Document:

Form of Nonstatutory Stock Option Agreement

  
 Exhibit 10.4

  
 IBUYDIGITAL, INC. 
  
 Nonstatutory Stock Option Agreement 
 Granted Under 2004 Stock Incentive Plan 
  

	1.	Grant of Option. 

  
 This agreement evidences the grant by IBuyDigital, Inc., a Delaware corporation (the “Company”), on
[                    ], 200[  ] (the “Grant Date”) to
[                    ], an [employee]/[consultant]/[director] of the Company (the “Participant”), of an option to purchase, in
whole or in part, on the terms provided herein and in the Company’s 2004 Stock Incentive Plan (the “Plan”), a total of
[                    ] shares (the “Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”)
at $[            ] per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on
[                    ] (the “Final Exercise Date”). 
  
 It is intended that the option evidenced by this agreement shall not be an incentive stock option as defined in Section 422
of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include
any person who acquires the right to exercise this option validly under its terms. 
  

	2.	Vesting Schedule. 

  
 This option will become exercisable (“vest”) as to 33 1/3% of the original number of Shares on the first anniversary of the Grant Date and
pro-rata thereafter on a monthly basis at the end of each successive month following the first anniversary of the Grant Date until the third anniversary of the Grant Date. 
  
 The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum
extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

  

	3.	Exercise of Option. 

  
 (a) Form of Exercise. Each election to exercise this option shall be by written notice in the form attached hereto as Exhibit A, signed by
the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan. The Participant may purchase less than the number of shares covered hereby, provided that no
partial exercise of this option may be for any fractional share. 
  
 (b) Continuous Relationship with the Company Required. Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time he or she exercises this option, is, and has been at all
times since the Grant Date, an [employee, officer or director of, or consultant or advisor to], the Company or any other entity the 

  

 
[employees, officers, directors, consultants, or advisors] of which are eligible to receive option grants under the Plan (an “Eligible
Participant”). 
  
 (c) Termination of Relationship with
the Company. If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event
after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation. Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right
to exercise this option shall terminate immediately upon written notice to the Participant from the Company describing such violation. 
  
 (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
prior to the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated such relationship for “cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was
exercisable by the Participant on the date of his or her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date. 
  
 (e) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is discharged by the Company for
“cause” (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such discharge. “Cause” shall mean willful misconduct by the Participant or willful failure by the Participant
to perform his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination shall be conclusive. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the
Participant’s resignation, that discharge for cause was warranted. 
  

	4.	Withholding. 

  
 No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option. 
  

	5.	Nontransferability of Option. 

  
 This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent 

  

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

	6.	Provisions of the Plan. 

  
 This option is subject to the provisions of the Plan, a copy of which is furnished to the Participant with this option. 
  
 IN WITNESS WHEREOF, the Company has caused this option to be executed under
its corporate seal by its duly authorized officer. This option shall take effect as a sealed instrument. 
  

											
	 	 	 	 	 IBUYDIGITAL, INC.

					
	Dated:	 	 	 	 	 	By:	 	 
						
	 	 	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 	 	 Title:
	 	 

  

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 PARTICIPANT’S ACCEPTANCE

  
 The undersigned hereby accepts the foregoing option and agrees
to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2004 Stock Incentive Plan. 
  

			
	PARTICIPANT:
	
	 
		
	Address: 	 	 
		
	 	 	 

  

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 EXHIBIT A 
  
 NOTICE OF STOCK OPTION EXERCISE 
  
 Date:
                             
  
 Participant name and address: 
  
 ____________________ 
 ____________________ 
 ____________________ 
  
 Attention: Treasurer 
  
 Dear Sir or Madam:

  
 I am the holder of an Nonstatutory Stock Option granted to me
under the IBuyDigital, Inc. (the “Company”) 2004 Stock Incentive Plan on                      for the purchase of
                     shares of Common Stock of the Company at a purchase price of
$                     per share. 
  
 I hereby exercise my option to purchase
                     shares of Common Stock (the “Shares”), for which I have enclosed
                     in the amount of $            . Please register my
stock certificate as follows: 
  

							
	 	  	 	  	(check applicable box)
				
	 Name(s):
	  	_______________________        	  	 ̈	  	TEN COM
				
	 	  	_______________________        	  	 ̈	  	TEN ENT
				
	 Address:
	  	_______________________        	  	 ̈	  	JT TEN
				
	 Tax I.D. #:
	  	_______________________        	  	 ̈	  	UNIF GIFT MIN ACT

  
 I represent, warrant
and covenant as follows: 
  
 1. I am purchasing the Shares for my own account for
investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act. 
  
 2. I have had such opportunity as I have deemed adequate to obtain from representatives of
the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company. 
  

