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Exhibit
10.38 

 
 

AMENDED CHANGE IN CONTROL AGREEMENT    
  

    This Amended Change in Control Agreement ("Agreement") is made and entered into as of the last date written below, between            ("Executive")
and
NBC Internet, Inc., (the "Company"), and amends and supersedes the Change in Control Agreement between Executive and the Company dated            ("Change in Control Agreement").

    WHEREAS, the Company and Executive entered into an offer letter employment agreement (the "Employment Agreement"), a copy of which is
attached hereto as Exhibit A; 

    WHEREAS, the Company and Executive desire to amend the Employment Agreement in order to provide Executive with certain benefits in the
event his employment is terminated without Cause or he resigns for Good Reason; and 

    WHEREAS, the Company and Executive entered into the Change in Control Agreement and desire to amend said agreement, as set forth
herein; 

    NOW, THEREFORE, in consideration of Executive's continued employment with the Company, it is hereby agreed by and between the parties
that the Employment Agreement is amended by adding the following provisions, which shall be effective immediately: 

	Severance Benefits:	 	In the event that either (i) Executive's employment is terminated without Cause (as defined below) by the Company (including any successor to the Company), or (ii) Executive voluntarily terminates his employment
with the Company (including any successor to the Company) for Good Reason (as defined below), Executive will become fully vested as of the date of termination of his employment ("Termination Date") in all then unvested stock option shares granted to
Executive by the Company (the "Acceleration"), and shall receive, as severance, the equivalent of     months of Executive's Base Salary (as defined below) in effect as of the Termination Date, subject to standard payroll
deductions and withholdings (the "Severance"). As a precondition of receiving the Acceleration and the Severance, Executive must first sign a general release of claims in favor of the Company, which release shall be in a form acceptable to the
Company.
	
Cause Defined:	
 	

For the purposes of this Agreement, the termination of Executive's employment will be considered a termination for "Cause" if Executive is terminated because of any of the following: (a) his indictment or conviction (including a no contest or
guilty plea) of any felony or of any crime involving dishonesty or moral turpitude; (b) his participation in a fraud or dishonesty against the Company; (c) the material breach of his duties to the Company, including insubordination,
misconduct, excessive absenteeism, or persistent unsatisfactory performance of his job duties; (d) his intentional damage to, or willful misappropriation of, any property of the Company; (e) the material breach of any written agreements
with the Company; or (f) his conduct that demonstrates gross unfitness to serve. The Company's designation of Executive's termination as for Cause (or not) under Sections (b) through (f) above shall be made in the good faith and
reasonable determination of the Company's Chief Executive Officer ("CEO") and the Compensation Committee of the Company's Board of Directors (the "Compensation Committee").

1

 

	
Good Reason Defined:	
 	

For the purposes of this Agreement, the voluntary termination by Executive of his employment will be considered a termination for "Good Reason" if Executive resigns his employment because any of the following occur: (a) the Company assigns to
Executive any duties or responsibilities that result in a material diminution or adverse change of Executive's position or responsibilities, taken as a whole; (b) the Company reduces Executive's Base Salary (as defined below); (c) the
Company reduces the benefits Executive is eligible to receive under the Company's benefit plans as of the date of this Agreement (the "Benefit Plans"); or (d) the Company requires Executive to relocate to an office or facility that is more than
thirty-five (35) miles from the location at which Executive regularly performs his duties as of the date of this Agreement, except for required travel by Executive on Company business; provided, however, that Good Reason shall not exist under
Section (c) above if the Company offers a range of benefit plans and programs which, taken as a whole, are comparable to the Benefit Plans provided to Executive as of the date of this Agreement, as determined in good faith by the Company.
Designation of Executive's termination as for Good Reason under Section (a) above shall require the mutual agreement of Executive, the CEO and the Compensation Committee.
	
Base Salary Defined:	
 	

For purposes of this Agreement, Base Salary means base salary paid to Executive (including all amounts elected to be deferred that would otherwise have been paid, under any cash or deferred arrangement established by the Company), including bonuses
and commissions, but excluding other remuneration paid directly to Executive, such as profit sharing, the cost of employee benefits paid for by the Company, education or tuition reimbursements, imputed income arising under any Company group insurance
or benefits program, traveling expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company under any employee benefit plan, and similar items of compensation.
	
Parachute Payments:	
 	

If any payment or benefit you would receive under this Agreement ("Payment") would (i) constitute "parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, (the "Code"), or any comparable
successor provision, and (ii) but for this section would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provision (the "Excise Tax"), then Executive's benefits hereunder shall be either

        (i)    provided to you in full, or

        (ii)    provided to you as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax,

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whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by you, on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. Unless you and the Company otherwise agree in writing, any determination required under this section shall be made in writing
in good faith by a qualified third party (the "Professional Service Firm") selected by the Company. In the event of a reduction of benefits hereunder, benefits payable in cash shall be reduced first. For purposes of making the calculations required
by this section, the Professional Service Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal
authority. You and the Company shall furnish to the Professional Service Firm such information and documents as the Professional Service Firm may reasonably request in order to make a determination under this section. The Company shall bear all costs
the Professional Service Firm may reasonably incur in connection with any calculations contemplated by this section.
	

