{"id":40201,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/notice-of-stock-option-grant-network-computer-inc-and-mitchell.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"notice-of-stock-option-grant-network-computer-inc-and-mitchell","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/notice-of-stock-option-grant-network-computer-inc-and-mitchell.html","title":{"rendered":"Notice of Stock Option Grant &#8211; Network Computer Inc. and Mitchell E. Kertzman"},"content":{"rendered":"<pre>\n                               NETWORK COMPUTER, INC.\n                                          \n                            NOTICE OF STOCK OPTION GRANT\n\nMitchell E. Kertzman\n[Address]\n\n       You have been granted an option to purchase Common Stock of Network\nComputer, Inc. (the 'COMPANY') as follows:\n\n       Date of Grant:                        November 16, 1998\n\n       Vesting Commencement Date:            November 16, 1998\n\n       Exercise Price per Share:             $0.85\n\n       Total Number of Shares Granted:       10,000,000\n\n       Total Exercise Price:                 $8,500,000\n\n       Type of Option:                       Nonqualified Stock Option\n\n       Term\/Expiration Date:                 November 16, 2008\n\n       Vesting Schedule:                     This Option may be exercised, in\n                                             whole or in part, in accordance\n                                             with the following schedule:  \n                                             One-fourth (1\/4) of the Option \n                                             shall vest on the one-year \n                                             anniversary of the Vesting \n                                             Commencement Date; and one \n                                             thirty-sixth (1\/36) of the\n                                             remaining total number of Shares of\n                                             the Option shall vest upon the\n                                             completion of each month of service\n                                             as an Employee or Consultant\n                                             thereafter.\n\n       Termination Period:                   This Option may be exercised for\n                                             three (3) months after termination\n                                             of employment or consulting\n                                             relationship except as set out in\n                                             Sections 7 and 8 of the Stock\n                                             Option Agreement (but in no event\n                                             later than the Expiration Date).\n\n       By your signature and the signature of the Company's representative \nbelow, you and the Company agree that this option is granted under and \ngoverned by the terms and conditions of the Stock Option Agreement, which is \nattached and made a part of this document.\n\nMITCHELL E. KERTZMAN:                        NETWORK COMPUTER, INC.\n\n                                              By:\n--------------------------------                  ----------------------------\nSignature \n\n                                              Title:\n--------------------------------                    ---------------------------\nPrint Name\n\n\n\n                                          \n                               NETWORK COMPUTER, INC.\n                                          \n                               STOCK OPTION AGREEMENT\n\n\n       1.     GRANT OF OPTION.  Network Computer, Inc., a Delaware \ncorporation (the 'COMPANY'), hereby grants to Optionee named in the Notice of \nStock Option Grant (the 'OPTIONEE'), an option (the 'OPTION') to purchase a \ntotal number of shares of Common Stock (the 'SHARES') set forth in the Notice \nof Stock Option Grant, at the exercise price per share set forth in the \nNotice of Stock Option Grant (the 'EXERCISE PRICE').  \n\n       2.     EXERCISE OF OPTION.  This Option shall be exercisable during \nits Term in accordance with the Exercise Schedule set out in the Notice of \nStock Option Grant as follows:\n\n              (a)    RIGHT TO EXERCISE.\n\n                     (i)    This Option may not be exercised for a fraction of a\nshare.\n\n                     (ii)   In the event of Optionee's death, disability or \nother termination of employment or consulting service, the exercisability of \nthe Option is governed by Sections 6, 7 and 8 below, subject to the \nlimitation contained in Section 2(a)(i).\n\n                     (iii)  In no event may this Option be exercised after \nthe date of expiration of the Term of this Option as set forth in the Notice \nof Stock Option Grant.\n\n              (b)    METHOD OF EXERCISE.  This Option shall be exercisable by \nwritten notice (in the form attached as EXHIBIT A), the terms of which are \nhereby incorporated by reference into the terms of this Option.  The notice \nshall state the election to exercise the Option, the number of Shares in \nrespect of which the Option is being exercised, and such other \nrepresentations and agreements as to the holder's investment intent with \nrespect to such shares of Common Stock as may be required by the Company.  \nSuch written notice shall be signed by Optionee and shall be delivered in \nperson or by certified mail to the Secretary of the Company.  The written \nnotice shall be accompanied by payment of the Exercise Price.  This Option \nshall be deemed to be exercised upon receipt by the Company of such written \nnotice accompanied by the Exercise Price.\n\n              (c)    COMPLIANCE WITH LAW.  No Shares will be issued pursuant \nto the exercise of an Option unless such issuance and such exercise shall \ncomply with all relevant provisions of applicable law and the requirements of \nany stock exchange upon which the Shares may then be listed.  Assuming such \ncompliance, for income tax purposes the Shares shall be considered \ntransferred to Optionee on the date on which the Option is exercised with \nrespect to such Shares.\n\n\n\n       3.     OPTIONEE'S REPRESENTATIONS.  In the event the Shares \npurchasable pursuant to the exercise of this Option have not been registered \nunder the Securities Act at the time this Option is exercised, Optionee \nshall, if required by the Company, concurrently with the exercise of all or \nany portion of this Option, deliver to the Company Optionee's Investment \nRepresentation Statement in the form attached hereto as EXHIBIT B.