 3. I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved
in the purchase of the Shares and to make an informed investment decision with respect to such purchase. 
  
 4. I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period. 
  
 5. I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the
meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any
event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then
available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has
no obligation or current intention to register the Shares under the Securities Act. 
  

	
	 Very truly yours,

	
	  
	 (Signature)

  

 -6-2004 Employee Stock Purchase Plan

  
 Exhibit 10.5

  
 IBUYDIGITAL, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 The purpose of this Plan is to provide eligible employees of IBuyDigital,
Inc. (the “Company”) and its subsidiaries with opportunities to purchase shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), commencing on the date on which the Securities and Exchange
Commission (the “SEC”) declares a registration statement on Form S-1 for the initial public offering (the “IPO”) of the Company’s Common Stock effective (the “Effective Date”). An aggregate of 200,000 shares of
Common Stock have been approved for this purpose. This Plan is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
promulgated thereunder, and shall be interpreted consistent therewith. 
  
 1. Administration. The Plan will be administered by the Company’s Board of Directors (the “Board”) or by a Committee appointed by the Board (the “Committee”). The Board or the Committee has authority to make
rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive. 
  
 2. Eligibility. All employees of the Company, including Directors who are employees, and all employees of any subsidiary of the Company (as defined
in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of the offerings of Options (as defined in Section 9) to purchase Common
Stock under the Plan provided that: 
  
 (a) they
are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five (5) months in a calendar year; and 
  
 (b) they have been employed by the Company or a Designated Subsidiary for at least ninety (90) days prior to enrolling in the Plan; and

  
 (c) they are employees of the Company or a
Designated Subsidiary on the first day of the applicable Plan Period (as defined below). 
  
 No employee may be granted an option hereunder if such employee, immediately after the option is granted, owns 5% or more of the total combined voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and all stock which the employee has a contractual right to purchase shall be treated as stock
owned by the employee. 
  
 3. Offerings. The Company will
make one or more offerings (“Offerings”) to employees to purchase stock under this Plan. Offerings will begin each April 1 and October 1, or the first business day thereafter (the “Offering Commencement Dates”). Each Offering
Commencement Date will begin a six (6) month period (a “Plan Period”) during which payroll deductions will be made and held for the purchase of Common Stock at the end of the Plan 

  

 
Period. The Board or the Committee may, at its discretion, choose a different Plan Period of twelve (12) months or less for subsequent Offerings.
Notwithstanding anything to the contrary, the first Plan Period shall begin on the first date that the Common Stock is publicly traded following the Company’s IPO and shall end on September 30, 2005. 
  
 4. Participation. An employee eligible on the Offering Commencement
Date of any Offering may participate in such Offering by completing and forwarding a payroll deduction authorization form to the employee’s appropriate payroll office at least ten (10) days prior to the applicable Offering Commencement Date.
The form will authorize a regular payroll deduction from the Compensation received by the employee during the Plan Period. Unless an employee files a new form or withdraws from the Plan, his deductions and purchases will continue at the same rate
for future Offerings under the Plan as long as the Plan remains in effect. The term “Compensation” means the amount of money reportable on the employee’s Federal Income Tax Withholding Statement, excluding overtime, shift premium,
incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains on the exercise of Company stock options or stock appreciation rights, and similar items, whether or not shown
on the employee’s Federal Income Tax Withholding Statement, but including, in the case of salespersons, sales commissions to the extent determined by the Board or the Committee. 
  
 5. Deductions. The Company will maintain payroll deduction accounts for all participating employees. With respect to
any Offering made under this Plan, an employee may authorize a payroll deduction in any dollar amount up to a maximum of 15% of the Compensation he or she receives during the Plan Period or such shorter period during which deductions from payroll
are made. The minimum payroll deduction is such percentage of compensation as may be established from time to time by the Board or the Committee. 
  
 6. Deduction Changes. An employee may decrease or discontinue his payroll deduction once during any Plan Period, by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll deduction during a Plan Period. If an employee elects to discontinue his payroll deductions during a Plan Period, but does not elect to withdraw his funds pursuant to Section 8
hereof, funds deducted prior to his election to discontinue will be applied to the purchase of Common Stock on the Exercise Date (as defined below). 
  