 	
 	

If, notwithstanding any reduction described in this section, the IRS determines that you are liable for the Excise Tax as a result of the receipt of the payment of benefits as described above, then you shall be obligated to pay back to the Company,
within thirty (30) days after a final IRS determination or in the event that you challenge the final IRS determination, a final judicial determination, a portion of the payment equal to the "Repayment Amount." The Repayment Amount with respect
to the payment of benefits shall be the smallest such amount, if any, as shall be required to be paid to the Company so that your net after-tax proceeds with respect to any payment of benefits (after taking into account the payment of the Excise Tax
and all other applicable taxes imposed on such payment) shall be maximized. The Repayment Amount with respect to the payment of benefits shall be zero if a Repayment Amount of more than zero would not result in your net after-tax proceeds with
respect to the payment of such benefits being maximized. If the Excise Tax is not eliminated pursuant to this paragraph, you shall pay the Excise Tax.
	

 	
 	

Notwithstanding any other provision of this Parachute Payments Section, if (i) there is a reduction in the payment of benefits as described in this section, (ii) the IRS later determines that you are liable for the Excise Tax, the payment
of which would result in the maximization of your net after-tax proceeds (calculated as if your benefits had not previously been reduced), and (iii) you pay the Excise Tax, then the Company shall pay to you those benefits which were reduced
pursuant to this section contemporaneously or as soon as administratively possible after you pay the Excise Tax so that your net after-tax proceeds with respect to the payment of benefits is maximized.

    Except
as provided herein, the terms of the Employment Agreement remain in full force and effect. 

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    IN WITNESS WHEREOF, the parties have executed this Agreement on dates written below. 

	NBC Internet, Inc.	 	

	

By:	
 	

 	
 	

 	
 	

 
	 	 	
Will Lansing

Chief Executive Officer	 	

	

Dated:	
 	

 	
 	

Dated:	
 	

 
	 	 	
	 	 	 	

4

 
EXHIBIT A
   OFFER LETTER EMPLOYMENT AGREEMENT  

5

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AMENDED CHANGE IN CONTROL AGREEMENTPrepared by MERRILL CORPORATION

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CIRCA COMMUNICATIONS LTD.  

 STOCK OPTION PLAN  

 September 11, 2000  

  
 

    TABLE OF CONTENTS    
  

	 
	 	 
	 	Page

	ARTICLE 1 DEFINITIONS AND INTERPRETATION	 	1
	 	1.1	 	Definitions	 	1
	 	1.2	 	Choice of Law	 	2
	 	1.3	 	Headings	 	2
	ARTICLE 2 PURPOSE AND PARTICIPATION	 	3
	 	2.1	 	Purpose	 	3
	 	2.2	 	Participation	 	3
	 	2.3	 	Notification of Award	 	3
	 	2.4	 	Copy of Plan	 	3
	 	2.5	 	Limitation	 	3
	ARTICLE 3 TERMS AND CONDITIONS OF OPTIONS	 	3
	 	3.1	 	Board to Issue Shares	 	3
	 	3.2	 	Number of Shares	 	3
	 	3.3	 	Term of Option	 	4
	 	3.4	 	Termination of Option	 	4
	 	3.5	 	Power of Attorney	 	6
	 	3.6	 	Exercise Price	 	6
	 	3.7	 	Additional Terms	 	7
	 	3.8	 	Assignment of Options	 	7
	 	3.9	 	Adjustments	 	7
	 	3.10	 	Vesting	 	7
	 	3.11	 	Shareholders' Agreement	 	7
	ARTICLE 4 EXERCISE OF OPTION	 	8
	 	4.1	 	Exercise of Option	 	8
	 	4.2	 	Issue of Share Certificates	 	8
	 	4.3	 	Condition of Issue	 	8
	ARTICLE 5 ADMINISTRATION	 	8
	 	5.1	 	Administration	 	8
	 	5.2	 	Interpretation	 	8
	ARTICLE 6 AMENDMENT, TERMINATION AND NOTICE	 	9
	 	6.1	 	Prospective Amendment	 	9
	 	6.2	 	Retrospective Amendment	 	9
	 	6.3	 	Approvals	 	9
	 	6.4	 	Termination	 	9
	 	6.5	 	Agreement	 	9
	 	6.6	 	Notice	 	9

STOCK OPTION PLAN  

 
 

ARTICLE 1
  DEFINITIONS AND INTERPRETATION    
  

1.1  Definitions

As
used herein, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the meanings set forth below: 

	(a)
	"Administrator"
means, initially, the Secretary of the Company and thereafter shall mean such director or other senior officer or employee of the Company as may be designated as
Administrator by the Board from time to time.