\n\n       4.     METHOD OF PAYMENT.  Payment of the Exercise Price shall be by \nany of the following, or a combination thereof, at the election of Optionee:\n\n              (a)    cash; \n\n              (b)    check; \n\n              (c)    surrender of other shares of Common Stock of the Company \nwhich (i) in the case of Shares acquired pursuant to the exercise of a \nCompany option, have been owned by Optionee for more than six (6) months on \nthe date of surrender, and (ii) have a fair market value on the date of \nsurrender equal to the Exercise Price of the Shares as to which the Option is \nbeing exercised;\n\n              (d)    if there is a public market for the Shares and they are \nregistered under the  Securities Act, delivery of a properly executed \nexercise notice together with irrevocable instructions to a broker to deliver \npromptly to the Company the amount of sale or loan proceeds required to pay \nthe exercise price; or\n\n              (e)    such other consideration, including promissory notes, as \nmay be determined by the Board in its absolute discretion to the extent \npermitted under Sections 408 and 409 of the California General Corporation \nLaw.\n\n       5.     RESTRICTIONS ON EXERCISE.  This Option may not be exercised \nuntil the issuance of such Shares upon such exercise or the method of payment \nof consideration for such shares would not constitute a violation of any \napplicable federal or state securities or other law or regulation, including \nany rule under Part 207 of Title 12 of the Code of Federal Regulations as \npromulgated by the Federal Reserve Board.  As a condition to the exercise of \nthis Option, the Company may require Optionee to make any representation and \nwarranty to the Company as may be required by any applicable law or \nregulation.\n\n       6.     TERMINATION OF RELATIONSHIP.  In the event of termination of \nOptionee's Continuous Status as an Employee or Consultant, Optionee may, to \nthe extent otherwise so entitled at the date of such termination (the \n'TERMINATION DATE'), exercise this Option during the period ending on the \nExpiration Date set out in the Notice of Option Grant.  To the extent that \nOptionee was not entitled to exercise this Option at such Termination Date, \nor if Optionee does not exercise this Option within the time specified \nherein, the Option shall terminate.\n\n       7.     DISABILITY OF OPTIONEE.\n\n                                     -2-\n\n\n\n              (a)    Notwithstanding the provisions of Section 6 above, in \nthe event of termination of Continuous Status as an Employee or Consultant as \na result of Optionee's total and permanent disability (as defined in Section \n22(e)(3) of the Code), Optionee may, but only within twelve (12) months from \nthe Termination Date (but in no event later than the date of expiration of \nthe Term of this Option as set forth in the Notice of Stock Option Grant and \nin Section 10 below), exercise this Option to the extent Optionee was \nentitled to exercise it as of such Termination Date.  To the extent that \nOptionee was not entitled to exercise the Option as of the Termination Date, \nor if Optionee does not exercise such Option (which he was entitled to \nexercise) within the time specified herein, the Option shall terminate.\n       \n              (b)    Notwithstanding the provisions of Section 6 above, in \nthe event of termination of Optionee's consulting relationship or Continuous \nStatus as an Employee as a result of any disability not constituting a total \nand permanent disability (as defined in Section 22(e)(3) of the Code), \nOptionee may, but only within six (6) months from the Termination Date (but \nin no event later than the date of expiration of the Term of this Option as \nset forth in the Notice of Stock Option Grant and in Section 10 below), \nexercise this Option to the extent Optionee was entitled to exercise it as of \nsuch Termination Date.  To the extent that Optionee was not entitled to \nexercise the Option at the Termination Date, or if Optionee does not exercise \nsuch Option to the extent so entitled within the time specified herein, the \nOption shall terminate.\n       \n       8.     DEATH OF OPTIONEE.   In the event of the death of Optionee (a) \nduring the Term of this Option and while an Employee or Consultant of the \nCompany and having been in Continuous Status as an Employee or Consultant \nsince the date of grant of the Option, or (b) within thirty (30) days after \nOptionee's Termination Date, the Option may be exercised at any time within \nsix (6) months following the date of death (but in no event later than the \ndate of expiration of the Term of this Option as set forth in the Notice of  \nStock Option Grant and in Section 10 below), by Optionee's estate or by a \nperson who acquired the right to exercise the Option by bequest or \ninheritance, but only to the extent of the right to exercise that had accrued \nat the Termination Date.\n\n       9.     NON-TRANSFERABILITY OF OPTION.  This Option may not be \ntransferred in any manner otherwise than by will or by the laws of descent or \ndistribution and may be exercised during the lifetime of Optionee only by him \nor her.  The terms of this Option shall be binding upon the executors, \nadministrators, heirs, successors and assigns of Optionee.\n\n       10.    TERM OF OPTION.  This Option may be exercised only within the \nTerm set out in the Notice of Stock Option Grant, and may be exercised during \nsuch Term only in accordance with the terms of this Option.  \n\n       11.    TAX CONSEQUENCES.  Set forth below is a brief summary as of the\ndate of this Option of certain of the federal and California tax consequences of\nexercise of this Option and disposition of the Shares under the laws in effect\nas of the Date of Grant.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX\nLAWS AND \n\n                                     -3-\n\n\n\nREGULATIONS ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT A TAX ADVISER \nBEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.\n\n              (a)    EXERCISE OF NONQUALIFIED STOCK OPTION.  If this Option \nis a Nonqualified Stock Option and, thus, does not qualify as an Incentive \nStock Option, there may be a regular federal income tax liability and a \nCalifornia income tax liability upon the exercise of the Option.  