment provisions thereof, and to such
      rules, regulations and interpretations relating to the Plan adopted by the
      Committee as may be in effect from time to time. If and to the extent that
      this
      Agreement conflicts or is inconsistent with the terms, conditions and provisions
      of the Plan, the Plan shall control, and this Agreement shall be deemed to
      be
      modified accordingly. This Agreement is further subject to the Ordinance and
      if
      and to the extent that the Plan or this Agreement conflict or are inconsistent
      with the Ordinance, then the Ordinance shall control, The Optionee accepts
      the
      Option subject to all the terms and provisions of the Plan and this Agreement.
      The undersigned Optionee hereby accepts as binding, conclusive and final all
      decisions or interpretations of the Committee upon any questions arising under
      the Plan and this Agreement, unless shown to have been made in an arbitrary
      and
      capricious manner.

     

    
      
        
        

      

      
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    (e)  The
      Optionee acknowledges that the Company may issue additional shares of capital
      stock and to issue additional options to purchase stock in the future to various
      entities and individuals, as the Company in its sole discretion shall
      determine.

     

     

    (f)  Notices.
      Any notice under this Agreement shall be in writing and shall be deemed to
      have
      been duly given (i)
      by
      registered or certified mail, postage prepaid, return receipt requested,
      effective 7 days after posting, (ii) by confirmed fax, effective on the next
      business day in recipient’s location, or (iii) by messenger or courier,
      effective upon receipt.
      The
      address of the Company shall be the Company’s Secretary at 237 West
      35th
      Street,
      Suite 1101, New York, NY 10001, or if the Company should move its principal
      office, to such principal office, and, in the case of the Optionee, to the
      Optionee’s last permanent address as shown on the Company’s records, subject to
      the right of either party to designate some other address at any time hereafter
      in a notice satisfying the requirements of this Section. 

     

    (g)  Tax
      Consequences.
      THE
      RECEIPT OF THIS OPTION GRANT AND THE EXERCISE OF SUCH OPTIONS MAY BE SUBJECT
      TO
      TAX OR EXEMPT FORM TAX THE UNITED STATES OR ISRAEL. OPTIONEE SHOULD CONSULT
      WITH
      HIS/HER TAX ADVISOR IN ADVANCE CONCERNING THE RAMIFICATIONS TO OPTIONEE OF
      RECEIVING, HOLDING OR EXERCISING THE OPTIONS OR HOLDING OR SELLING THE SHARES
      UNDERLYING SUCH OPTIONS. 

     

    (i) This
      Agreement shall bind and inure to the benefit of the parties hereto and the
      successors and assigns of the Company and, to the extent provided in the Plan,
      Optionee's executors, administrators, legatees and heirs.

     

    (j) The
      failure of any party to enforce at any time any provisions of this Agreement
      or
      the Plan shall in no way be construed to be a waiver of such provision or of
      any
      other provision hereof.

     

     

    (k) This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall constitute one and
      the
      same Agreement.

    


     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the undersigned have executed this Agreement as of the [ ]
      day
      of [ ], [        ].

     

    
      	 	 	 
	 	
              COMPANY:

               

              ANSWERS
                CORPORATION

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
[                       
              ]
	 	 


    

           

     

     

    The
      Optionee acknowledges receipt of a copy of the Plan and represents that he
      or
      she has reviewed the provisions of the Plan and this Option Agreement in their
      entirety, is familiar with and understands their terms and provisions and is
      familiar with Section 102, as defined in the Plan, and hereby accepts this
      Option subject to all of the terms and provisions of the Plan and the Option
      Agreement. The Optionee further represents that he or she has had an opportunity
      to obtain the advice of counsel prior to executing this Option
      Agreement.

     

     

     

    
      
        	Dated:________________________________	 	 
	 	
                 OPTIONEE:

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                
[                       
                ]
	 	 


      

             

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

     

    The
      following terms shall have the meanings indicated:

     

    1. “Cause”
      shall mean a felony conviction
      by a court of law (which guilty verdict is sustained on final appeal) in
      connection with and limited to his services to the Company or a Related Entity,
      or pleading guilty to or no contest to a felony involving fraud, embezzlement,
      misappropriation of funds in connection with and limited to his services to
      the
      Company or a Related Entity. Any termination for Cause shall be made in writing
      to the Optionee, which notice shall set forth in detail all acts or omissions
      upon which the Company is relying for such termination.