	(b)
	"Award
Date" means:

	(i)
	with
respect to any Employee or Director that the Company agreed to grant an Option to on such Employee's first day of employment with the Company
or such Director's first day on the board of directors of the Company, prior to adoption of the Plan, the date on which the Company agreed to grant the Option to the Employee or Director; or

	(ii)
	with
respect to any other Employee or Director of the Company, or any Option not otherwise covered by paragraph 1.1(b)(i), the date on which the
Board awards a particular Option. 

	(c)
	"Board"
means the board of directors of the Company, or any committee thereof to which the board of directors of the Company has delegated the power to administer and grant Options
under the Plan.

	(d)
	"Cashless
Exercise Units" shall have the meaning given to that term under subparagraph 3.4(e).

	(e)
	"Cause"
means:

	(i)
	Cause
as such term is defined in the written employment agreement between the Company and the Employee; or

	(ii)
	in
the event there is no written employment agreement between the Company and the Employee or Cause is not defined therein, the usual meaning of
just cause under the common law or the laws of British Columbia. 

	(f)
	"Company"
means Circa Communications Ltd.

	(g)
	"Director"
means any individual holding the office of director of the Company.

	(h)
	"Employee"
means any individual regularly employed on a full-time basis by the Company or any of its subsidiaries and such other individuals, such as service providers or
consultants, as may, from time to time, be permitted by the rules and policies of the applicable Regulatory Authorities to be granted Options as employees or as an equivalent thereto.

	(i)
	"Exercise
Notice" means the notice respecting the exercise of an Option, in the form set out as Schedule "B" hereto, duly executed by the Option Holder.

	(j)
	"Exercise
Period" means the period during which a particular Option may be exercised and is the period from and including the Award Date through to and including the Expiry Date.

	(k)
	"Exercise
Price" means the price at which an Option may be exercised as determined in accordance with paragraph 3.6.

	(l)
	"Expiry
Date" means the date determined in accordance with paragraph 3.3 and after which a particular Option cannot be exercised.

	(m)
	"IPO"
means the offering and sale to the public of securities of the Company in connection with which the securities of the Company are listed or quoted on an organized trading
facility. 

 
	(n)
	"Market
Value" means the market value of the Company's Shares as determined in accordance with paragraph 3.6.

	(o)
	"New
Option" shall have the meaning given to that term under subparagraph 3.4(e).

	(p)
	"Offeror"
means the person making a Third Party Offer.

	(q)
	"Option"
means an option to acquire Units, awarded to a Director or Employee pursuant to the Plan.

	(r)
	"Option
Certificate" means the certificate, in the form set out as Schedule "A" hereto, evidencing an Option.

	(s)
	"Option
Holder" means a Director or Employee, or former Director or Employee, who holds an unexercised and unexpired Option or, where applicable, the Personal Representative of such
person.

	(t)
	"Plan"
means this stock option plan.

	(u)
	"Personal
Representative" means:

	(i)
	in
the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having
jurisdiction to do so; and

	(ii)
	in
the case of an Option Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such
Option Holder. 

	(v)
	"Regulatory
Authorities" means all stock exchanges and other organized trading facilities on which the Company's Shares are listed and all securities commissions or similar
securities regulatory bodies having jurisdiction over the Company.

	(w)
	"Share"
or "Shares" means, as the case may be, one or more Class A Voting Common Shares, Class B Non-voting Common Shares, Class C Convertible Voting Common
Shares, Class D Convertible Non-voting Common Shares, Class E Preferred Non-voting shares and Class F Preferred Non-voting shares in the capital of the Company.

	(x)
	"Termination
Date" means:

	(i)
	in
the case of the resignation of the Option Holder as an Employee of the Company, the date that the Option Holder provides notice of his or her
resignation as an Employee of the Company to the Company; or

	(ii)
	in
the case of the termination of the Option Holder's employment with the Company by the Company for any reason other than death or disability, the
date that the Company delivers written notice of termination of the Option Holder's employment to the Option Holder. 

	(y)
	"Third
Party Offer" means a bona fide offer from a third party to purchase all of the Shares of the Company that is received prior to the completion of the IPO.

	(z)
	"Unit"
means one Class A Voting Common Share and one Class B Non-voting Common Share, each without par value, in the capital of the Company and "Units" means more than
one Unit. 

1.2  Choice of Law

The
Plan is established under, and the provisions of the Plan shall be subject to and interpreted and construed in accordance with, the laws of the Province of British Columbia. 

1.3  Headings

The
headings used herein are for convenience only and are not to affect the interpretation of the Plan. 