The \nOptionee will be treated as having received compensation income (taxable at \nordinary income tax rates) equal to the excess, if any, of the fair market \nvalue of the Shares on the date of exercise over the Exercise Price.  If \nOptionee is an employee, the Company will be required to file applicable \nreports with the taxing authorities and withhold from Optionee's compensation \nor collect from Optionee and pay to the applicable taxing authorities an \namount equal to a percentage of this compensation income at the time of \nexercise.\n\n              (b)    DISPOSITION OF SHARES.  In the case of a Nonqualified \nStock Option, if the Shares are held for more than one year, any gain \nrealized on disposition of the Shares will be treated as long-term capital \ngain for federal and California income tax purposes.   \n\n       12.    WITHHOLDING TAX OBLIGATIONS.  Optionee understands that, upon \nexercising a Nonqualified Stock Option, he or she will recognize income for \ntax purposes in an amount equal to the excess of the then fair market value \nof the Shares over the Exercise Price.  However, the timing of this income \nrecognition may be deferred for up to six months if Optionee is subject to \nSection 16 of the Exchange Act.  If Optionee is an employee, the Company will \nbe required to withhold from Optionee's compensation, or collect from \nOptionee and pay to the applicable taxing authorities an amount equal to a \npercentage of this compensation income.  The Optionee shall satisfy his or \nher tax withholding obligation arising upon the exercise of this Option by \none or some combination of the following methods: (a) by cash payment, (b) \nout of Optionee's current compensation, (c) if permitted by the \nAdministrator, in its discretion, by surrendering to the Company Shares which \n(i) in the case of Shares previously acquired from the Company, have been \nowned by Optionee for more than six months on the date of surrender, and (ii) \nhave a fair market value on the date of surrender equal to or greater than \nOptionee's marginal tax rate times the ordinary income recognized, or (d) by \nelecting to have the Company withhold from the Shares to be issued upon \nexercise of the Option that number of Shares having a fair market value equal \nto the amount required to be withheld.  For this purpose, the fair market \nvalue of the Shares to be withheld shall be determined on the date that the \namount of tax to be withheld is to be determined (the 'TAX DATE').  \n\n       If Optionee is subject to Section 16 of the Exchange Act (an \n'INSIDER'), any surrender of previously owned Shares to satisfy tax \nwithholding obligations arising upon exercise of this Option must comply with \nthe applicable provisions of Rule 16b-3 promulgated under the Exchange Act \n('RULE 16B-3') and shall be subject to such additional conditions or \nrestrictions as may be required thereunder to qualify for the maximum \nexemption from Section 16 of the Exchange Act.\n\n                                     -4-\n\n\n\n\n       All elections by an Optionee to have Shares withheld to satisfy tax \nwithholding obligations shall be made in writing in a form acceptable to the \nAdministrator and shall be subject to the following restrictions:\n\n              (a)    the election must be made on or prior to the applicable Tax\nDate;\n\n              (b)    once made, the election shall be irrevocable as to the\nparticular Shares of the Option as to which the election is made;\n\n              (c)    all elections shall be subject to the consent or\ndisapproval of the Administrator; and\n\n              (d)    if Optionee is an Insider, the election must comply with \nthe applicable provisions of Rule 16b-3 and shall be subject to such \nadditional conditions or restrictions as may be required thereunder to \nqualify for the maximum exemption from Section 16 of the Exchange Act.\n\n       13.    MARKET STANDOFF AGREEMENT.  In connection with the initial public\noffering of the Company's securities and upon request of the Company or the\nunderwriters managing any underwritten offering of the Company's securities,\nOptionee hereby agrees not to sell, make any short sale of, loan, grant any\noption for the purchase of, or otherwise dispose of any Shares (other than those\nincluded in the registration) without the prior written consent of the Company\nor such underwriters, as the case may be, for such period of time (not to exceed\n180 days) from the effective date of such registration as may be requested by\nthe Company or such managing underwriters and to execute an agreement reflecting\nthe foregoing as may be requested by the underwriters at the time of the public\noffering.\n\n       14.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN \nOTHER TRANSACTIONS.\n\n              (a)    CHANGES IN CAPITALIZATION.  Subject to any required \naction by the stockholders of the Company, the number of shares of Common \nStock covered by this Option and the price per share of Common Stock covered \nby this Option, shall be proportionately adjusted for any increase or \ndecrease in the number of issued shares of Common Stock resulting from a \nstock split, reverse stock split, stock dividend, combination, \nrecapitalization or reclassification of the Common Stock, or any other \nincrease or decrease in the number of issued shares of Common Stock effected \nwithout receipt of consideration by the Company; provided, however, that \nconversion of any convertible securities of the Company shall not be deemed \nto have been 'effected without receipt of consideration.'  Such adjustment \nshall be made by the Board, whose determination in that respect shall be \nfinal, binding and conclusive.  Except as expressly provided herein, no \nissuance by the Company of shares of stock of any class, or securities \nconvertible into shares of stock of any class, shall affect, and no \nadjustment by reason thereof shall be made with respect to, the number or \nprice of shares of Common Stock subject to an Option.\n\n                                     -5-\n\n\n\n              (b)    DISSOLUTION OR LIQUIDATION.  In the event of the \nproposed dissolution or liquidation of the Company, the Board shall notify \nthe Optionee at least fifteen (15) days prior to such proposed action.  To \nthe extent it has not been previously exercised, the Option will terminate \nimmediately prior to the consummation of such proposed action.