Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 @Entertainment, Inc. 185 1.02M
2: EX-2.1 Form of Contribution Agreement 20 57K
3: EX-2.2 Form of Purchase Agreement 10 33K
4: EX-3.1 Amended & Restated Certificate of Incorporation 18 73K
5: EX-3.2 Bylaws of @Entertainment, Inc. 40 174K
6: EX-3.3 Form of Shareholders Agreement 80 230K
7: EX-3.4 Termination Agreement 3 14K
8: EX-3.5 Form of Registration Rights Agreement 23 74K
9: EX-5 Opinion of Baker & McKenzie 2 13K
10: EX-8 Form of Opinion of Baker & McKenzie 1 10K
11: EX-9.1 Form of Voting Agreement 7 26K
12: EX-9.2 Side Letter 5 16K
15: EX-10.11 Employment Agreement 6 37K
16: EX-10.12 Stock Option Agreement 11 54K
17: EX-10.13 Form of Employment Agreement 5 37K
18: EX-10.14 Form of Employment Agreement 6 33K
19: EX-10.15 Stock Option Agreement 11 53K
20: EX-10.16 Form of Stock Option Plan 29 74K
21: EX-10.19 Agreement for Digital Transmission 96 233K
13: EX-10.2 Form of Management Agreement 3 12K
22: EX-10.20 Agreement for Digital Transmission 95 231K
23: EX-10.21 Agreement for Digital Transmission 95 235K
14: EX-10.3 Form of Service Agreement 12 38K
24: EX-11.1 Statement Re: Calculation of Per Share Earnings 1 10K
25: EX-15 Letter From Kpmg Peat Marwick LLP 1 10K
26: EX-21 List of Subsidiaries 1 11K
27: EX-23.1 Consent of Kpmg Peat Marwick LLP 1 11K
28: EX-23.2 Consent of Kpmg Peat Marwick LLP 1 11K
29: EX-27 ƒ Financial Data Schedule 1 11K
Exhibit 3.2
BYLAWS
OF
@ ENTERTAINMENT, INC.
TABLE OF CONTENTS
PAGE
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ARTICLE I OFFICES....................................................... -1-
Section 1. Registered Office................................ -1-
Section 2. Other Offices.................................... -1-
ARTICLE II STOCKHOLDERS.................................................. -1-
Section 1. Meetings......................................... -2-
Section 2. Notice of Meetings............................... -2-
Section 3. Manner of Giving Notice; Affidavit of Notice..... -2-
Section 4. Stockholder List................................. -2-
Section 5. Stockholder Action............................... -2-
Section 6. Quorum........................................... -3-
Section 7. Notice of Agenda Matters......................... -3-
Section 8. Proxies.......................................... -4-
Section 9. Voting........................................... -4-
Section 10. Voting of Certain Shares......................... -4-
Section 11. Treasury Stock................................... -4-
ARTICLE III DIRECTORS..................................................... -5-
Section 1. Powers........................................... -5-
Section 2. Election of Directors............................ -5-
Section 3. Dividends and Reserves........................... -6-
Section 4. Regular Meetings................................. -6-
Section 5. Special Meetings................................. -6-
Section 6. Quorum........................................... -6-
Section 7. Written Action................................... -7-
Section 8. Waiver of Notice................................. -7-
Section 9. Participation in Meetings by Conference
Telephone...................................... -7-
Section 10. Committees....................................... -7-
Section 11. Fees and Compensation of Directors............... -8-
Section 12. Rules............................................ -8-
Section 13. Interested Directors............................. -8-
ARTICLE IV OFFICERS...................................................... -8-
Section 1. Offices and Official Positions................... -8-
Section 2. Compensation..................................... -9-
Section 3. Succession....................................... -9-
Section 4. Resignations..................................... -9-
Section 5. Authority and Duties............................. -9-
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PAGE
[Download Table]
Section 6. Approval of Loans to Officers.................... -9-
ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS........................ -9-
Section 1. Contracts and Other Instruments.................. -9-
Section 2. Loans............................................ -10-
Section 3. Checks, Drafts, etc. ............................ -10-
Section 4. Deposits......................................... -10-
ARTICLE VI STOCKS....................................................... -10-
Section 1. Certificates..................................... -10-
Section 2. Transfer......................................... -10-
Section 3. Lost, Stolen or Destroyed Certificates........... -10-
Section 4. Record Date...................................... -11-
Section 5. Registered Owners................................ -12-
ARTICLE VII INDEMNIFICATION AND INSURANCE................................ -12-
Section 1. Indemnification.................................. -12-
Section 2. Contract......................................... -13-
Section 3. Non-exclusivity.................................. -13-
Section 4. Indemnification of Employees and Agents.......... -13-
Section 5. Insurance........................................ -13-
ARTICLE VIII GENERAL PROVISIONS........................................... -13-
Section 1. Fiscal Year...................................... -13-
Section 2. Corporate Seal................................... -14-
Section 3. Reliance upon Books, Reports and Records......... -14-
Section 4. Time Periods..................................... -14-
Section 5. Dividends........................................ -14-
Section 6. Construction and Definitions.................... -14-
ARTICLE IX AMENDMENTS................................................... -14-
Section 1. Amendments....................................... -14-
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BYLAWS
OF
@ ENTERTAINMENT, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of @ ENTERTAINMENT,
INC., a Delaware corporation (the "Corporation"), shall be located in the City
of Wilmington, County of New Castle, State of Delaware, and the name of its
registered agent is Corporation Service Company.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
STOCKHOLDERS
Section 1. Meetings.
a. Time and Place of Meetings. All meetings of the stockholders for the
election of directors or for any other purpose shall be held at such times and
places, either within or outside of the State of Delaware, as may be authorized
by the Board of Directors from time to time and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
b. Annual Meeting. Annual meetings of stockholders shall be held on a
date and time as shall be designated from time to time by the Board of
Directors, at which meeting the stockholders shall elect by plurality vote the
directors to succeed those whose terms expire and shall transact such other
business as may properly be brought before the meeting.
c. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may only be called by the Chairman of the Board
of Directors or by any two (2) directors. Business transacted at any special
meeting of the stockholders shall be limited to the purposes stated in the
notice of such meeting.
Section 2. Notice of Meetings. Written notice of every meeting of the
stockholders, stating the place, date and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called,
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote at such meeting,
except as otherwise provided herein or by law. When a meeting is adjourned to
another place, date or time, written notice need not be given of the adjourned
meeting if the place, date and time thereof are announced at the meeting at
which the adjournment is taken; provided, however, that if the adjournment is
for more than thirty (30) days, or if after the adjournment a new record date
is fixed for the adjourned meeting, written notice of the place, date and time
of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting. Notice of the time, place and purpose of
any meeting of the stockholders may be waived in writing either before or after
such meeting and will be waived by any stockholder by such stockholder's
attendance at the meeting in person or by proxy. Any stockholder so waiving
notice of such a meeting shall be bound by the proceedings of any such meeting
in all respects as if due notice thereof had been given.
At a special meeting, notice of which has been given in accordance with
this Section 2, action may not be taken with respect to business, the general
nature of which has not been stated in such notice. At an annual meeting,
action may be taken with respect to business stated in the notice of such
meeting, given in accordance with this Section 2 and with respect to any other
business as may properly come before the meeting.
Section 3. Manner of Giving Notice; Affidavit of Notice. Written notice
of any meeting of stockholders, if mailed, is given when deposited in the
United States mail, postage prepaid, directed to the stockholder at his address
as it appears on the records of the Corporation. An affidavit of the Secretary
or an assistant secretary or of the transfer agent of the Corporation that the
notice has been given shall, in the absence of fraud, be prima facie evidence
of the facts stated therein.