2

 
 
 

ARTICLE 2
  PURPOSE AND PARTICIPATION    
  

2.1  Purpose

The
purpose of the Plan is to provide the Company with a share-related mechanism to attract, retain and motivate qualified Directors and Employees, to reward such of those Directors and Employees as
may be awarded Options under the Plan by the Board from time to time for their contributions toward the long term goals of the Company and to enable and encourage such Directors and Employees to
acquire Units as long term investments. 

2.2  Participation

The
Board shall, from time to time and in its sole discretion, determine those Directors and Employees, if any, to whom Options are to be awarded. The Board may, in its sole discretion, grant the
majority of the Options to insiders of the Company. 

2.3  Notification of Award

Following
the approval by the Board of the awarding of an Option, the Administrator shall notify the Option Holder in writing of the award and shall enclose with such notice the Option Certificate
representing the Option so awarded. 

2.4  Copy of Plan

Each
Option Holder, concurrently with the notice of the award of the Option, shall be provided with a copy of the Plan. A copy of any amendment to the Plan shall be promptly provided by the
Administrator to each Option Holder. 

2.5  Limitation

The
Plan does not give any Option Holder that is a Director the right to serve or continue to serve as a Director of the Company nor does it give any Option Holder that is an Employee the right to be
or to continue to be employed by the Company. 

 
 

ARTICLE 3
  TERMS AND CONDITIONS OF OPTIONS    
  

3.1  Board to Issue Shares

The
Class A Voting Common Shares and Class B Non-voting Common Shares to be issued to Option Holders upon the exercise of Options shall be authorized and unissued Class A Voting
Common Shares and Class B Non-voting Common Shares the issuance of which shall have been authorized by the Board. 

3.2  Number of Shares

Subject
to adjustment as provided for in paragraph 3.9 of the Plan, (i) the number of Class A Voting Common Shares which shall be available for Directors and Employees to acquire
pursuant to Options granted under the Plan shall not exceed 35,000 Class A Voting Common Shares; and (ii) the number of Class B Non-voting Common Shares which shall be available
for Directors and Employees to acquire pursuant to Options granted under the Plan shall not exceed 35,000 Class B Non-voting Common Shares. If any Option expires or otherwise terminates for any reason
without having been exercised in full, the number of Class A Voting Common Shares and Class B Non-voting Common Shares in respect of which the Option was not exercised shall again be
available for the purposes of the Plan. 

3

 

3.3  Term of Option

Subject
to paragraph 3.4, the Expiry Date of an Option shall be the date so fixed by the Board, provided that, notwithstanding anything else contained in the Plan, such date shall be no later than the
tenth anniversary of the Award Date of such Option. 

3.4  Termination of Option

Subject
to such other terms or conditions that may be attached to Options granted hereunder, an Option Holder may exercise an Option in whole or in part at any time or from time to time during the
Exercise Period. Any Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no effect as of 5:00 p.m. local time in Vancouver, British
Columbia on the Expiry Date. The Expiry Date of an Option shall be the earlier of the date so fixed by the Board and the date established, if applicable, in subparagraphs (a) to
(f) below: 

	(a)
	Death

In
the event that the Option Holder should die while he or she is a Director (if he or she holds his or her Option as a Director) or Employee (if he or she holds his or her Option as an Employee), the
Expiry Date for any vested portion of the Option shall be the date which is 12 months after the date of the Option Holder's death. The Expiry Date for any unvested portion of the Option shall be the
date of the Option Holder's death. In no case shall the right to purchase Units under an Option vest after the date of the Option Holder's death. 

	(b)
	Disability

In
the event that the Option Holder becomes permanently disabled while he or she is a Director (if he or she holds his or her Option as a Director) or Employee (if he or she holds his or her Option as
an Employee) and ceases to be a Director or Employee as a result of the permanent disability, the Expiry Date for any vested portion of the Option shall be the date which is 12 months after the date
that the Option Holder ceases to be an Employee or a Director, as the case may be. The Expiry Date for any unvested portion of the Option shall be the date that the Option Holder ceases to be an
Employee or Director, as the case may be. In no case shall the right to purchase Units under an Option vest after the date that the Option Holder ceases to be an Employee or Director, as the case may
be. 

	(c)
	Ceasing to hold Office

In
the event that the Option Holder holds his or her Option as a Director of the Company and such Option Holder ceases to be a Director of the Company other than by reason of death or permanent
disability, the Expiry Date for any vested portion of the Option shall be, unless otherwise provided for in the Option Certificate, the 30th day following the date the Option Holder ceases to be a
Director of the Company unless the Option Holder ceases to be a Director of the Company as a result of: 

	(i)
	ceasing
to meet the qualifications required under applicable laws;

	(ii)
	being
removed from office in accordance with applicable laws; or

	(iii)
	an
order made by any Regulatory Authority having jurisdiction to so order, 

in
which case the Expiry Date shall be the date the Option Holder ceases to be a Director of the Company. The Expiry Date for any unvested portion of the Option shall be the date the Option Holder
ceases to be a Director of the Company. In no case shall the right to purchase Units under an Option vest after the date that the Option Holder ceases to be a Director of the Company. 

