Unassociated Document


    

      ANSWERS
        CORPORATION

      INCENTIVE
        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 an Incentive
        Stock
        Option, and not a Non-Qualified Stock Option. The Optionee hereby acknowledges
        receipt of a copy of the Plan and agrees to be bound by all of the terms
        and
        conditions hereof and thereof and all applicable laws and
        regulations.

       

      2.  Definitions    Unless
        otherwise provided herein, 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.  Exercise
        Schedule       Except
        as
        otherwise provided in Sections 6 or 9 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.

       

      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.

       

      4.  Method
        of Exercise    The
        vested portion of this Option shall be exercisable in whole or in part in
        accordance with the exercise schedule set forth in Section 3 hereof by written
        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 written notice shall be signed by the Optionee and shall be
        delivered in person or by certified mail to the Secretary of the Company.
        The
        written notice shall be accompanied by payment of the Exercise Price. This
        Option shall be deemed to be exercised after both (a) receipt by the Company
        of
        such written notice accompanied by the Exercise Price and (b) 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. 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.

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      5.  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 (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.

       

      6.  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 6);
        or


       

      
        
           

        

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

       

      (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.

       

      7.  Transferability    Unless
        otherwise determined by the Committee, 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. 

       

      8.  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.

       

      9.  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 6 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 9(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.

       

      10.  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.

       

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

       

      (c)  Incentive
        Stock Option Treatment.
        The
        terms of this Option shall be interpreted in a manner consistent with the
        intent
        of the Company and the Optionee that the Option qualify as an Incentive Stock
        Option under Section 422 of the Code. If any provision of the Plan or this
        Agreement shall be impermissible in order for the Option to qualify as an
        Incentive Stock Option, then the Option shall be construed and enforced as
        if
        such provision had never been included in the Plan or the Option. If and
        to the
        extent that the number of Options granted pursuant to this Agreement exceeds
        the
        limitations contained in Section 422 of the Code on the value of Shares with
        respect to which this Option may qualify as an Incentive Stock Option, this
        Option shall be a Non-Qualified Stock Option.

       

      (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. 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)  Notices.
        Any
        notice under this Agreement shall be in writing and shall be deemed to have
        been
        duly given when delivered personally or when deposited in the United States
        mail, registered, postage prepaid, and addressed, in the case of the Company,
        to
        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.

       

      (f)  Tax
        Consequences.
        Set
        forth below is a brief summary as of the date of this Option Agreement of
        some
        of the federal tax consequences of exercise of this Option and disposition
        of
        the Shares, that are applicable if and to the extent that the Option qualifies
        as an Incentive Stock Option. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
        THE
        TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT
        A
        TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
        SHARES.

       

      (i)  The
        Optionee will not recognize any income as a result of the grant of the Option
        or
        his exercise of the Option. The amount by which the Fair Market Value of
        the
        Shares on the date of exercise exceeds the Exercise Price is, however, an
        item
        of adjustment for purposes of determining the Optionee’s alternative minimum
        tax, if any, for the year in which the Option is exercised. 

       

      (ii)  Upon
        the
        Optionee’s exercise of the Option, his tax basis in the Shares received will be
        equal to the Exercise Price paid.

       

      (iii)  Upon
        a
        sale of the Shares acquired upon exercise of the Option, provided the holding
        period requirements described below are met, the difference between the amount
        realized from the sale and the Exercise Price is treated as a long-term capital
        gain or loss.

       

      The
        foregoing rules differ, however, if the Optionee disposes of the Shares acquired
        pursuant to the exercise of the Incentive Stock Option prior to the later
        of (i)
        two years from the date the Option was granted, and (ii) one year from the
        date
        the Option was exercised. In the event of such a disposition (referred to
        as a
“disqualifying disposition”), the tax consequences relating to the Option would
        be as follows:

       

      (i)  The
        Optionee would not recognize any income as a result of the grant or exercise
        of
        the Option.

       

      (ii)  Upon
        the
        disqualifying disposition, the Optionee would recognize ordinary income equal
        to
        the lesser of (A) the amount by which the Fair Market Value of the Shares
        on the
        date of exercise exceeds the Exercise Price paid, and (B) the actual gain
        on the
        sale of the Shares. Under current law, the amount so recognized is not subject
        to federal tax withholding or employment taxes.

       

      
        
           

        

        
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      (iii)  The
        amount by which the amount realized from the sale of the Shares differs from
        the
        Fair Market Value of the Shares on the date of exercise would be taxable
        to the
        Optionee as a capital gain or loss.

       

      (iv)  The
        amount of the Optionee’s capital gain or loss would be long-term or short-term
        depending upon whether the Optionee held the Shares for more than one year
        from
        the date of his exercise of the Option.

       

      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
        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:  	 
	 	
                
[                       
                ]
	 


      

      


      
        
           

        

        
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      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 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. 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.