\n       \n              (c)    MERGER OR SALE OF ASSETS.  In the event of a change in \ncontrol of the Company, including a proposed sale of all or substantially all \nof the Company's assets or the consummation of a merger or consolidation of \nthe Company with or into another entity or any other corporate \nreorganization, if persons who were not stockholders of the Company \nimmediately prior to such merger, consolidation or other reorganization own \nimmediately after such merger, consolidation or other reorganization 50% or \nmore of the voting power of the outstanding securities of each of (A) the \ncontinuing or surviving entity and (B) any direct or indirect parent \ncorporation of such continuing or surviving entity, 50% of the unvested \nShares subject to this outstanding Option shall become vested immediately \nprior to the effective date of the change in control. In addition, to the \nextent otherwise provided in the merger agreement, this Option may be assumed \nor an equivalent option or right shall be substituted by such successor \ncorporation or a parent or subsidiary of such successor corporation, unless \nthe successor corporation does not agree to assume the Option or to \nsubstitute an equivalent option or right, in which case such Option shall \nterminate upon the consummation of the merger or sale of assets.\n\n              (d)    CERTAIN DISTRIBUTIONS.  In the event of any distribution \nto the Company's stockholders of securities of any other entity or other \nassets (other than dividends payable in cash or stock of the Company) without \nreceipt of consideration by the Company, the Administrator may, in its \ndiscretion, appropriately adjust the price per share of Common Stock covered \nby this outstanding Option to reflect the effect of such distribution.\n\n       15.    DEFINITIONS.\n\n              (a)    'ADMINISTRATOR' means the Board.\n\n              (b)    'BOARD' means the Board of Directors of the Company.\n\n              (c)    'CODE' means the Internal Revenue Code of 1986, as amended.\n\n              (d)    'COMMON STOCK' means the Common Stock of the Company.\n\n              (e)    'COMPANY' means Network Computer, Inc., a Delaware\ncorporation.\n\n              (f)    'CONSULTANT' means any person, including an advisor, who is\nengaged by the Company or any Parent or Subsidiary to render services and is\ncompensated for such services, and any director of the Company whether\ncompensated for such services or not, provided that if and in the event the\nCompany registers any class of any equity security pursuant to the Exchange Act,\nthe term Consultant shall thereafter not include directors who are not\ncompensated for their services or are paid only a director's fee by the Company.\n\n              (g)    'CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT' means \nthe absence of any interruption or termination of service as an Employee or \nConsultant.  Continuous Status as an Employee or Consultant shall not be \nconsidered interrupted in the case of:  (i) sick leave; (ii) military leave; \n(iii) any other leave of absence approved by the Administrator, provided \n\n                                     -6-\n\n\n\nthat such leave is for a period of not more than ninety (90) days, unless \nreemployment upon the expiration of such leave is guaranteed by contract or \nstatute, or unless provided otherwise pursuant to Company policy adopted from \ntime to time; or (iv) in the case of transfers between locations of the \nCompany or between the Company, its Subsidiaries or their respective \nsuccessors.  A change in status from an Employee to a Consultant or from a \nConsultant to an Employee will not constitute an interruption of Continuous \nStatus as an Employee or Consultant.\n\n              (h)    'EMPLOYEE' means any person, including officers and \ndirectors, employed by the Company or any Parent or Subsidiary of the \nCompany, with the status of employment determined based upon such minimum \nnumber of hours or periods worked as shall be determined by the Administrator \nin its discretion, subject to any requirements of the Code.  The payment by \nthe Company of a director's fee to a Director shall not be sufficient to \nconstitute 'employment' of such Director by the Company.\n\n              (i)    'EXCHANGE ACT' means the Securities Exchange Act of \n1934, as amended.\n\n              (j)    'FAIR MARKET VALUE' means, as of any date, the fair \nmarket value of Common Stock determined as follows:\n\n                            (i)    If the Common Stock is listed on any\n                                   established stock exchange or a national\n                                   market system including without limitation\n                                   the National Market of the National\n                                   Association of Securities Dealers, Inc.\n                                   Automated Quotation ('NASDAQ') System, its\n                                   Fair Market Value shall be the closing sales\n                                   price for such stock (or the closing bid, if\n                                   no sales were reported), as quoted on such\n                                   system or exchange, or the exchange with the\n                                   greatest volume of trading in Common Stock\n                                   for the last market trading day prior to the\n                                   time of determination, as reported in The\n                                   Wall Street Journal or such other source as\n                                   the Administrator deems reliable;\n\n                            (ii)   If the Common Stock is quoted on the Nasdaq\n                                   System (but not on the National Market\n                                   thereof) or regularly quoted by a recognized\n                                   securities dealer but selling prices are not\n                                   reported, its Fair Market Value shall be the\n                                   mean between the high bid and low asked\n                                   prices for the Common Stock for the last\n                                   market trading day prior to the time of\n                                   determination, as reported in The Wall Street\n                                   Journal or such other source as the\n                                   Administrator deems reliable; or\n\n                            (iii)  In the absence of an established market for \n                                   the Common Stock, the Fair Market Value \n                                   thereof shall be determined in good faith by\n                                   the Administrator at the Administrator's\n                                   discretion.  