Except as discussed below, the option will vest as to 100% of the shares issuable thereunder on September , 2008, the fourth anniversary of the grant date, if Mr. Morgan is still employed by us throughout the vesting period and on that date

EX-10.4 4 f01648exv10w4.txt EXHIBIT 10.4 EXHIBIT 10.4 APPLIES TO ALL NQ GRANTS ISSUED UNDER THE 1997 EQUITY PLAN AFTER MARCH 23, 2004 NONSTATUTORY STOCK OPTION FIRST VIRTUAL COMMUNICATIONS, INC. (the "Company"), pursuant to its 1997 Equity Incentive Plan (the "Plan"), has granted to Optionee an option (the "Option") to purchase certain shares of the common stock of the Company ("Common Stock"), upon the terms and conditions set forth in the electronic notice of stock option grant (the "Notice") transmitted to or viewed online by Optionee via the Company's online option grant process on the E*Trade OptionsLink website, the terms of which Notice are incorporated herein by this reference. This Option is not intended to qualify and will not be treated as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). The grant hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees (including officers), directors or consultants. Defined terms not explicitly defined in this agreement but defined in the Plan shall have the same definitions as in the Plan. The details of your option are as follows: 1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of shares of Common Stock subject to this Option is as set forth in the Notice. 2. VESTING. Subject to the limitations contained herein, the shares will vest (become exercisable) in accordance with the vesting schedule set forth in the Notice, until either (i) you cease to provide services to the Company for any reason, or (ii) this Option becomes fully vested, or (iii) the Option otherwise terminates under the terms of the Plan. Notwithstanding anything to the contrary contained in the Notice, this Agreement or the Plan, and notwithstanding the fact that Optionee may be vested in shares hereunder, Optionee may not exercise this Option in the event the Company is unable to issue the shares upon such exercise in compliance with all applicable securities laws, as further reflected in paragraphs 5 and 6(c) below. 3. EXERCISE PRICE AND METHOD OF PAYMENT. (a) EXERCISE PRICE. The exercise price of this Option is that set forth in the Notice, being not less than 100% of the fair market value of the Common Stock on the date of grant of this Option. (b) METHOD OF PAYMENT. Payment of the exercise price per share is due in full upon exercise of all or any part of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: Payment of the exercise price per share in cash (including check) at the time of exercise; Payment pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds; Provided that at the time of exercise the Company's Common Stock is publicly traded and quoted regularly in the Wall Street Journal, payment by delivery of already-owned shares of Common Stock, held for the period required to avoid a charge to the Company's reported earnings, and owned free and clear of any liens, claims, encumbrances or security interests, which Common Stock shall be valued at its fair market value on the date of exercise; or Payment by a combination of the methods of payment permitted by subparagraph 3(b)(i) through 3(b)(iii) above. 4. WHOLE SHARES. This Option may not be exercised for any number of shares which would require the issuance of anything other than whole shares. 5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, this Option may not be exercised unless the shares issuable upon exercise of this Option are then registered under the Securities Act of 1933, as amended (the "Act") or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Act. 1 APPLIES TO ALL NQ GRANTS ISSUED UNDER THE 1997 EQUITY PLAN AFTER MARCH 23, 2004 6. TERM. The term of this Option commences on the date of grant as set forth in the Notice and expires on the tenth anniversary of said date of grant (the "Expiration Date"), unless this Option expires sooner as set forth below or in the Plan. In no event may this Option be exercised on or after the Expiration Date. Following the date of termination of Optionee's continuous status as an Employee, Officer, Director or Consultant with the Company or an Affiliate ("Continuous Status") for any or no reason (such final day of Continuous Status, the "Termination Date"), this Option shall be exercisable only as to shares of Common Stock that were vested as of the Termination Date as provided in paragraph 2 of this Option and then only for the applicable period specified in (i) and (ii) below (the "Post-Termination Exercise Period"). This Option shall terminate prior to the Expiration Date as follows: (i) in the case of an Optionee who is an Employee or Consultant, ninety (90) days after the Termination Date, or (ii) in the case of an Optionee who is an Officer or Director, nine (9) months after the Termination Date, unless: (a) such termination