4

 

	(d)
	Ceasing to be Employed

In
the event that the Option Holder holds his or her Option as an Employee of the Company and such Option Holder ceases to be an Employee of the Company other than by reason of death or permanent
disability, the Expiry Date of any vested portion of the Option shall be the 90th day following the Termination Date unless the Option Holder ceases to be an Employee of the Company as a result of: 

	(i)
	termination
for Cause; or

	(ii)
	an
order made by any Regulatory Authority having jurisdiction to so order, 

in
which case the Expiry Date shall be the Termination Date. The Expiry Date for any unvested portion of the Option shall be the Termination Date. In no case shall the right to purchase Units under an
Option vest after the Termination Date. 

	(e)
	Initial Public Offering

Prior
to completion of the IPO, the Company may send a notice to the Option Holder advising the Option Holder that the unvested portion or portions of the Option Holder's Option, if any, shall
immediately vest and that the Company is electing on the Option Holder's behalf to undertake a cashless exercise of the Option as follows: 

	(i)
	the
Option Holder shall receive from the Company, without payment of any consideration, that number of Units (the "Cashless Exercise Units") that is
equal to the quotient of: 

  X
(IPO Price - Exercise Price)  

IPO Price 

where
"X" shall be the number of Units in respect of which the Option is being exercised and the "IPO Price" shall be the purchase price of the Shares under the IPO; and 

	(ii)
	the
Company may also elect, in its sole discretion, to grant to the Option Holder an Option (the "New Option") to purchase a number of Units that
is equal to X minus the number of Cashless Exercise Units, for a purchase price equal to the IPO Price. The New Option shall, to the extent permitted by applicable laws, be equivalent to the Option
exercised by the Company. Without limiting the foregoing, the right to purchase Units under the New Option shall vest in the same proportions and on the same dates that the unvested portion or
portions of the Option exercised by the Company would otherwise have vested. 

If
in connection with the IPO, the Regulatory Authorities or the underwriter require that the Units purchased or received upon the exercise of the Option be deposited in pool or escrow, the Option
Holder shall deposit such Units in pool or escrow on such terms as may be required by the Regulatory Authorities or the underwriter. 

	(f)
	Third Party Offer

If
a Third Party Offer is received that is approved by the Board and accepted by shareholders of the Company holding not less than 662/3% of the Shares, the Company may send a notice to
the Option Holder advising the Option Holder that: 

	(i)
	the
unvested portion or portions of the Option Holder's Option, if any, shall immediately vest and that the Expiry Date of the Option held by the
Option Holder shall be the 20th day following the date of the notice. If the transaction contemplated by the Third Party Offer does not close, the Company shall, upon the request of an Option Holder
to the extent permitted by applicable laws, grant to the Option Holder an Option equivalent 

5

 

(including
original vesting terms, if any) to the Option cancelled or exercised, provided that in the case of an Option which was exercised, the Option Holder surrenders for cancellation the Units
purchased upon the exercise of the Option; or 

	(ii)
	the
Option is, in connection with the Third Party Offer, either to be assumed by the Offeror or parent thereof or to be replaced with a comparable
stock option to purchase shares in the capital of the Offeror or parent therof. In the event the Option is assumed or replaced by the Offeror or parent thereof, the terms and conditions of the Option
may be subject to adjustment, and the notice shall specify any adjustment to the terms and conditions of the Option including, without limitation, the number and class of shares that may be purchased,
the exercise price and the vesting terms. 

	(g)
	Carry-Along

If
a Third Party Offer is received that is approved by the Board and accepted by shareholders of the Company holding not less than 662/3% of the Shares, the Company may send a notice to
the Option Holder requiring the Option Holder to sell all of the Units owned by the Option Holder under the Third Party Offer. The Notice shall set forth: 

	(i)
	the
purchase price;

	(ii)
	the
terms and conditions of the sale; and

	(iii)
	the
closing date for the sale. 

The
Option Holder shall sell all Units in accordance with the terms of the notice and the Third Party Offer. 

Notwithstanding
anything else contained in the Plan, the Board may in its discretion (a) extend the Expiry Date of any Option, provided that in no case shall an Option be exercisable later than
the tenth
anniversary of the Award Date of the Option; or (b) alter or change the vesting terms applicable to an Option. 

3.5  Power of Attorney

Each
and every time an Option Holder exercises an Option in whole or in part in accordance with paragraph 4.1 of the Plan, the Option Holder shall, by signing and delivering to the Administrator the
Exercise Notice, appoint the Administrator of the Plan as: 

	(a)
	the
Option Holder's attorney in accordance with the Power of Attorney Act R.S.B.C. 1996, c.370; and

	(b)
	the
Option Holder's agent and representative, 

to
do all such things and execute all such documents and resolutions of any kind whatsoever as may be required of the Option Holder in connection with the deposit of the Units in escrow or pool as
contemplated in subparagraph 3.4(e) of the Plan or to sell or transfer the Units as contemplated in subparagraph 3.4(g) of the Plan (and in no other capacity or for no other purpose). 