In making any such \n                                   determination, the Administrator may elect, \n                                   but shall not be obligated, to engage an \n                                   appraiser or investment banking firm to make\n                                   the determination of Fair Market Value and \n                                   such determination shall be conclusive and\n                                   binding.\n\n              (k)    'INCENTIVE STOCK OPTION' or 'ISO' means an Option \nintended to qualify as an incentive stock option within the meaning of \nSection 422 of the Code.\n\n                                     -7-\n\n\n\n              (l)    'NONQUALIFIED STOCK OPTION' means an Option not intended \nto qualify as an Incentive Stock Option, as designated in the applicable \nwritten option agreement.\n\n              (m)    'OPTION' means a stock option granted pursuant to this \nOption Agreement.\n\n              (n)    'OPTION AGREEMENT' means this Stock Option Agreement.\n\n              (o)    'OPTIONED STOCK' means the Common Stock subject to an \nOption.\n\n              (p)    'OPTIONEE' means an Employee or Consultant who receives \nan Option.\n\n              (q)    'PARENT' means a 'parent corporation,' whether now or \nhereafter existing, as defined in Section 424(e) of the Code, or any \nsuccessor provision.\n\n              (r)    'REPORTING PERSON' means an officer, director, or \ngreater than ten percent stockholder of the Company within the meaning of \nRule 16a-2 under the Exchange Act, who is required to file reports pursuant \nto Rule 16a-3 under the Exchange Act.\n\n              (s)    'RULE 16B-3' means Rule 16b-3 promulgated under the \nExchange Act, as the same may be amended from time to time, or any successor \nprovision.\n\n              (t)    'SECURITIES ACT' means the Securities Act of 1933, as \namended.\n\n              (u)    'SHARE' means a share of the Common Stock, as adjusted \nin accordance with Section 14.\n\n              (v)    'STOCK EXCHANGE' means any stock exchange or \nconsolidated stock price reporting system on which prices for the Common \nStock are quoted at any given time.\n\n              (w)    'SUBSIDIARY' means a 'subsidiary corporation,' whether \nnow or hereafter existing, as defined in Section 424(f) of the Code, or any \nsuccessor provision.\n\n                    [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]\n\n                                     -8-\n\n\n\n\n       This Agreement may be executed in two or more counterparts, each of \nwhich shall be deemed an original and all of which together shall constitute \none document.\n\n                                          NETWORK COMPUTER, INC.\n\n\n                                          By: \n                                               ------------------------------\n\n                                          Title: \n                                               ------------------------------\n\n       OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT \nTO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT OR CONSULTANCY \nAT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED \nTHIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES \nAND AGREES THAT NOTHING IN THIS AGREEMENT SHALL CONFER UPON OPTIONEE ANY \nRIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE \nCOMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE \nCOMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY \nTIME, WITH OR WITHOUT CAUSE.\n\n       Optionee has reviewed this Stock Option Agreement in its entirety, has \nhad an opportunity to obtain the advice of counsel prior to executing this \nOption and fully understands all provisions of the Option.  Optionee hereby \nagrees to accept as binding, conclusive and final all decisions or \ninterpretations of the Administrator upon any questions arising under this \nOption.\n\nDated:\n      -------------------------------        -------------------------------\n                                             Mitchell E. Kertzman\n\n                                     -9-\n\n\n\n                                     EXHIBIT A\n                                          \n                               NETWORK COMPUTER, INC.\n\n                                  EXERCISE NOTICE\n\n\nNetwork Computer, Inc.\n1000 Bridge Parkway\nRedwood Shores, CA  94065\n\n       1.     EXERCISE OF OPTION.  Effective as of today, _______________, \n199__, the undersigned ('OPTIONEE') hereby elects to exercise Optionee's \noption to purchase _____________ shares of the Common Stock (the 'SHARES') of \nNetwork Computer, Inc. (the 'COMPANY') under the Stock Option Agreement dated \nOctober 15, 1998 (the 'OPTION AGREEMENT').\n\n       2.     REPRESENTATIONS OF OPTIONEE.  Optionee acknowledges that \nOptionee has received, read and understood the Option Agreement and the \nInvestment Representation Statement attached as EXHIBIT B to the Option \nAgreement, and agrees to abide by and be bound by their terms and conditions. \n If applicable, Optionee has executed and delivered the Investment \nRepresentation Statement to the Company.  Optionee further represents that \nOptionee is purchasing the Shares for Optionee's own account for investment \nand not with a view to, or for sale in connection with, a 'distribution' of \nany of such Shares for purposes of the Securities Act of 1933, as amended \n(the 'SECURITIES ACT').\n\n       3.     COMPLIANCE WITH SECURITIES LAWS.  Optionee understands and \nacknowledges that the Shares have not been registered under the Securities \nAct and, notwithstanding any other provision of the Option Agreement to the \ncontrary, the exercise of any rights to purchase any Shares is expressly \nconditioned upon compliance with the Securities Act, all applicable state \nsecurities laws and all applicable requirements of any stock exchange or over \nthe counter market on which the Company's Common Stock may be listed or \ntraded at the time of exercise and transfer.  Optionee agrees to cooperate \nwith the Company to ensure compliance with such laws.\n\n       4.     