of Continuous Status as an Employee, Director or Consultant is due to your disability, in which event the option shall expire on the earlier of the Expiration Date set forth above or six (6) months following such termination of Continuous Status as an Employee, Director or Consultant; or (b) such termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs within thirty (30) days following your termination for any other reason, in which event this Option shall expire on the earlier of the Expiration Date set forth above or eighteen (18) months after your death; or (c) if during any part of the Post Termination Exercise Period you may not exercise your option solely because of the condition set forth in paragraph 5 above, then this Option will not expire until the earlier of the Expiration Date set forth above or until this Option shall have been exercisable for an aggregate period equal to the applicable Post-Termination Period after your termination of Continuous Status as an Employee, Director or Consultant; or (d) if your exercise of the option within thirty (30) days after termination of your Continuous Status as an Employee, Director or Consultant with the Company or with an Affiliate of the Company would result in liability under section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act), in which case the option will expire on the earlier of (i) the Expiration Date set forth above, (ii) the tenth (10th) day after the last date upon which exercise would result in such liability or (iii) six (6) months and ten (10) days after the termination of your Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company. However, this Option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on the Termination Date under the provisions of paragraph 2 of this Option. 7. EXERCISE. (a) This Option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require pursuant to subsection 11(e) of the Plan, or by such other method as may be implemented by the Company. (b) By exercising this Option you agree that as a precondition to the completion of any exercise of this Option, the Company may require you to enter an arrangement providing for the cash payment by you to the Company of any tax withholding obligation of the Company arising by reason of: (1) the exercise of this Option; (2) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (3) the disposition of shares acquired upon such exercise. You also agree that any exercise of this Option has not been completed and that the Company is under no obligation to issue any Common Stock to you until such an arrangement is established or the Company's tax withholding obligations are satisfied, as determined by the Company. 2 APPLIES TO ALL NQ GRANTS ISSUED UNDER THE 1997 EQUITY PLAN AFTER MARCH 23, 2004 8. TRANSFERABILITY. This Option is not transferable, except by will or by the laws of descent and distribution and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise this Option. 9. OPTION NOT A SERVICE CONTRACT. This Option is not an employment contract and nothing in this Option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in this Option shall obligate the Company or any Affiliate of the Company, or their respective shareholders, Board of Directors, officers, or employees to continue any relationship which you might have as a Director or Consultant for the Company or Affiliate of the Company. 10. NOTICES. Any notices provided for in this Option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the address specified below or at such other address as you hereafter designate by written notice to the Company. 11. GOVERNING PLAN DOCUMENT. This Option is subject to all the provisions of the Plan, a copy of which is attached hereto and its provisions are hereby made a part of this Option, including without limitation the provisions of Section 6 of the Plan relating to option provisions, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of this Option and those of the Plan, the provisions of the Plan shall control. Dated as of the Notice date. FIRST VIRTUAL COMMUNICATIONS, INC. By: /s/ ------------------------------------- Duly authorized on behalf of the Board of Directors ATTACHMENTS: First Virtual Communications, Inc. 1997 Equity Incentive Plan ACKNOWLEDGEMENT Optionee acknowledges and agrees that by clicking "I ACCEPT" on the OptionsLink Online Grant Agreements Web page that: (a) Optionee acknowledges receipt of the Notice, the Option and the attachments referenced therein and understands that all rights and liabilities with respect to this Option are set forth in the Notice, the Option and the Plan; and (b) Optionee acknowledges that as of the date of grant of the Option, the documents referred to above under (a) set forth the entire understanding between the undersigned Optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of the options and any other stock awards previously granted and delivered to the undersigned under stock award plans of the Company. 3