3.6  Exercise Price

The
price at which an Option Holder may purchase a Unit upon the exercise of an Option shall be as set forth in the Option Certificate issued in respect of such Option and in any event shall not be
less than the Market Value of the Units as of the Award Date. The Market Value of the Units for a particular Award Date shall be the combined Market Value of the Class A Voting Common Shares
and the Class B Non-voting Common Shares. The Market Value of the Class A Voting Common Shares for a particular Award Date shall be $0.001 per Class A Voting Common Share. The
Market Value of the Class B Non-voting Common Shares for a particular Award Date shall be, subject to the necessary 

6

 

approvals of the applicable Regulatory Authorities, the fair market value of the Class B Non-voting Common Shares on the Award Date, unless otherwise determined by resolution of the Board. 

Notwithstanding
anything else contained herein, in no case shall the Market Value be less than the minimum prescribed by each of the organized trading facilities as would apply to the Award Date in
question. 

3.7  Additional Terms

Subject
to all applicable securities laws and regulations and the rules and policies of all applicable Regulatory Authorities, the Board may attach other terms and conditions to the grant of a
particular Option, such terms and conditions to be referred to in a schedule attached to the Option Certificate. These terms and conditions may include, but are not necessarily limited to, the
following: 

	(a)
	providing
that an Option expires on a date other than as provided for herein;

	(b)
	providing
that a portion or portions of an Option vest after certain periods of time or upon the occurrence of certain events, or expire after certain periods of time or upon the
occurrence of certain events other than as provided for herein; and

	(c)
	providing
that an Option be exercisable immediately, in full, notwithstanding that it has vesting provisions, upon the occurrence of certain events, such as a friendly or hostile
takeover bid for the Company. 

3.8  Assignment of Options

Options
may not be assigned or transferred, provided however that the Personal Representative of an Option Holder may, to the extent permitted by paragraph 4.1, exercise the Option within the Exercise
Period. 

3.9  Adjustments

If
prior to the complete exercise of any Option the Class A Voting Common Shares or Class B Non-voting Common Shares are consolidated, subdivided, converted, exchanged or reclassified or
in any way substituted for (collectively, the "Event"), an Option, to the extent that it has not been exercised, shall be adjusted by the Board in accordance with such Event in the manner the Board
deems appropriate. No fractional Class A Voting Common Shares or Class B Non-voting Common Shares shall be issued upon the exercise of the Options and accordingly, if as a result of the
Event, an Option Holder would become entitled to a fractional Class A Voting Common Share or Class B Non-voting Common Share, such Option Holder shall have the right to purchase only the
next lowest whole number of Class A Voting Common Shares or Class B Non-voting Common Shares and no payment or other adjustment shall be made with respect to the fractional interest so
disregarded. 

3.10  Vesting

Unless
otherwise provided for in the Option Certificate, the Option shall vest over a period of four years as follows. The right to purchase 12/48ths of the Units under Option shall vest on the first
anniversary of the Award Date or on such other date as may be fixed by the Board, and the right to purchase 1/48th of the Units under Option shall vest every month thereafter, until all of the Option
is so vested. 

3.11  Shareholders' Agreement

The
Option Holder hereby acknowledges and agrees that immediately upon the Option Holder exercising the Option in whole or in part in accordance with paragraph 4.1 of the Plan, the Option Holder shall
be bound by the terms and conditions of any existing shareholders' agreement to which other minority shareholders of the Company are parties, and the Option Holder shall have the same rights and
obligations and be subject to the same restrictions as other minority shareholders of the 

7

 

Company under such shareholders' agreement. The Option Holder shall sign an acknowledgement and agreement to be bound by the terms and conditions of such shareholders' agreement in a form that is
acceptable to the Company, acting reasonably. 

 
 

ARTICLE 4
  EXERCISE OF OPTION    
  

4.1  Exercise of Option

An
Option may be exercised only by the Option Holder or the Personal Representative of the Option Holder. An Option Holder or the Personal Representative of the Option Holder may exercise the vested
portion or portions of an Option in whole or in part at any time or from time to time during the Exercise Period up to 5:00 p.m. local time in Vancouver, British Columbia on the Expiry Date by
delivering to the Administrator an Exercise Notice, the applicable Option Certificate and a certified cheque or bank draft payable to "Circa Communications Ltd." in an amount equal to the aggregate
Exercise Price of the Units to be purchased pursuant to the exercise of the Option. 