Section 4. Stockholder List. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten (10) days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at such meeting, arranged in alphabetical order, and showing the address
of each such stockholder and the number of shares registered in the name of
each such stockholder. Such list shall be open to examination of any
stockholder of the Corporation during ordinary business hours, for any purpose
germane to the meeting, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of meeting during the entire time
thereof, and subject to the inspection for any purpose germane to the meeting
of any stockholder who may be present.
Section 5. Stockholder Action. Any action required or permitted to be
taken by the stockholders of the Corporation shall be effected at a duly called
annual or special meeting of such holders and shall not be effected by a
consent in writing by such holders; provided, however, that any
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action required to be taken by the stockholders of the Corporation may be
effected by a consent to such action signed by the holders of the class of
stock entitled to vote thereon if approved by not less than a two-thirds (2/3)
vote of the Continuing Directors (as defined in the Certificate of
Incorporation). All such consents shall be filed with the corporate records of
the Corporation.
Section 6. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by law or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented.
At such adjourned meeting at which a quorum is present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed.
Section 7. Notice of Agenda Matters. At any annual or special meeting of
stockholders, only such business shall be conducted as shall have been brought
before the meeting by or at the direction of the Board of Directors or by any
stockholder who complies with the procedures set forth in this Section 7. For
business properly to be brought before the annual meeting by a stockholder, the
stockholder must have given timely notice thereof in proper written form to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received by the Secretary of the Corporation not
less than one hundred twenty (120) days prior to the anniversary date of the
Corporation's notice of annual meeting provided with respect to the previous
year's annual meeting; provided, however, that in the event that less than
forty (40) days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be timely must
be received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. To be in properly written form, a
stockholder's notice to the Secretary shall set forth in writing as to each
matter the stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting; (ii) the name
and address, as they appear on the Corporation's books, of the stockholder
proposing such business; (iii) the class and number of shares of the
Corporation which are beneficially owned by the stockholder; and (iv) any
material interest of the stockholder in such business. Notwithstanding
anything in these Bylaws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 7.
The chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 7; and if he should
so determine, then he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
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Section 8. Proxies. At every meeting of the stockholders, each
stockholder having the right to vote thereat shall be entitled to vote in
person or by proxy. Such proxy shall be appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than three (3) years
prior to such meeting, unless such proxy provides for a longer period; and it
shall be filed with the Secretary of the Corporation before, or at the time of,
the meeting.
Section 9. Voting. The stockholders entitled to vote at any meeting of
stockholders shall be determined in accordance with the provisions of Section 4
of Article VI of these Bylaws, subject to the provisions of Sections 217 and
218 of the General Corporation Law of Delaware (relating to voting rights of
fiduciaries, pledgors and joint owners of stock and to voting trusts and other
voting agreements).
Except as otherwise provided by statute or by the Certificate of
Incorporation, each stockholder shall be entitled at every meeting of the
stockholders to one vote for each share of stock having voting power standing
in the name of such stockholder on the books of the Corporation on the record
date for the meeting and such votes may be cast either in person or by written
proxy. Every proxy must be executed in writing by the stockholder or his or
her duly authorized attorney. All elections of directors shall be by written
ballot, unless otherwise provided in the Certificate of Incorporation. When a
quorum is present at any meeting, the vote of the holders of a majority of the
stock which has voting power present in person or represented by proxy and
which has actually voted shall decide any question properly brought before such
meeting, unless the question is one upon which by express provision of law, the
Certificate of Incorporation or these Bylaws, a different vote is required, in
which case such express provision shall govern and control the decision of such
question.
Section 10. Voting of Certain Shares. Shares standing in the name of
another corporation, domestic or foreign, and entitled to vote may be voted by
such officer, agent or proxy as the bylaws of such corporation may prescribe
or, in the absence of such provision, as the board of directors of such
corporation may determine. Shares standing in the name of a deceased person, a
minor or an incompetent and entitled to vote may be voted by his administrator,
executor, guardian or conservator, as the case may be, either in person or by
proxy. Shares standing in the name of a trustee, receiver or pledgee and
entitled to vote maybe voted by such trustee, receiver or pledgee either in
person or by proxy as provided by Delaware law.
Section 11. Treasury Stock. Shares of its own stock belonging to the
Corporation or to another corporation, if a majority of the shares entitled to
vote in the election of directors of such other corporation is held by the
Corporation, shall not be voted at any meeting and shall not be counted in
determining the total number of outstanding shares for the purpose of
determining whether a quorum is present. Nothing in this section shall be
construed to limit the right of the Corporation to vote shares of its own stock
held by it in a fiduciary capacity.
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ARTICLE III.
DIRECTORS
Section 1. Powers. The business and affairs of the Corporation shall be
managed by or under the direction of its Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as
are not by statute or by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the stockholders.
Section 2. Election of Directors.
a. Number and Term of Office. The Board of Directors shall
consist of at least one (1) and not more than nine (9) directors. The
authorized number of directors of the Corporation shall be set initially at
seven (7), and shall be subject to change as set from time to time pursuant to a
resolution duly adopted by a majority of the Board of Directors then in office.
The directors shall be classified, with respect to the time for which they
severally hold office, into three (3) classes, as nearly equal in number as
possible as determined from time to time pursuant to a resolution duly adopted
by a majority of the Board of Directors then in office. Upon the effective date
of the Corporation's initial public offering pursuant to the Securities Act of
1933, as amended, the authorized number of directors of the Corporation shall be
increased to seven (7) the first class shall initially consist of two (2)
directors, the second class shall initially consist of two (2) directors and the
third class shall initially consist of three (3) directors. At each annual
election held after such classification, directors shall be chosen for a full
term to succeed those whose terms expire. Any decrease in the authorized number
of directors shall not be effective until the expiration of the term of the
directors then in office, unless, at the time of such decrease there shall be
vacancies on the Board of Directors which are being eliminated by such decrease.
b. Resignations and Vacancies. Any director may resign at any
time by giving written notice to the Chairman of the Board of Directors, the
Chief Executive Officer or the Board of Directors. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective. If, at any other
time than the annual meeting of the stockholders, any vacancy occurs in the
Board of Directors caused by resignation, death, retirement, disqualification or
removal from office of any director or otherwise, or any new directorship is
created by an increase in the authorized number of directors pursuant to Section
2(a) of Article III of these Bylaws, a majority of the directors then in office,
although less than a quorum, may choose a successor, or fill the newly created
directorship, and the director so chosen shall hold office until the next annual
election of directors by the stockholders and until his successor shall be duly
elected and qualified, unless sooner displaced.
c. Notification of Nominations. Subject to the rights of
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon
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liquidation, nominations for the election of directors may be made by the Board
of Directors or a proxy committee appointed by the Board of Directors or by any
stockholder entitled to vote in the election of directors generally. However,
any such stockholder may nominate one or more persons for election as directors
at a meeting only if such stockholder has given timely notice in proper written
form of his intent to make such nomination or nominations. To be timely, a
stockholder's notice must be delivered to or mailed and received by the
Secretary of the Corporation not later than one hundred twenty (120) days prior
to such meeting; provided, however, that in the event that less than forty (40)
days' notice or prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must be received
not later than the close of business on the tenth (10th) day following the date
on which such notice of the date of such meeting was mailed or such public
disclosure was made. To be in proper written form, a stockholder's notice to
the Secretary shall set forth: (i) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be nominated;
(ii) a representation that the stockholder is a holder of record of stock of
the Corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified
in the notice; (iii) a description of all arrangements or understandings
between the stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by the stockholder; (iv) such other information regarding each
nominee proposed by such stockholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (v) the consent of each nominee to
serve as a director of the Corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
Section 3. Dividends and Reserves. Dividends on stock of the Corporation
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, in shares of
stock or otherwise in the form, and to the extent, permitted by law. The Board
of Directors may set apart, out of any funds of the Corporation available for
dividends, a reserve or reserves for working capital or for any other lawful
purpose, and also may abolish any such reserve in the manner in which it was
created.