FEDERAL RESTRICTIONS ON TRANSFER.  Optionee understands that \nthe Shares have not been registered under the Securities Act and therefore \ncannot be resold and must be held indefinitely unless they are registered \nunder the Securities Act or unless an exemption from such registration is \navailable and that the certificate(s) representing the Shares may bear a \nlegend to that effect.  Optionee understands that the Company is under no \nobligation to register the Shares and that an exemption may not be available \nor may not permit Optionee to transfer Shares in the amounts or at the times \nproposed by Optionee. Specifically, Optionee has been advised that Rule 144 \npromulgated under the Securities Act, which permits certain resales of \nunregistered securities, is not presently available with respect to the \nShares and, in any event requires that the Shares be fully paid for by means \nother than a promissory note\n\n\n\nsecured by the Shares themselves and then be held for at least one year (and \nin some cases two years) before they may be resold under Rule 144.\n\n       5.     RIGHTS AS STOCKHOLDER.  Until the stock certificate evidencing \nsuch Shares is issued (as evidenced by the appropriate entry on the books of \nthe Company or of a duly authorized transfer agent of the Company), no right \nto vote or receive dividends or any other rights as a stockholder shall exist \nwith respect to the optioned Shares, notwithstanding the exercise of the \nOption.  The Company shall issue (or cause to be issued) such stock \ncertificate promptly after the Option is exercised.  No adjustment will be \nmade for a dividend or other right for which the record date is prior to the \ndate the stock certificate is issued, except as provided in Section 14 of the \nOption Agreement.  \n\n              Optionee shall enjoy rights as a stockholder until such time as \nOptionee disposes of the Shares.\n       \n       6.     ESCROW OF SHARES.  For purposes of facilitating the enforcement \nof the provisions of this Exercise Notice, the Optionee agrees, immediately \nupon receipt of the certificate(s) for any Shares, to deliver such \ncertificate(s), together with an Assignment Separate from Certificate in the \nform attached to this Exercise Notice as EXHIBIT A executed by Optionee and \nby Optionee's spouse (if required for transfer), in blank, to the Secretary \nof the Company, or the Secretary's designee, to hold such certificate(s) and \nAssignment Separate from Certificate in escrow and to take all such actions \nand to effectuate all such transfers and\/or releases as are in accordance \nwith the terms of this Exercise Notice.  The Optionee hereby acknowledges \nthat the Secretary of the Company, or the Secretary's designee, is so \nappointed as the escrow holder with the foregoing authorities as a material \ninducement to make this agreement and that said appointment is coupled with \nan interest and is accordingly irrevocable. The Optionee agrees that said \nescrow holder shall not be liable to any party hereof (or to any other \nparty).  The escrow holder may rely upon any letter, notice or other document \nexecuted by any signature purported to be genuine and may resign at any time. \n The Optionee agrees that if the Secretary of the Company, or the Secretary's \ndesignee, resigns as escrow holder for any or no reason, the Board of \nDirectors of the Company shall have the power to appoint a successor to serve \nas escrow holder pursuant to the terms of this Exercise Notice.\n\n       7.     RESTRICTIONS BINDING ON TRANSFEREES.  All transferees of Shares \nor any interest therein will receive and hold such Shares or interest subject \nto the provisions of this Exercise Notice and the Option Agreement.  Any sale \nor transfer of the Company's Shares shall be void unless the provisions of \nthis Agreement are met.\n\n       8.     TAX CONSULTATION.  Optionee understands that Optionee may \nsuffer adverse tax consequences as a result of Optionee's purchase or \ndisposition of the Shares.  Optionee represents that Optionee has consulted \nwith any tax consultants Optionee deems advisable in connection with the \npurchase or disposition of the Shares and that Optionee is not relying on the \nCompany for any tax advice.\n\n                                     -2-\n\n\n\n       9.     RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.\n\n              (a)    LEGENDS.  Optionee understands and agrees that the \nCompany shall cause the legends set forth below or legends substantially \nequivalent thereto, to be placed upon any certificate(s) evidencing ownership \nof the Shares together with any other legends that may be required by state \nor federal securities laws:\n\n                     (i)    THE SECURITIES REPRESENTED HEREBY HAVE NOT\n                            BEEN REGISTERED UNDER THE SECURITIES ACT OF\n                            1933 (THE 'ACT') AND MAY NOT BE OFFERED,\n                            SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR\n                            HYPOTHECATED UNLESS AND UNTIL REGISTERED\n                            UNDER THE ACT OR, IN THE OPINION OF COUNSEL\n                            IN FORM AND SUBSTANCE SATISFACTORY TO THE\n                            ISSUER OF THESE SECURITIES, SUCH OFFER, SALE\n                            OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN\n                            COMPLIANCE THEREWITH.\n                     \n                     (ii)   THE SHARES REPRESENTED BY THIS CERTIFICATE\n                            ARE SUBJECT TO CERTAIN RESTRICTIONS ON\n                            TRANSFER AS SET FORTH IN THE STOCK OPTION\n                            AGREEMENT AND THE EXERCISE NOTICE BETWEEN\n                            THE ISSUER AND THE ORIGINAL HOLDER OF THESE\n                            SHARES, A COPY OF WHICH MAY BE OBTAINED AT\n                            THE PRINCIPAL OFFICE OF THE ISSUER.  SUCH\n                            TRANSFER RESTRICTIONS ARE BINDING ON\n                            TRANSFEREES OF THESE SHARES.\n\n              (b)    STOP-TRANSFER NOTICES.  Optionee agrees that, in order \nto ensure compliance with the restrictions referred to herein, the Company \nmay issue appropriate 'stop transfer' instructions to its transfer agent, if \nany, and that, if the Company transfers its own securities, it may make \nappropriate notations to the same effect in its own records.\n\n              (c)    REFUSAL TO TRANSFER.  