 7. Interest. Interest will not be paid on any employee accounts, except to the extent that the Board or the Committee, in its sole discretion,
elects to credit employee accounts with interest at such per annum rate as it may from time to time determine. 
  
 8. Withdrawal of Funds. An employee may at any time prior to the close of business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an Offering. Partial withdrawals are not permitted. The employee may not begin participation again during the remainder of the
Plan Period. The employee may participate in any subsequent Offering in accordance with terms and conditions established by the Board or the Committee. 
  

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 9. Purchase of Shares. On the Offering Commencement Date of each Plan Period, the Company will
grant to each eligible employee who is then a participant in the Plan an option (“Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”), at the Option Price hereinafter provided for, the largest
number of whole shares of Common Stock of the Company as does not exceed the number of shares determined by multiplying $2,083 by the number of full months in the Offering Period and dividing the result by the closing price (as defined below) on the
Offering Commencement Date of such Plan Period. 
  
 Notwithstanding the above, no employee may be granted an Option (as defined in Section 9) which permits his rights to purchase Common Stock under this Plan and any other employee stock purchase plan (as defined in Section 423(b) of the
Code) of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock (determined at the Offering Commencement Date of the Plan Period) for each calendar year in which the Option is
outstanding at any time. 
  
 The purchase price for each share
purchased will be 85% of the closing price of the Common Stock on (i) the first business day of such Plan Period or (ii) the Exercise Date, whichever closing price shall be less. Such closing price shall be (a) the closing price on any national
securities exchange on which the Common Stock is listed, (b) the closing price of the Common Stock on the Nasdaq National Market or (c) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as
published in The Wall Street Journal; provided, however, that, with respect to the first Plan Period, the closing price on the Offering Commencement Date shall be the initial public offering price provided for in the
underwriting agreement entered into by the Company in connection with the IPO. If no sales of Common Stock were made on such a day, the price of the Common Stock for purposes of clauses (a) and (b) above shall be the reported price for the next
preceding day on which sales were made. 
  
 Each employee who
continues to be a participant in the Plan on the Exercise Date shall be deemed to have exercised his Option at the Option Price on such date and shall be deemed to have purchased from the Company the number of full shares of Common Stock reserved
for the purpose of the Plan that his accumulated payroll deductions on such date will pay for, but not in excess of the maximum number determined in the manner set forth above. 
  
 Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period will be automatically
refunded to the employee, except that any balance which is less than the purchase price of one share of Common Stock will be carried forward into the employee’s payroll deduction account for the following Offering, unless the employee elects
not to participate in the following Offering under the Plan, in which case the balance in the employee’s account shall be refunded. 
  
 10. Issuance of Certificates. Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the
employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the Company’s sole discretion) in the name of a brokerage firm, bank or other nominee holder designated by the employee.
The Company may, in its sole discretion and in compliance with 

  

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applicable laws, authorize the use of book entry registration of shares in lieu of issuing stock certificates. 
  
 11. Rights on Death or Termination of Employment. In the event of a
participating employee’s termination of employment prior to the last business day of a Plan Period, no payroll deduction shall be taken from any pay due and owing to an employee and the balance in the employee’s account shall be paid to
the employee or, in the event of the employee’s death, (a) to a beneficiary previously designated in a revocable notice signed by the employee (with any spousal consent required under state law) or (b) in the absence of such a designated
beneficiary, to the executor or administrator of the employee’s estate or (c) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate. If,
prior to the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed shall cease to be a subsidiary of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated
Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this Plan. 
  
 12. Optionees Not Stockholders. Neither the granting of an Option to an employee nor the deductions from his or her pay shall constitute such
employee a stockholder of the shares of Common Stock covered by an Option under this Plan until such shares have been purchased by and issued to him or her, as the case may be. 
  
 13. Rights Not Transferable. Rights under this Plan are not transferable by a participating employee other than by
will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee. 
  
 14. Application of Funds. All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for
any corporate purpose. 
  
 15. Adjustment in Case of Changes
Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares approved for this Plan, and the share limitation set forth in Section 9, shall be
increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Board or the Committee. In the event of any other change affecting the Common Stock, such adjustment shall be made as may be deemed equitable by the
Board or the Committee to give proper effect to such event. 
  