Section 4. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice immediately after the annual meeting of the
stockholders and at such other time and place as shall from time to time be
determined by the Board of Directors.
Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board of Directors, the Chief Executive
Officer, the Secretary of the Corporation, or any two (2) directors.
Section 6. Quorum. At all meetings of the Board of Directors, a majority
of the total number of directors then in office shall constitute a quorum for
the transaction of business, and the act of a majority of the directors present
at any meeting at which there is a quorum shall be the
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act of the Board of Directors, except as may be otherwise specifically provided
by statute or by the Certificate of Incorporation. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present thereat
may adjourn the meeting from time to time to another place, time or date,
without notice other than announcement at the meeting, until a quorum shall be
present.
Section 7. Written Action. Any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes or proceedings of the Board of Directors or Committee.
Section 8. Waiver of Notice. The transactions of any meeting of the
Board of Directors or any committee, however called and noticed or wherever
held, shall be valid as though had at a meeting duly held after regular call
and notice, if a quorum be present and if, either before or after the meeting,
each of the directors not present signs a written waiver of notice, or a
consent to hold such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the Corporate records or
made a part of the minutes of the meeting.
Section 9. Participation in Meetings by Conference Telephone. Members of
the Board of Directors, or any committee designated by the Board of Directors,
may participate in a meeting of the Board of Directors, or any such committee,
by means of conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Section 10. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation and each to have such lawfully delegable powers and duties as the
Board of Directors may confer. Each such committee shall serve at the pleasure
of the Board of Directors. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Except as otherwise
provided by law, any such committee, to the extent provided in the resolution
of the Board of Directors, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall have
the power or authority in reference to approving, adopting or recommending to
the stockholders any action or matter expressly required by law to be submitted
to stockholders for approval, or adopting, amending or repealing these Bylaws
of the Corporation. Any committee or committees so designated by the Board of
Directors shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. Unless otherwise prescribed
by the Board of Directors, a majority of the members of the committee shall
constitute a quorum for the transaction of business, and the act of a majority
of the members present at a meeting at which there is a quorum shall be the act
of such committee.
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Each committee shall prescribe its own rules for calling and holding
meetings and its method of procedure, subject to any rules prescribed by the
Board of Directors, and shall keep a written record of all actions taken by it.
Section 11. Fees and Compensation of Directors. Each director may receive
such fees and other compensation, along with reimbursement of expenses incurred
on behalf of the Corporation or in connection with attendance at meetings, as
the Board of Directors may from time to time determine. No such payment of
fees or other compensation shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving fees and
compensation for such services.
Section 12. Rules. The Board of Directors may adopt such special rules
and regulations for the conduct of their meetings and the management of the
affairs of the Corporation as they may deem proper, not inconsistent with law,
the Certificate of Incorporation or these Bylaws.
Section 13. Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers is or are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because the directors or officers are present
at or participate in the meeting of the Board of Directors or the committee
thereof which authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose if: (i) the material facts as to his
or their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the
Board of Directors or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his or their relationship or interest and as to
the contract or transaction is specifically approved in good faith by vote of
the shareholders; or (iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified by the Board
of Directors, a committee thereof, or the stockholders. Interested directors
may be counted in determining the presence of a quorum at a meeting of the
Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IV.
OFFICERS
Section 1. Offices and Official Positions. The officers of the
Corporation shall be chosen by the Board of Directors and may include a
Chairman of the Board of Directors (who must be a director as chosen by the
Board of Directors) and shall include a Chief Executive Officer, one or more
Vice Presidents (if so elected by the Board of Directors), a Secretary and a
Chief Financial Officer. The Board of Directors also may appoint a Treasurer
and such Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers as the Board of Directors
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shall determine. Any two or more offices may be held by the same person. With
the exception of the Chairman of the Board of Directors, none of the officers
need be a director, a stockholder of the Corporation or a resident of the State
of Delaware.
Section 2. Compensation. The compensation of all officers and agents of
the Corporation who are also directors of the Corporation shall be fixed by the
Board of Directors. The Board of Directors may delegate the power to fix the
compensation of other officers and agents of the Corporation to a principal
officer of the Corporation or a committee of the Board of Directors.
Section 3. Succession. The officers of the Corporation shall hold office
until their successors are duly elected and qualified. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy occurring
in any office of the Corporation may be filled by the Board of Directors.
Section 4. Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors (or to a principal officer or a
committee of the Board of Directors if the Board of Directors has delegated to
such principal officer or committee the power to appoint and to remove such
officer). The resignation of any officer shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice;
unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
Section 5. Authority and Duties. Each of the officers of the Corporation
shall have such authority and shall perform such duties incident to each of
their respective offices and such other duties as may be specified from time to
time by the Board of Directors in a resolution which is not inconsistent with
law, the Certificate of Incorporation or these Bylaws.
Section 6. Approval of Loans to Officers. The Corporation may lend money
to, or guarantee any obligation of, or otherwise assist any officer or any
other employee of the Corporation or of its subsidiary, including any officer
or employee who is a director of the Corporation or its subsidiary, whenever,
in the judgment of the directors, such loan, guaranty or assistance may
reasonably be expected to benefit the Corporation. The loan, guaranty or other
assistance may be with or without interest and may be unsecured, or secured in
such manner as the Board of Directors shall approve, including, without
limitation, a pledge of shares of stock of the Corporation. Nothing contained
in this section shall be deemed to deny, limit or restrict the powers of
guaranty or warranty of the Corporation at common law or under any statute.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts and Other Instruments. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into any contract
or execute and deliver any
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instrument in the name of and on behalf of the Corporation, or of any division
thereof, and such authority may be general or confined to specific instances.
Section 2. Loans. No loans in excess of ten million dollars
($10,000,000.00) shall be contracted on behalf of the Corporation, or any
division thereof, and no evidence of indebtedness shall be issued in the name
of the Corporation or any division thereof, unless authorized by a resolution
of the Board of Directors.
Section 3. Checks, Drafts, etc. All checks, demands, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the Corporation, or any division thereof, shall be signed
by such officer or officers, agent or agents of the Corporation, and in such
manner, as shall from time to time be authorized by the Board of Directors.
Section 4. Deposits. All funds of the Corporation, or any division
thereof, not otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or other depositories
as the Board of Directors may select.
ARTICLE VI
STOCKS
Section 1. Certificates. Certificates representing shares of stock of
the Corporation shall be in such form as shall be determined by the Board of
Directors, subject to applicable legal requirements. Such certificates shall
be numbered and their issuance recorded in the books of the Corporation, and
each such certificate shall exhibit the respective holder's name and the number
of shares and shall be signed by, or in the name of the Corporation by, the
Chairman of the Board of Directors and the Secretary or an Assistant Secretary
or the Treasurer or an Assistant Treasurer of the Corporation and shall bear
the corporate seal. Where any such certificate is countersigned by a transfer
agent or a registrar other than the Corporation or its employee, the signatures
of any such officers of the Corporation and the seal of the Corporation, if
any, upon such certificates may be facsimiles, engraved or printed.
Section 2. Transfer. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue, or to cause its
transfer agent to issue, a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.