The Company shall not be required \n(i) to transfer on its books any Shares that have been sold or otherwise \ntransferred in violation of any of the provisions of this Agreement or (ii) \nto treat as owner of such Shares or to accord the right to vote or pay \ndividends to any purchaser or other transferee to whom such Shares shall have \nbeen so transferred.\n\n       10.    MARKET STANDOFF AGREEMENT.  In connection with the initial \npublic offering of the Company's securities and upon request of the Company \nor the underwriters managing any underwritten offering of the Company's \nsecurities, Optionee hereby agrees not to sell, \n\n                                     -3-\n\n\nmake any short sale of, loan, grant any option for the purchase of, or \notherwise dispose of any Shares (other than those included in the \nregistration) without the prior written consent of the Company or such \nunderwriters, as the case may be, for such period of time (not to exceed 180 \ndays) from the effective date of such registration as may be requested by the \nCompany or such managing underwriters and to execute an agreement reflecting \nthe foregoing as may be requested by the underwriters at the time of the \npublic offering.\n\n       11.    SUCCESSORS AND ASSIGNS.  The Company may assign any of its \nrights under this Agreement to single or multiple assignees, and this \nAgreement shall inure to the benefit of the successors and assigns of the \nCompany.  Subject to the restrictions on transfer herein set forth, this \nAgreement shall be binding upon Optionee and his or her heirs, executors, \nadministrators, successors and assigns.\n\n       12.    INTERPRETATION.  Any dispute regarding the interpretation of \nthis Agreement shall be submitted by Optionee or by the Company forthwith to \nthe Company's Board of Directors, which shall review such dispute at its next \nregular meeting.  The resolution of such a dispute by the Board or committee \nshall be final and binding on the Company and on Optionee.\n\n       13.    GOVERNING LAW; SEVERABILITY.  This Agreement shall be governed \nby and construed in accordance with the laws of the State of California \nexcluding that body of law pertaining to conflicts of law.  Should any \nprovision of this Agreement be determined by a court of law to be illegal or \nunenforceable, the other provisions shall nevertheless remain effective and \nshall remain enforceable.\n\n       14.    NOTICES.  Any notice required or permitted hereunder shall be \ngiven in writing and shall be deemed effectively given upon personal delivery \nor upon deposit in the United States mail by certified mail, with postage and \nfees prepaid, addressed to the other party at its address as shown below \nbeneath its signature, or to such other address as such party may designate \nin writing from time to time to the other party.\n\n       15.    FURTHER INSTRUMENTS.  The parties agree to execute such further \ninstruments and to take such further action as may be reasonably necessary to \ncarry out the purposes and intent of this Agreement.\n\n       16.    DELIVERY OF PAYMENT.  Optionee herewith delivers to the Company \nthe full Exercise Price for the Shares.\n\n                                     -4-\n\n\n       17.    ENTIRE AGREEMENT.  The Notice of Stock Option Grant\/Option \nAgreement are incorporated herein by reference.  This Agreement and the \nNotice of Stock Option Grant\/Option Agreement constitute the entire agreement \nof the parties and supersede in their entirety all prior undertakings and \nagreements of the Company and Optionee with respect to the subject matter \nhereof, and is governed by California law except for that body of law \npertaining to conflict of laws.\n\nSubmitted by:                      Accepted by:\n\nOPTIONEE:                          NETWORK COMPUTER, INC.\n\n\n                                   By:\n-----------------------------         -----------------------------\n((Optionee))\n                                   Title: \n                                       -----------------------------\n\nAddress:    ((OptioneeAddress1))   Address:  1000 Bridge Parkway\n            ((OptioneeAddress2))             Redwood Shores, CA  94065\n\n\n       I, _____________________________, spouse of Optionee, have read and \nhereby approve the foregoing Exercise Notice.  In consideration of the \nCompany's granting my spouse the right to purchase the Shares as set forth in \nthe Exercise Notice, I hereby agree to be irrevocably bound by the Exercise \nNotice and Option Agreement and further agree that any community property or \nother such interest shall be similarly bound by the terms of the Exercise \nNotice.  I hereby appoint my spouse as my attorney-in-fact with respect to \nany amendment or exercise of any rights under the Exercise Notice and Option \nAgreement.\n\n\n                                               --------------------------------\n                                               Spouse of Optionee\n\n                                     -5-\n\n\n                                     EXHIBIT A\n\n                        ASSIGNMENT SEPARATE FROM CERTIFICATE\n\n\n       FOR VALUE RECEIVED and pursuant to that certain Exercise Notice \nbetween the undersigned and Network Computer, Inc., dated \n____________________, 199__ (the 'AGREEMENT') Optionee hereby sells, assigns \nand transfers unto ______________________ (__________) shares of the Common \nStock of Network Computer, Inc., standing in Optionee's name on the books of \nsaid corporation represented by Certificate No. ______ herewith and does \nhereby irrevocably constitute and appoint ___________________________________ \nto transfer said stock on the books of the within-named corporation with full \npower of substitution in the premises.  THIS ASSIGNMENT MAY ONLY BE USED AS \nAUTHORIZED BY THE EXERCISE NOTICE AND THE EXHIBITS THERETO.\n\n\nDate:  _____________, 19__.\n\n\n                                              Signature:\n\n\n\n                                              ----------------------------------\n                                              ((Optionee))\n\n\n\n                                              ----------------------------------\n                                              Spouse of Optionee (if applicable)\n\n\nInstruction:  Please do not fill in any blanks other than the signature line. \nThe purpose of this assignment is to enable the Company to exercise its \nrepurchase rights set forth in the Exercise Notice without requiring \nadditional signatures on the part of Optionee.