4.2  Issue of Share Certificates

As
soon as practicable following the receipt of the Exercise Notice, the Administrator shall cause to be delivered to the Option Holder certificates for the Class A Voting Common Shares and
Class B Non-voting Common Shares purchased or to be received by the Option Holder. If the number of Units in respect of which the Option was exercised is less than the number of Units subject
to the Option Certificate surrendered, the Administrator shall forward a new Option Certificate to the Option Holder concurrently with delivery of the share certificates for the balance of the Units
available under the Option. 

4.3  Condition of Issue

The
Options and the issue of Class A Voting Common Shares and Class B Non-voting Common Shares by the Company pursuant to the exercise of Options are subject to the terms and conditions
of the Plan and compliance with the rules and policies of all applicable Regulatory Authorities with respect to the granting of such Options and the issuance and distribution of such
Class A Voting Common Shares and Class B Non-voting Common Shares, and to all applicable securities laws and regulations. The Option Holder agrees to comply with all such laws,
regulations, rules and policies and agrees to furnish to the Company any information, reports or undertakings required to comply with, and to fully cooperate with, the Company in complying with
such laws, regulations, rules and policies. 

 
 

ARTICLE 5
  ADMINISTRATION    
  

5.1  Administration

The
Plan shall be administered by the Administrator on the instructions of the Board. The Board may make, amend and repeal at any time and from time to time such regulations not inconsistent with the
Plan as it may deem necessary or advisable for the proper administration and operation of the Plan and such regulations shall form part of the Plan. The Board may delegate to the Administrator or any
director, officer or employee of the Company such administrative duties and powers as it may see fit. 

5.2  Interpretation

The
interpretation by the Board of any of the provisions of the Plan and any determination by it pursuant thereto shall be final and conclusive and shall not be subject to any dispute by any Option
Holder. No member of the Board or any person acting pursuant to authority delegated by it hereunder shall be liable for any action or determination in connection with the Plan made or taken in good
faith 

8

 

and each member of the Board and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Company. 

 
 

ARTICLE 6
  AMENDMENT, TERMINATION AND NOTICE    
  

6.1  Prospective Amendment

The
Board may from time to time amend the Plan and the terms and conditions of any Option thereafter to be granted and, without limiting the generality of the foregoing, may make such amendment for
the purpose of meeting any changes in any relevant law, rule or regulation applicable to the Plan, any Option or the Units, or for any other purpose which may be permitted by all relevant laws,
regulations, rules and policies provided always that any such amendment (with the exception of an amendment pursuant to subparagraph 3.4(f)(ii)) shall not alter the terms or conditions of any
Option or impair any right of any Option Holder pursuant to any Option awarded prior to such amendment. 

6.2  Retrospective Amendment

The
Board may from time to time retrospectively amend the Plan and, with the consent of the affected Option Holders, retrospectively amend the terms and conditions of any Options which have been
previously granted. 

6.3  Approvals

The
Plan and any amendments hereto are subject to all necessary approvals of the applicable Regulatory Authorities. 

6.4  Termination

The
Board may terminate the Plan at any time provided that such termination shall not alter the terms or conditions of any Option or impair any right of any Option Holder pursuant to any Option
awarded prior to the date of such termination which shall continue to be governed by the provisions of the Plan. 

6.5  Agreement

The
Company and every Option awarded hereunder shall be bound by and subject to the terms and conditions of the Plan. By accepting an Option granted hereunder, the Option Holder has expressly agreed
with the Company to be bound by the terms and conditions of the Plan. 

6.6  Notice

Any
notice or other communication contemplated under the Plan to be given by the Company to an Option Holder shall be given by the Company delivering or faxing the notice to the Option Holder at the
last address for the Option Holder in the Company's records. Any such notice shall be deemed to have been given on the date on which it was delivered, or in the case of fax, the next business day
after
transmission. An Option Holder may, at any time, advise the Company of a change in the Option Holder's address or fax number. 

9

 
 

SCHEDULE "A"    
    
    CIRCA COMMUNICATIONS LTD.
  STOCK OPTION PLAN    
    
    OPTION CERTIFICATE    
  

This
Certificate is issued pursuant to the provisions of the Circa Communications Ltd. (the "Company") Stock Option Plan (the "Plan") and evidences that
  •  is the holder (the "Option Holder") of an option (the "Option") to purchase up to  •  units (the "Units") of
the Company at a purchase price of Cdn. $  •  per Unit. Each Unit shall be comprised of one Class A Voting Common Share in the capital of the Company
and one Class B Non-voting Common Share in the capital of the Company. 

Subject
to the provisions of the Plan: 

	(a)
	the
Award Date of this Option is  •  ,  •  ; and

	(b)
	the
Expiry Date of this Option is  •  ,  •  . 

The
vested portion or portions of this Option may be exercised at any time and from time to time from and including the Award Date through to and including up to 5:00 p.m. local time in
Vancouver, British Columbia on the Expiry Date by delivery to the Administrator of the Plan an Exercise Notice, in the form provided in the Plan, together with this Certificate and a certified cheque
or bank draft payable to "Circa Communications Ltd." in an amount equal to the aggregate of the Exercise Price of the Units in respect of which this
Option is being exercised. 