Section 3. Lost, Stolen or Destroyed Certificates. The Chief Executive
Officer or the Board of Directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact, satisfactory to the Chief Executive Officer,
-10-
by the person claiming the certificate of stock to be lost, stolen or
destroyed. As a condition precedent to the issuance of a new certificate or
certificates, the Chief Executive Officer may require the owner of such lost,
stolen or destroyed certificate or certificates to give the Corporation a bond
in such sum and with such surety or sureties as the Chief Executive Officer may
direct as indemnity against any claims that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting. If no record date is fixed by the Board of Directors, the record date
for determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
Subject to the provisions of Section 5 of Article II of these Bylaws, in
order that the Corporation may determine the stockholders entitled to consent
to corporate action in writing without a meeting, the Board of Directors may
fix a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required
by this chapter, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in Delaware, its principal
place of business, or an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. If no record date has
been fixed by the Board of Directors and prior action by the Board of Directors
is required by law, then the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting shall be at the
close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date
-11-
shall be not more than sixty (60) days prior to such action. If no record date
is fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
Section 5. Registered Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise required
by law.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
Section 1. Indemnification. The Corporation, to the fullest extent
permitted by the General Corporation Law of the State of Delaware, including,
without limitation, to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware (as that section may be
amended and supplemented from time to time), indemnify any director, officer or
trustee which it shall have power to indemnify under Section 145 against any
expenses, liabilities or other matters referred to in or covered by that
section. The indemnification provided for in this Article (i) shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any Bylaw, agreement or vote of stockholders or disinterested directors
or otherwise, both as to action in their official capacities and as to action
in another capacity while holding such office, (ii) shall continue as to a
person who has ceased to be a director, officer or trustee and (iii) shall
inure to the benefit of the heirs, executors and administrators of such person.
The Corporation's obligation to provide indemnification under this Article
shall be offset to the extent of any other source of indemnification or any
otherwise applicable insurance coverage under a policy maintained by the
Corporation or any other person.
Expenses incurred by a director or officer of the Corporation in defending
a civil or criminal action, suit or proceeding by reason of the fact that he is
or was a director or officer of the Corporation (or was serving at the
Corporation's request as a director or officer of another corporation) shall be
paid by the Corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation as authorized by
relevant sections of the General Corporation Law of the State of Delaware.
To assure indemnification under this Article of all such persons who are
determined by the Corporation or otherwise to be or to have been "fiduciaries"
of any employee benefit plan of the Corporation which may exist from time to
time, such Section 145 shall, for the purposes of this Article, be interpreted
as follows: an "other enterprise" shall be deemed to include such employee
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benefit plan, including, without limitation, any plan of the Corporation which
is governed by the Act of Congress entitled the "Employee Retirement Income
Security Act of 1974," as amended from time to time; the Corporation shall be
deemed to have requested a person to serve as a fiduciary of an employee
benefit plan where the performance by such person of his duties to the
Corporation also imposes duties on, or otherwise involves services by, such
person to the plan or participants or beneficiaries of the plan, excise taxes
assessed on a person with respect to an employee benefit plan pursuant to such
Act of Congress shall be deemed "fines"; and action taken or omitted by a
person with respect to an employee benefit plan in the performance of such
person's duties for a purpose reasonably believed by such person to be in the
interest of the participants and beneficiaries of the plan shall be deemed to
be for a purpose which is not opposed to the best interests of the Corporation.
Section 2. Contract. The provisions of Section 1 of this Article VII
shall be deemed to be a contract between the Corporation and each director and
officer who serves in such capacity at any time while such Bylaw is in effect,
and any repeal or modification thereof shall not affect any rights or
obligations then existing with respect to any state of facts then or
theretofore existing or any action, suit or proceeding theretofore or
thereafter based in whole or in part upon any such state of facts.
Section 3. Non-exclusivity. The rights of indemnification provided by
this Article VII shall not be deemed exclusive of any other rights to which any
director or officer of the Corporation may be entitled apart from the
provisions of this Article VII.
Section 4. Indemnification of Employees and Agents. The Board of
Directors in its discretion shall have the power on behalf of the Corporation
to indemnify any person, other than a director or officer, made a party to any
action, suit or proceeding by reason of the fact that such person, or such
person's testator or intestate, is or was an employee or agent of the
Corporation.
Section 5. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of the General
Corporation Law of Delaware.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
fixed from time to time by resolution of the Board of Directors.
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Section 2. Corporate Seal. The Board of Directors may adopt a corporate
seal and use the same by causing it or a facsimile copy thereof to be impressed
or affixed or reproduced or otherwise.
Section 3. Reliance upon Books, Reports and Records. Each director, each
member of a committee designated by the Board of Directors, and each officer of
the Corporation shall, in the performance of his or her duties, be fully
protected in relying in good faith upon the records of the Corporation and upon
such information, opinions, reports or statements presented to the Corporation
by any of the Corporation's officers or employees, or committees of the Board
of Directors, or by any other person as to matters the director, committee
member or officer believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on
behalf of the Corporation.
Section 4. Time Periods. In applying any provision of these Bylaws which
requires that an act be done or not be done a specified number of days prior to
an event or that an act be done during a period of a specified number of days
prior to an event, calendar days shall be used, the day of the doing of the act
shall be excluded and the day of the event shall be included.
Section 5. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to statute. Dividends may be paid in cash, in property, or
in shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
Before payment of any dividend, there may be set aside out of any funds of
the Corporation available for dividends such sum or sums as the directors from
time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the Corporation, or for such other purposes as
the directors shall think conducive to the interest of the Corporation, and the
directors may modify or abolish any such reserve in the manner in which it was
created.
Section 6. Construction and Definitions. Unless the context requires
otherwise, the general provisions, rules of construction and definitions in the
General Corporation Law of the State of Delaware shall govern the construction
of these Bylaws.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. Subject to the provisions of the Certificate of
Incorporation, these Bylaws may be altered, amended or repealed or new Bylaws
may be adopted by the stockholders or by the Board of Directors, when such
power is conferred upon the Board of
-14-
Directors by the Certificate of Incorporation, at any regular meeting of the
stockholders or of the Board of Directors or at any special meeting thereof duly
called for that purpose if notice of such alteration, amendment, repeal or
adoption of new Bylaws be contained in the notice of such special meeting.
Subject to the laws of the State of Delaware, the Certificate of Incorporation
and these Bylaws, the Board of Directors may, by majority vote of those present
at any meeting at which a quorum is present, amend these Bylaws, or enact such
other bylaws as in their judgment may be advisable for the regulation of the
conduct of the affairs of the Corporation.
-15-
Exhibit 10.15
STOCK OPTION AGREEMENT BETWEEN
DAVID WARNER
AND @ ENTERTAINMENT, INC.
This Stock Option Agreement ("Option Agreement") is made effective as
of June 23, 1997 (the "Effective Date"), by and between David Warner ("Warner")
and @ Entertainment, Inc., a Delaware corporation (the "Company").
1. Grant of Option and Option Period.
a. The Company hereby grants Warner an option (the "Option") to
purchase one hundred thirty one thousand (131,000) shares (the "Shares") of
the Company's common stock (the "Common Stock"), with a par value of $0.01 per
share, pursuant to the terms and conditions set forth in this Option Agreement.