 16. Merger. If the Company shall at any time merge or consolidate with another corporation and the holders of the capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 80% by voting
power of the capital stock of the surviving corporation (“Continuity of Control”), the holder of each Option then outstanding will thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for each share
as to which such Option shall be exercised the securities or property which a holder of one share of the Common Stock was entitled to upon and at the time of such merger or consolidation, and the Board or the Committee shall take such steps in
connection with such merger or consolidation as the Board or the Committee shall deem necessary to assure that the provisions of Section 15 shall thereafter be applicable, as nearly as reasonably may be, in 

  

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relation to the said securities or property as to which such holder of such Option might thereafter be entitled to receive thereunder. 
  
 In the event of a merger or consolidation of the Company with or into another
corporation which does not involve Continuity of Control, or of a sale of all or substantially all of the assets of the Company while unexercised Options remain outstanding under the Plan, (a) subject to the provisions of clauses (b) and (c), after
the effective date of such transaction, each holder of an outstanding Option shall be entitled, upon exercise of such Option, to receive in lieu of shares of Common Stock, shares of such stock or other securities as the holders of shares of Common
Stock received pursuant to the terms of such transaction; or (b) all outstanding Options may be cancelled by the Board or the Committee as of a date prior to the effective date of any such transaction and all payroll deductions shall be paid out to
the participating employees; or (c) all outstanding Options may be cancelled by the Board or the Committee as of the effective date of any such transaction, provided that notice of such cancellation shall be given to each holder of an Option, and
each holder of an Option shall have the right to exercise such Option in full based on payroll deductions then credited to his account as of a date determined by the Board or the Committee, which date shall not be less than ten (10) days preceding
the effective date of such transaction. 
  
 17. Amendment of
the Plan. The Board may at any time, and from time to time, amend this Plan in any respect, except that (a) if the approval of any such amendment by the stockholders of the Company is required by Section 423 of the Code, such amendment shall not
be effected without such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to comply with Section 423 of the Code. 
  
 18. Insufficient Shares. In the event that the total number of shares of Common Stock specified in elections to be purchased under any Offering
plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan, the Board or the Committee will allot the shares then available on a pro rata basis. 
  
 19. Termination of the Plan. This Plan may be terminated at any time
by the Board. Upon termination of this Plan all amounts in the accounts of participating employees shall be promptly refunded. 
  
 20. Governmental Regulations. The Company’s obligation to sell and deliver Common Stock under this Plan is subject to listing on a national
stock exchange or quotation on the Nasdaq National Market (to the extent the Common Stock is then so listed or quoted) and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.

  
 21. Governing Law. The Plan shall be governed by
Delaware law except to the extent that such law is preempted by federal law. 
  
 22. Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source. 

 

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 23. Notification upon Sale of Shares. Each employee agrees, by entering the Plan, to promptly give
the Company notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased. 
  
 24. Withholding. Each employee shall, no later than the date of the
event creating the tax liability, make provision satisfactory to the Board for payment of any taxes required by law to be withheld in connection with any transaction related to Options granted to or shares acquired by such employee pursuant to the
Plan. The Company may, to the extent permitted by law, deduct any such taxes from any payment of any kind otherwise due to an employee. 
  
 25. Effective Date and Approval of Stockholders. The Plan shall take effect on the Effective Date, subject to approval by the stockholders of the
Company as required by Section 423 of the Code, which approval must occur within twelve months of the adoption of the Plan by the Board. 
  
 26. Special Provisions for First Plan Period. The following provisions of this Section 26 shall apply with respect to the first Plan Period
notwithstanding any provision of the Plan to the contrary: 
  
 (a) Every eligible employee shall automatically become a participant in the Plan for the first Plan Period at the highest percentage of Compensation permitted under Section 5. No payroll deductions shall be required
for the first Plan Period; however, a participant may, at any time after the effectiveness of the Plan’s Registration Statement on Form S-8, elect to have payroll deductions up to the aggregate amount which would have been credited to
his or her account if a deduction of 15% of the Compensation which he or she received on each pay day during the first Plan Period had been made (the “Maximum Amount”) or decline to participate by filing an appropriate subscription
agreement. 
  
 (b) Upon the automatic exercise of
a participant’s option on the Exercise Date for the First Plan Period, a participant shall be permitted to purchase shares with (i) the accumulated payroll deductions in his or her account, if any, (ii) a direct payment form the participant, or
(iii) a combination thereof; provided, however, that the total amount applied to the purchase may not exceed the Maximum Amount. 
  
 Adopted by the Board of Directors on December 14, 2004 
  
 Approved by the stockholders on December 14, 2004 
  

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