INDUCEMENT STOCK OPTION GRANT NOTICE
e.Digital Corporation (the “Company”) hereby grants to the Optionee named below, an employee of the
Company, as an inducement material to the Optionee’s entering into employment with the Company, a stock
option to purchase the number of shares of the Company’s common stock set forth below. This option is subject
to all of the terms and conditions as set forth herein and the Stock Option Agreement (attached hereto), which is
incorporated herein in its entirety.
ADDITIONAL TERMS/ACKNOWLEDGMENTS: This grant is a part of a total grant of 1,500,000 shares by
the Board as an inducement to your employment with the Company with the balance documented in a separate
option agreement. The undersigned Optionee acknowledges receipt of, and represents that the Optionee has
read, understands, accepts and agrees to the terms of this Grant Notice and the Stock Option Agreement.
Optionee hereby accepts the Option subject to all of its terms and conditions and further acknowledges that as of
the Date of Grant, this Grant Notice and the Stock Option Agreement set forth the entire understanding between
Optionee and the Company regarding the acquisition of stock in the Company for the shares so indicated and
supersede all prior oral and written agreements pertaining to this particular option.
NOTE: THE OPTIONEE IS SOLELY RESPONSIBLE FOR ANY ELECTION TO EXERCISE THE
OPTION, AND THE COMPANY SHALL HAVE NO OBLIGATION WHATSOEVER TO PROVIDE
NOTICE TO THE OPTIONEE OF ANY MATTER, INCLUDING, BUT NOT LIMITED TO, THE DATE
THE OPTION TERMINATES.
Date of Grant:
Shares Subject to Option:
1,000,000 common shares
Exercise Price Per Share:
Intended to be Incentive Stock Option:
Yes (Subject to limit)
Vesting Start Date
(First 125,000 shares vest 2/14/2006)
Subject to co