The exercise price for the Option (the "Exercise Price") shall be fifteen
dollars and twenty-four cents (U.S. $15.24) per share.
b. The option to purchase twenty-six thousand two hundred (26,200)
of these Shares will vest each year on the anniversary date of the Effective
Date beginning with the first anniversary of the Effective Date, provided,
however, that no portion of such option shall vest after the date (the "Cut-Off
Date") that is the earlier of (i) the date that the Employment Agreement (as
described in Section 16 of this Agreement) is terminated, and (ii) the date on
which the Company send Warner a notice referred to in Section II of the
Employment Agreement.
c. If Warner's employment with the Company is terminated for any
reason, Warner shall have only sixty (60) days after the Cut-Off Date to
exercise that portion of the Option that has vested as of the Cut-Off Date, and
Warner shall have no right to exercise any portion of the Option that has not
then vested.
d. Notwithstanding any other provision of this Option Agreement,
the Option shall expire and be of no further force or effect with respect to
any Shares on the earlier to occur of (i) the tenth anniversary of the
Effective Date or (ii) sixty days after the date that Warner ceases to be an
employee of the company for any reason whatsoever (including but not limited to
Warner's death, disability, voluntary termination or involuntary termination).
e. Each exercise of the Option shall reduce, by an equal number
the total number of shares of Company Common Stock that may thereafter be
purchased by Warner under the Option.
2. Manner of Exercise.
Subject to the conditions and restrictions contained in Section 3 below, the
Option shall be exercised by delivering written notice of exercise to the
Secretary of the Company. Such notice shall be irrevocable and must be
accompanied by payment in cash, banker's draft or such other form of
consideration as the Company may approve, and a signed Subscription Agreement,
reasonably acceptable to both parties.
1
3. Non-transferability.
Neither this Option nor any interest therein may be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner (other than by gifts in
trust to family members, will or by the laws of descent and distribution during
the option period described in Section 1). This Option is not assignable by
operation of law or subject to execution, attachment or similar process. During
Warner's lifetime, the Option can only be exercised by Warner. Any attempted
sale, pledge, assignment, hypothecation or other transfer of the Option or any
interest therein contrary to the provisions hereof, or the levy of any
execution, attachment or similar process upon the Option or any interest
therein shall be null and void and without force or effect. No transfer of the
Option by gift in trust to a family member, by will or by the laws of descent
and distribution shall be effective to bind the Company unless the Company shall
have been furnished written notice thereof executed by the trustee(s) of a
trust established for a family member or the personal representative of the
estate of Warner which shall be accompanied by an authenticated copy of the
documents appointing such trustee(s) or of the letters testamentary appointing
such personal representative, or such other evidence as the Company may deem
reasonably necessary to establish the validity of the transfer, and also
evidence as the Company may deem reasonably necessary to establish the
acceptance by the transferee or transferees of the terms and conditions of the
Option. The terms of the Option transferred by will or by the laws of descent
and distribution shall be binding upon the executors, administrators, heirs and
successors of Warner. The terms of the Option transferred in trust shall be
binding upon the trustee(s) of such trust.
4. Adjustment to the Event of Change in Stock.
In the event of any change in the outstanding Common Stock of the Company due to
stock dividends, recapitalizations, reorganizations, mergers, consolidations,
split-ups, rights offering, warrants, or exchange of shares, the number and kind
of the Shares and/or the purchase price per Share will be appropriately
adjusted, upwards or downwards, consistent with such change. The reasonable
determination of the Company regarding any adjustment will be final and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of the Shares.
5. Restrictions on Transfer of the Shares.
a. For as long as Warner is an employee of the Company or
any Associated Company (as that term is used in the Employment Agreement that
is described in Section 16 of this Option Agreement;), Warner shall not
transfer any Shares to any person or entity other than the Company, unless such
shares shall have been registered pursuant to a Public Offering.
b. After Warner is no longer an employee of the Company
or any Associated Company and provided further that such shares shall not have
been registered pursuant to a Public Offering, Warner shall not sell, encumber,
pledge, transfer, hypothecate, assign or otherwise dispose of any of the Shares
until Warner shall have first offered to sell such Shares to the Company (the
"Offer") in accordance with the following provisions.
c. The Offer made pursuant to Subsection (b) above shall
be in writing, and shall state that Warner offers to sell to the Company a
specified number of the Shares owned by Warner. For every Offer of the
shares pursuant to Subsection (b) above, the Company shall have a period of
fifteen (15) days from the time of receiving the Offer to accept it; such
acceptance shall be in writing and shall be sent to Warner.
2
d. The purchase price of any of the Shares sold pursuant to the
provisions of Subsection (b) above shall be equal to the price offered to
Warner for such shares by a bona fide third party purchaser, as evidenced by a
written offer to purchase executed by such third party. The purchase price
shall be paid to Warner in cash within fifteen (15) days of the Company's
acceptance of the Offer. If any of the Shares which are offered for purchase
pursuant to the provisions of Subsection (c) above are not accepted for
purchase by the Company within the time limitations described in Subsection
(c), Warner may transfer such shares to such bona fide third party purchaser in
accordance with the terms of such purchaser's offer to purchase referred to in
this Subsection (d).
e. As a condition to the transfer of any of the shares issued
pursuant to this Option Agreement, the Company may require an opinion of
Counsel, reasonably satisfactory to the Company, to the effect that such
transfer will not be in violation of the Securities Act of 1933, as amended
(such Act, or any similar Federal statute then in effect, being hereinafter
referred to as the "Act"), or any other applicable securities laws, rules or
regulations, or that such transfer has been registered under Federal and all
other applicable securities laws.
f. Unless and until the Company shall have received a legal
opinion described in subparagraph (e) hereof, all certificates evidencing any
of the Shares, whether upon initial issuance or any transfer thereof, shall
bear the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER
SECURITIES LAWS, AND THEREFORE CANNOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR ASSIGNED UNLESS THEY ARE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND UNDER ALL OTHER APPLICABLE SECURITIES LAWS,
OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH THE
PROVISIONS OF THAT CERTAIN STOCK OPTION AGREEMENT, EFFECTIVE AS OF JUNE
23, 1997, BETWEEN DAVID WARNER AND @ ENTERTAINMENT, INC., A COPY OF
WHICH IS ON FILE IN THE OFFICE OF THE SECRETARY OF @ ENTERTAINMENT, INC.
6. No Stock Rights.
Warner shall not be entitled to vote, be deemed the holder of any Shares, have
the right to receive dividends with respect to any Shares, or otherwise have
any of the rights of a stockholder of the Company with respect to any Shares,
unless and until Warner has exercised the Option with respect to such Shares in
accordance with the terms and conditions of this Option Agreement.
7. Reservation and Issuance of Shares.
a. The Company will at all times have authorized, and reserve and
keep available, free from preemptive rights, for the purpose of enabling it to
satisfy any obligation to issue the number of shares of Common Stock
deliverable upon exercise of the Option.
3
b. The Company covenants that all Shares will, upon issuance in
accordance with the terms of this Agreement, be duly authorized, fully paid and
non-assessable.
8. Lock-Up Agreement.
a. Agreement. During the term of this Option Agreement, Warner, if
requested by the Company and the lead underwriter of any public offering of the
Common Stock or other securities of the Company (the "Lead Underwriter"),
hereby irrevocably agrees not to sell, contract to sell, grant any option to
purchase, transfer the economic risk of ownership in, make any short sale of,
pledge or otherwise transfer or dispose of any interest in any Common Stock or
any securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock (except Common Stock included in
such public offering or acquired on the public market after such offering)
during the 180-day period following the effective date of a registration
statement of the Company filed under the Securities Act of 1933, as amended, or
such shorter period of time as the Lead Underwriter shall specify. Warner
further agrees to sign such documents as may be requested by the Lead
Underwriter to effect the foregoing and agrees that the Company may impose
stop-transfer instructions with respect to such Common Stock or such other
securities subject until the end of such period. The Company and Warner
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180-day period
thereafter, is an intended beneficiary of this Section 8.