This
Certificate and the Option evidenced hereby is not assignable, transferable or negotiable and is subject to the detailed terms and conditions contained in the Plan, the terms and conditions of
which the Option Holder hereby expressly agrees with the Company to be bound by. This Certificate is issued for convenience only and in the case of any dispute with regard to any matter in respect
hereof, the provisions of the Plan and the records of the Company shall prevail. 

This
Option is also subject to the terms and conditions contained in the schedules, if any, attached hereto. 

This
Certificate has been issued this  •  day of  •  ,  •  . 

CIRCA COMMUNICATIONS LTD.  

	Per:	 	 	 	 
	 	 	
 Administrator, Stock Option Plan

Circa Communications Ltd.	 	 

 
 
 

OPTION CERTIFICATE—SCHEDULE    
  

    The additional terms and conditions attached to the Option represented by this Option Certificate are as follows: 

	1.
	The
right to purchase 12/48ths of the Units shall vest on  •  and the right to purchase 1/48th of the Units shall vest every month
thereafter until all of the Option is so vested; and

	2.
	•  .

CIRCA COMMUNICATIONS LTD.  

	Per:	 	 	 	 
	 	 	
 Administrator, Stock Option Plan

Circa Communications Ltd.	 	 

2

 
 

SCHEDULE "B"    
    
    CIRCA COMMUNICATIONS LTD.
  STOCK OPTION PLAN    
    
    NOTICE OF EXERCISE OF OPTION    
  

	TO:	 	The Administrator, Stock Option Plan
 Circa Communications Ltd.

#1000—West 14th Street

North Vancouver, British Columbia, V7P 3P3

The
undersigned hereby irrevocably gives notice, pursuant to the Circa Communications Ltd. Stock Option Plan, of the exercise of the Option to acquire
and hereby subscribes for (cross out inapplicable item): 

	(a)
	all
of the Units; or

	(b)
	              
of the Units; 

which
are the subject of the Option Certificate attached hereto. 

The
undersigned tenders herewith a certified cheque or bank draft (circle one) payable to "Circa Communications
Ltd." in an amount equal to the aggregate Exercise Price of the aforesaid Units and directs the Company to issue the certificates evidencing the Class A Voting Common
Shares and Class B Non-voting Common Shares comprising said Units in the name of the undersigned to be mailed to the undersigned at the following address: 

The
undersigned acknowledges that pursuant to the terms of subparagraphs 3.4(e), (f) and (g) of the Plan the undersigned may be required to sign an escrow agreement or sell the Units in
connection with a Third Party Offer. By executing this Notice of Exercise of Option the undersigned hereby confirms that the undersigned has read the Plan and agrees to be bound by the provisions of
the Plan, including without limitation subparagraphs 3.4(e), (f) and (g) and paragraph 3.5. 

Pursuant
to paragraph 3.5 of the Plan the undersigned hereby appoints (the "Appointment") the Administrator of the Plan as: 

	(c)
	the
undersigned's attorney in accordance with the Power of Attorney Act R.S.B.C. 1996, c.370; and

	(d)
	the
undersigned's agent and representative, 

to
do all such things and execute all such documents and resolutions of any kind whatsoever as may be required of the undersigned in connection with the deposit of the Units in escrow or pool as
contemplated in subparagraph 3.4(e) of the Plan or to sell or transfer the Units as contemplated in subparagraph 3.4(g) of the Plan (and in no other capacity or for no other purpose).
Without in any way limiting the generality of the foregoing, the Appointment shall entitle the Administrator of the Plan to, on behalf of the undersigned, execute all documents and resolutions
required in respect thereof including, without limitation, the following: 

	(a)
	shareholders'
resolutions;

	(b)
	purchase
agreement in respect of the sale of the Units;

	(c)
	powers
of attorney to transfer the Units; and

	(d)
	a
pooling or escrow agreement in respect of some of or all of the Units. 

DATED
the           day of                    ,         
 . 

	 	 	
Signature of Option Holder

QuickLinks

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS AND INTERPRETATION

ARTICLE 2 PURPOSE AND PARTICIPATION

ARTICLE 3 TERMS AND CONDITIONS OF OPTIONS

ARTICLE 4 EXERCISE OF OPTION

ARTICLE 5 ADMINISTRATION

ARTICLE 6 AMENDMENT, TERMINATION AND NOTICE

SCHEDULE "A" CIRCA COMMUNICATIONS LTD. STOCK OPTION PLAN OPTION CERTIFICATE

OPTION CERTIFICATE—SCHEDULE

SCHEDULE "B" CIRCA COMMUNICATIONS LTD. STOCK OPTION PLAN NOTICE OF EXERCISE OF OPTION

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