\n\n\n\n                                     EXHIBIT B\n\n                        INVESTMENT REPRESENTATION STATEMENT\n\nOPTIONEE      :      ((Optionee))\n\nCOMPANY       :      Network Computer, Inc.\n\nSECURITY      :      Common Stock\n\nAMOUNT        :      ___________________ Shares\n\nDATE          :      ___________________, 199__\n\nIn connection with the purchase of the above-listed Securities, I, Optionee, \nrepresent to the Company the following:\n\n(a)    I am aware of the Company's business affairs and financial condition, \nand have acquired sufficient information about the Company to reach an \ninformed and knowledgeable decision to acquire the Securities.  I am \npurchasing these Securities for my own account for investment purposes only \nand not with a view to, or for the resale in connection with, any \n'DISTRIBUTION' thereof for purposes of the Securities Act of 1933, as amended \n(the 'SECURITIES ACT').\n\n              (b)    I understand that the Securities have not been \nregistered under the Securities Act in reliance upon a specific exemption \ntherefrom, which exemption depends upon, among other things, the bona fide \nnature of my investment intent as expressed herein.\n\n              (c)    I further understand that the Securities must be held \nindefinitely unless subsequently registered under the Securities Act or \nunless an exemption from registration is otherwise available.  Moreover, I \nunderstand that the Company is under no obligation to register the \nSecurities.  In addition, I understand that the certificate evidencing the \nSecurities will be imprinted with a legend which prohibits the transfer of \nthe Securities unless they are registered or such registration is not \nrequired in the opinion of counsel for the Company.\n\n              (d)    I am familiar with the provisions of Rule 701 and Rule \n144, each promulgated under the Securities Act, which, in substance, permit \nlimited public resale of 'restricted securities' acquired, directly or \nindirectly, from the issuer thereof, in a non-public offering subject to the \nsatisfaction of certain conditions.  Rule 701 provides that if the issuer \nqualifies under Rule 701 at the time of issuance of the Securities, such \nissuance will be exempt from registration under the Securities Act.  In the \nevent the Company later becomes subject to the reporting requirements of \nSection 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days \nthereafter the securities exempt under Rule 701 may be resold, subject to the \nsatisfaction of certain of the conditions specified by Rule 144, including \namong other things:  (1) the sale being made through a broker in an \nunsolicited 'broker's transaction' or in \n\n\n\ntransactions directly with a market maker (as said term is defined under the \nSecurities Exchange Act of 1934); and, in the case of an affiliate, (2) the \navailability of certain public information about the Company, and the amount \nof securities being sold during any three month period not exceeding the \nlimitations specified in Rule 144(e), if applicable.  Notwithstanding this \nparagraph (d), I acknowledge and agree to the restrictions set forth in \nparagraph (f) below.\n\n              In the event that the Company does not qualify under Rule 701 \nat the time of issuance of the Securities, then the Securities may be resold \nin certain limited circumstances subject to the provisions of Rule 144, which \nrequires among other things:  (1) the availability of certain public \ninformation about the Company; (2) the resale occurring not less than one \nyear after the party has purchased, and made full payment for, within the \nmeaning of Rule 144, the securities to be sold; and, in the case of an \naffiliate, or of a non-affiliate who has held the securities less than two \nyears, (3) the sale being made through a broker in an unsolicited 'broker's \ntransaction' or in transactions directly with a market maker (as said term is \ndefined under the Securities Exchange Act of 1934), and (4) the amount of \nsecurities being sold during any three month period not exceeding the \nspecified limitations stated therein, if applicable.  I UNDERSTAND THAT \nPAYMENT FOR THE SHARES WITH A PROMISSORY NOTE IS NOT DEEMED TO BE FULL \nPAYMENT UNDER RULE 144 UNLESS THE NOTE IS SECURED BY ASSETS OTHER THAN THE \nSHARES.\n\n              (e)    I understand that at such time in the future that I \nmight wish to sell the Securities, there may be no public market upon which \nto make such a sale, and that, even if such a public market then exists, the \nCompany may not be satisfying the current public information requirements of \nRule 144, and that, in such event, I will be precluded from selling the \nSecurities under Rule 144 even if I have satisfied the one-year minimum \nholding period.\n\n              (f)    I further understand that in the event all of the \napplicable requirements of Rule 144 or Rule 701 are not satisfied, \nregistration under the Securities Act, compliance with Regulation A, or some \nother registration exemption will be required; and that, notwithstanding the \nfact that Rule 144 and Rule 701 are not exclusive, the Staff of the \nSecurities and Exchange Commission has expressed its opinion that persons \nproposing to sell private placement securities other than in a registered \noffering and otherwise than pursuant to Rule 144 or Rule 701 will have a \nsubstantial burden of proof in establishing that an exemption from \nregistration is available for such offers or sales, and that such persons and \ntheir respective brokers who participate in such transactions do so at their \nown risk.\n\n                                             Optionee:\n\n\n                                             _______________________________\n                                             ((Optionee))\n\nDate:  ________________, 199_ _\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8051],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9539,9544],"class_list":["post-40201","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-liberate-technologies","corporate_contracts_industries-technology__software","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40201"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40201"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40201"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}