9. Registration Rights.
a. Incidental Rights. If the Company at any time proposes to file
with the Securities and Exchange Commission (the "Commission") on its behalf
and/or on behalf of any of its security holders (the "demanding security
holders") a Registration Statement under the Securities Act of 1933, as amended
(the "Securities Act") on any form (other than a Registration Statement on Form
S-4 or S-8 or any successor form for securities to be offered in a transaction
of the type referred to in Rule 145 under the Securities Act or to employees of
the Company pursuant to any employee benefit plan , respectively) for the
general registration of securities to be sold for cash with respect to its
Common Stock or any other class of equity securities (as defined in Section
3(a)(11) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of the Company, it will give written notice to Warner at least sixty
(60) days before the initial filing with the Commission of such Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by the Company and the intended price
range if known. The notice shall offer to include in such filing the aggregate
number of Shares as Warner may request.
Warner shall advise the Company in writing within thirty (30) days
after the date of receipt of such offer from the Company, setting forth the
amount of such Shares for which registration is requested. The Company shall
thereupon include in such filing the number of Shares for which registration is
so requested, subject to the next sentence, and shall use its best efforts to
effect registration under the Securities Act of such Shares. If the managing
underwriter of a proposed public offering shall advise the Company in writing
that,
4
in its opinion, the distribution of the Shares requested to be included in the
registration concurrently with the securities being registered by the Company
or such demanding security holder would materially and adversely affect the
distribution of such securities by the Company or such demanding security
holder, then Warner shall reduce the amount of securities he intended to
distribute through such offering on a pro rata basis with all other
shareholders requesting registration of a specified number of their shares
(other than any demanding security holder who initially requested such
registration) based on the number of shares Warner requested to be registered
divided by the total number of shares requested to be registered which are
subject to decrease pursuant to this sentence, multiplied by the total number
of such shares as the managing underwriter approves to be registered. Except as
otherwise provided in Section 9(c), all expenses of such registration shall be
borne by the Company.
b. Registration Procedures. If the Company is required by the
provisions of this Section 9 to use its best efforts to effect the registration
of any of its securities under the Securities Act, the Company will, as
expeditiously as possible:
(i) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to cause
such Registration Statement to become and remain effective for a period of time
required for the disposition of such securities by Warner, but not to exceed
one hundred eighty (180) days.
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all securities covered by such Registration
Statement until the earlier of such time as all of such securities have been
disposed of in a public offering or the expiration of one hundred eighty (180)
days.
(iii) furnish to Warner such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as Warner may reasonably request; and
(iv) use its best efforts to register or qualify the securities
covered by such Registration Statement under such other securities or blue sky
laws of such jurisdictions within the United States and Puerto Rico as Warner
shall reasonably request (provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any general
consent to service of process), and do such other reasonable acts and things as
may be required of it to enable Warner to consummate the disposition in such
jurisdiction of the securities covered by such Registration Statement.
5
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 9 in respect of the securities which
are to be registered at the request of Warner that Warner shall furnish to the
Company such information regarding the securities held by Warner and the
intended method of disposition thereof as the Company shall reasonably request
and as shall be required in connection with the action taken by the Company.
c. Expenses. All expenses incurred in complying with Section 9,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), printing expenses, fees and
disbursements of counsel for the Company, expenses of any special audits
incident to or required by any such registration and expenses of complying with
the securities or blue sky laws of any jurisdiction pursuant to this Section 9,
shall be paid by the Company, except that (i) the Company shall not be liable
for any fees, discounts or commissions to any underwriter in respect of the
securities sold by Warner; and (ii) the Company shall not be liable for any fees
or expenses of counsel for Warner in connection with any registration.
d. Indemnification and Contribution.
(i) In the event of any registration of any of the Shares under
the Securities Act pursuant to this Section 9, the Company shall indemnify and
hold harmless Warner, against any losses, claims, damages or liabilities, joint
or several, to which Warner may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (1)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any Registration Statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (2)
any alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse Warner for any legal or any other expenses reasonably incurred by
Warner in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or
alleged omission made in such Registration Statement, preliminary prospectus,
prospectus or amendment or supplement; in reliance upon and in conformity with
written information regarding Warner or his stock furnished to the Company by
Warner specifically for use therein or so furnished for such purposes by any
underwriter. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of Warner, and shall survive the
transfer of such securities by Warner.
(ii) Warner by acceptance hereof, agrees to indemnify and hold
harmless the Company, its directors and officers and each other person, if any,
who controls the Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director or officer or any such person may become subject under the
Securities Act or any other statute or at common law,
6
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon information regarding Warner or his
stock in writing provided to the Company by Warner specifically for use in the
following documents and contained, on the effective date thereof, in any
Registration Statement under which securities were registered under the
Securities Act at the request of Warner, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto.
(iii) If the indemnification provided for in this Section 9
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, labilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
included any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.
(iv) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
10. Representations and Warranties of Warner. In order to induce the
Company to accept this Option Agreement, Warner hereby represents and warrants
to the Company as follows:
a. Warner has received no solicitation or general advertisement
concerning the Company, but rather has become knowledgeable regarding the
business of the Company through personal interaction with the Company.
b. Warner confirms that no representations or warranties have been
made to Warner regarding the Company and that Warner has not relied upon any
representation or warranty in making or confirming this Option Agreement.
7
c. Warner has the ability to bear the economic investment, and can
afford a complete loss of his investment, with respect to the Option and to
the Shares.
d. Warner, either by himself or together with his purchase
representative, has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of his
investment in the Option and in the Shares.
e. Warner is accepting the Option, and will be purchasing the
Shares, for investment purposes, for Warner's own account and not with a view
to, or for sale in connection with, the distribution thereof.
f. Warner is familiar with the nature of, and the risks attending,
investments in securities such as the Option and the Shares, and he has
determined that the acceptance of the Option and the purchase of the Shares is
and will be consistent with his investment objectives.
g. Warner has been advised and understands that an investment in
the Option and in the Shares is speculative and involves a high degree of risk.
h. Warner has no reason to anticipate any change in his personal
circumstances, financial or otherwise, which may cause or require sale or
distribution by him of all or any part of the Option or the Shares.
i. Warner confirms that he has been given an opportunity to make
any inquiries of the Company and its representatives that he desires to make.
j. Warner is at least twenty-one (21) years of age.
k. Warner is aware of and understands the following:
(i) The business of the Company and the risks inherent in that
business;
(ii) That no federal or state agency has made a finding or
determination as to the advisability or fairness of an investment in the Option
or in the Shards or any recommendation or endorsement of the Option or of the
Shares;
(iii) That the Option and the Shares have not been registered
for sale under the Securities Act of 1933, as amended, or under any state "Blue
Sky Law"; and
(iv) That there are substantial restrictions on the
transferability of the Option and of the Shares; there is no public market, and
there will not necessarily be any public market, for the Option or the Shares
in the United States; Warner will not be able to avail himself of the
provisions of Rule 144 adopted by the Securities and Exchange Commission under
the Securities Act of 1933, as amended, unless all of the conditions of Rule
144 are met, and accordingly, Warner may have to hold the Option and the Shares
nand bear the economic risk of this investment for an indefinite period.
(l). If in the future Warner desires to offer or dispose of the
Option or any of the Shares or any interest therein, he will do so only in
compliance with applicable securities laws and this Option Agreement.
m. Warner understands and agrees that the Company has no
obligation to complete any public or private offering and sale of its Common
Stock to other investors, and
8
that the Company shall have no liability to Warner if it cannot complete any
such offering and sale upon terms which, in the Company's sole discretion, are
favorable to the Company.
n. Warner acknowledges that there may be restrictions
under the securities laws of the jurisdiction(s) in which he resides on the
sale of the Shares he obtains on exercise of the Option, and that he should
seek legal assistance before proceeding with the purchase or sale of said
Shares.
o. Warner agrees that the representations and warranties
of Warner set forth in this Section 10 shall survive the exercise of the Option
and the termination or expiration of this Option Agreement for a period of six
months.
11. Governing Law.
This Option Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware without regard to the principles of conflicts of
laws or choice of law.
12. Benefit.
This Option Agreement shall be binding upon the Company, Warner, their heirs,
executors, administrators, legal representatives, successors, and permitted
assigns, and Warner in furtherance thereof may execute a will directing
Warner's executor to perform this Option Agreement and to execute all documents
necessary to effectuate the purposes of the Option Agreement, but the failure
to execute such a will shall not affect the rights of the Company or the
obligations of Warner's estate as provided in this Option Agreement. Nothing in
this Option Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto, any rights or remedies under or by
reason of this Option Agreement.
13. Specific Performance.
a. The parties to this Option Agreement hereby agree that
an award of damages alone is inadequate to remedy a breach of terms of this
Option Agreement and that specific performance, injunctive relief or other
equitable remedy is the only way by which the intent of this Option Agreement
may be adequately realized upon breach by one or more of the parties. Such
remedy shall, however, be cumulative and not exclusive, and shall be in addition
to any other remedy which the parties may have.
b. In furtherance of and not in limitation of the
foregoing, should any dispute arise concerning a sale, purchase, encumbrance,
pledge, transfer, hypothecation, assignment or other disposition of the Option
or any of the Shares which is alleged to contravene the provisions of this
Option Agreement, an injunction may be issued restraining any such transaction
pending the determination of such controversy.
14. Waiver.
Failure to insist upon strict compliance with any of the terms, covenants or
conditions of this Option Agreement shall not be deemed a waiver of such terms,
covenants or conditions, nor shall any waiver or relinquishment of any right or
power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
9
15. Notice.
a. All notices required to be given under the terms of
this Agreement or which any of the Parties may desire to give hereunder shall
be in writing and delivered personally or sent by express delivery, by
facsimile, or by registered or certified mail with proof of receipt, postage
and expenses prepaid and with return receipt requested addressed as follows:
If to the Company:
@ Entertainment, Inc.
c/o Chase Enterprises
One Commercial Plaza
Hartford, Connecticut 06103
U.S.A.
Facsimile: (860) 293-4297
Attention: Cheryl A. Chase
With a copy to:
Marc R. Paul
Baker & McKenzie
815 Connecticut Avenue
Washington, D.C. 20006
U.S.A.
Facsimile: (202) 452-7074
If to Warner:
David Warner:
[
U.S.A.
Facsimile: ()]
b. Notice given in accordance with this Section 15 shall
be deemed to have been given when delivered personally, or when received if
sent via express delivery, facsimile, or registered or certified mail, postage
prepaid and return receipt requested.
c. Any party may change its address for notices by
communicating its new address in writing to the other party.
16. Entire Agreement. This Option Agreement is subject to that
certain Employment Agreement between Warner and Poland Communications, Inc.,
which was assigned to the Company as of June 23, 1997, and in the event of a
conflict between them, the provisions of the Employment Agreement shall
prevail. Except as provided in the foregoing sentence, this Option Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and may be amended only by writing executed by all of the
parties.
10
17. Severability.
The invalidity or unenforceability of any provisions of this Option Agreement
shall in no way affect the validity or enforceability of any other provision
hereof.
18. Headings.
The headings to the sections of this Option Agreement are used for reference
only and are not to be construed as limiting or extending the provisions
hereof.
19. Counterparts.
This Option Agreement may be executed in any number of counterparts, each of
which shall be considered an original but all of which shall constitute the
Option Agreement by and among the parties.
IN WITNESS THEREOF, the undersigned have executed this Option Agreement
effective as of the date first above written.
@ Entertainment, Inc., a
Delaware corporation
By: _______________________________
Robert E. Fowler, III
Its: Chief Executive Officer
___________________________________
David Warner
11
Exhibit 10.12
STOCK OPTION AGREEMENT BETWEEN
PRZEMYSLAW A. SZMYT
AND @ ENTERTAINMENT, INC.
THIS STOCK OPTION AGREEMENT ("Option Agreement") is made
effective as of June 23, 1997 (the "Effective Date"), by and between Przemyslaw
A. Szmyt ("Szmyt") and @ Entertainment, Inc., a Delaware corporation (the
"Company").
1. GRANT OF OPTION AND OPTION PERIOD.
a. The Company hereby grants Szmyt an option (the
"Option") to purchase one hundred thirty one thousand (131,000) shares (the
"Shares") of the Company's common stock (the "Common Stock"), with a par value
of $0.01 per share, pursuant to the terms and conditions set forth in this
Option Agreement. The exercise price for the Option (the "Exercise Price")
shall be fifteen dollars and twenty-four cents (U.S. $15.24) per share.
b. The options to purchase twenty-six thousand two hundred
(26,200) of these Shares will vest each year on the anniversary date of the
Effective Date beginning with the first anniversary of the Effective Date,
provided, however, that no portion of such option shall vest after the date
(the "Cut-Off Date") that is the earlier of (i) the date that the Employment
Agreement (as described in Section 16 of this Agreement) is terminated, and
(ii) the date on which the Company sends Szmyt a notice referred to in Section
II of the Employment Agreement.
c. If Szmyt's employment with the Company is terminated
for any reason, Szmyt shall have only sixty (60) days after the Cut-Off Date to
exercise that portion of the Option that has vested as of the Cut-Off Date, and
Szmyt shall have no right to exercise any portion of the Option that has not
then vested.
d. Notwithstanding any other provision of this Option
Agreement, the Option shall expire and be of no further force or effect with
respect to any Shares on the earlier to occur of (i) the tenth anniversary of
the Effective Date or (ii) sixty days after the date that Szmyt ceases to be an
employee of the company for any reason whatsoever (including but not limited to
Szmyt's death, disability, voluntary termination or involuntary termination).
e. Each exercise of the Option shall reduce, by an equal
number the total number of shares of Company Common stock that may thereafter
be purchased by Szmyt under the Option.
2. MANNER OF EXERCISE.
Subject to the conditions and restrictions contained in Section 3 below, the
Option shall be exercised by delivering written notice of exercise to the
Secretary of the Company. Such notice shall be irrevocable and must be
accompanied by payment in cash, banker's draft or such other form of
consideration as the Company may approve, and a signed Subscription Agreement,
reasonably acceptable to both parties.
3. NON-TRANSFERABILITY.
1
Neither this Option nor any interest therein may be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner (other than by gifts in
trust to family members, will or by the laws of descent and distribution during
the option period described in Section I). This Option is not assignable by
operation of law or subject to execution, attachment or similar process. During
Szmyt's lifetime, the Option can only be exercised by Szmyt. Any attempted
sale, pledge, assignment, hypothecation or other transfer of the Option or any
interest therein contrary to the provisions hereof, or the levy of any
execution, attachment or similar process upon the Option or any interest
therein shall be null and void and without force or effect. No transfer of the
Option by gift in trust to a family member, by will or by the laws of descent
and distribution shall be effective to bind the Company unless the Company
shall have been furnished written notice thereof executed by the trustee(s) of
a trust established for a family member or the personal representative of the
estate of Szmyt which shall be accompanied by an authenticated copy of the
documents appointing such trustee(s) or of the letters testamentary appointing
such personal representative, or such other evidence as the Company may deem
reasonably necessary to establish the validity of the transfer, and also
evidence as the Company may deem reasonably necessary to establish the
acceptance by the transferee or transferees of the terms and conditions of the
Option. The terms of the Option transferred by will or by the laws of descent
and distribution shall be binding upon the executors, administrators, heirs and
successors of Szmyt. The terms of the Option transferred in trust shall be
binding upon the trustee(s) of such trust.
4. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK.
In the event of any change in the outstanding Common Stock of the Company due
to stock dividends, recapitalizations, reorganizations, mergers,
consolidations, split-ups, rights offering, warrants, or exchange of shares,
the number and kind of the Shares and/or the purchase price per Share will be
appropriately adjusted, upwards or downwards, consistent with such change. The
reasonable determination of the Company regarding any adjustment will be final
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of the Shares.
5. RESTRICTIONS ON TRANSFER OF THE SHARES.
a. For as long as Szmyt is an employee of the Company or
any Associated Company (as that term is used in the Employment Agreement that
is described in Section 16 of this Option Agreement), Szmyt shall not transfer
any Shares to any person or entity other than the Company, unless such shares
shall have been registered pursuant to a Public Offering.
b. After Szmyt is no longer an employee of the Company or
any Associated Company and provided further that such shares shall not have
been registered pursuant to a Public Offering, Szmyt shall not sell, encumber,
pledge, transfer, hypothecate, assign or otherwise dispose of any of the
Shares until Szmyt shall have first offered to sell such Shares to the Company
(the "Offer") in accordance with the following provisions.
c. The Offer made pursuant to Subsection (b) above shall
be in writing, and shall state that Szmyt offers to sell to the Company a
specified number of the Shares owned by Szmyt. For every Offer of the shares
pursuant to Subsection (b) above, the Company shall have a period of fifteen
(15) days from the time of receiving the Offer to accept it; such acceptance
shall be in writing and shall be sent to Szmyt.
d. The purchase price of any of the Shares sold pursuant
to the provisions of Subsection (b) above shall be equal to the price offered
to Szmyt for such shares by a bona fide third party purchaser, as evidenced by a
written offer to purchase executed by such third
2
party. The purchase price shall be paid to Szmyt in cash within fifteen (15)
days of the Company's acceptance of the Offer. If any of the Shares which are
offered for purchase pursuant to the provisions of Subsection (c) above are not
accepted for purchase by the Company within the time limitations described in
Subsection (c), Szmyt may transfer such shares to such bona fide third party
purchaser in accordance with the terms of such purchaser's offer to purchase
referred to in this Subsection (d).
e. As a condition to the transfer of any of the shares issued
pursuant to this Option Agreement, the Company may require an opinion of
Counsel, reasonably satisfactory to the Company, to the effect that such
transfer will not be in violation of the Securities Act of 1933, as amended
(such Act, or any similar Federal statute then in effect, being hereinafter
referred to as the "Act"), or any other applicable securities laws, rules or
regulations, or that such transfer has been registered under Federal and all
other applicable securities laws.
f. Unless and until the Company shall have received a legal
opinion described in subparagraph (e) hereof, all certificates evidencing any
of the Shares, whether upon initial issuance or any transfer thereof, shall
bear the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. AS AMENDED, OR UNDER ANY OTHER
SECURITIES LAWS, AND THEREFORE CANNOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR ASSIGNED UNLESS THEY ARE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND UNDER ALL OTHER APPLICABLE SECURITIES LAWS,
OR UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH THE
PROVISIONS OF THAT CERTAIN STOCK OPTION AGREEMENT, EFFECTIVE AS OF JUNE
23, 1997, BETWEEN PRZEMYSLAW A. SZMYT AND @ ENTERTAINMENT, INC., A COPY
OF WHICH IS ON FILE IN THE OFFICE OF THE SECRETARY OF @ ENTERTAINMENT,
INC.
6. No Stock Rights.
Szmyt shall not be entitled to vote, be deemed the holder of any Shares, have
the right to receive dividends with respect to any Shares, or otherwise have
any of the rights of a stockholder of the Company with respect to any Shares,
unless and until Szmyt has exercised the Option with respect to such Shares in
accordance with the terms and conditions of this Option Agreement.
7. Reservation and Issuance of Shares.
a. The Company will at all times have authorized, and reserve and
keep available, free from preemptive rights, for the purpose of enabling it to
satisfy any obligation to issue the number of shares of Common Stock
deliverable upon exercise of the Option.
b. The Company covenant that all Shares will, upon issuance in
accordance with the terms of this Agreement, be duly authorized, fully paid and
non-assessable.
3
8. Lock-Up Agreement.
a. Agreement. During the term of this Option Agreement, Szmyt, if
requested by the Company and the lead underwriter of any public offering of the
Common Stock or other securities of the Company (the "Lead Underwriter"),
hereby irrevocably agrees not to sell, contract to sell, grant any option to
purchase, transfer the economic risk of ownership in, make any short sale of,
pledge or otherwise transfer or dispose of any interest in any Common Stock or
any securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock (except Common Stock included in
such public offering or acquired on the public market after such offering)
during the 180-day period following the effective date of a registration
statement of the Company filed under the Securities Act of 1933, as amended, or
such shorter period of time as the Lead Underwriter shall specify. Szmyt
further agrees to sign such documents as may be requested by the Lead
Underwriter to affect the foregoing and agrees that the Company may impose
stop-transfer instructions with respect to such Common Stock or such other
securities subject until the end of such period. The Company and Szmyt
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180-day period
thereafter, is an intended beneficiary of this Section 8.
9. Registration Rights.
a. Incidental Rights. If the Company at any time proposes to file
with the Securities and Exchange Commission (the "Commission") on its behalf
and/or on behalf of any of its security holders (the "demanding security
holders") a Registration Statement under the Securities Act of 1933, as amended
(the "Securities Act") on any form (other than a Registration Statement on Form
S-4 or S-8 or any successor form for securities to be offered in a transaction
of the type referred to in Rule 145 under the Securities Act or to employees of
the Company pursuant to any employee benefit plan, respectively) for the
general registration of securities to be sold for cash with respect to its
Common Stock or any other class of equity security (as defined in Section
3(a)(11) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of the Company, it will give written notice to Szmyt at least sixty (60)
days before the initial filing with the Commission of such Registration
Statement, which notice shall set forth the intended method of disposition of
the securities proposed to be registered by the Company and the intended price
range if known. The notice shall offer to include in such filing the aggregate
number of Shares as Szmyt may request.
Szmyt shall advise the Company in writing within thirty (30) days after
the date of receipt of such offer from the Company, setting forth the amount of
such Shares for which registration is requested. The Company shall thereupon
include in such filing the number of Shares for which registration is so
requested, subject to the next sentence, and shall use its best efforts to
effect registration is so requested, subject to the next sentence, and shall
use its best efforts to effect registration under the Securities Act of such
Shares. If the managing underwriter of a proposed public offering shall advise
the Company in writing that, in its opinion, the distribution of the Shares
requested to be included in the registration concurrently with the securities
being registered by the Company or such demanding security holder would
materially and adversely affect the distribution of such securities by the
Company or such
4
demanding security holder, then Szmyt shall reduce the amount of securities he
intended to distribute through such offering on a pro rata basis with all other
shareholders requesting registration of a specified number of their shares
(other than any demanding security holder who initially requested such
registration) based on the number of shares Szmyt requested to be registered
divided by the total number of shares requested to be registered which are
subject to decrease pursuant to this sentence, multiplied by the total number
of such shares as the managing underwriter approves to be registered. Except as
otherwise provided in Section 9(c), all expenses of such registration shall be
borne by the Company.
b. Registration Procedures. If the Company is required by the
provisions of this Section 9 to use its best efforts to effect the registration
of any of its securities under the Securities Act, the Company will, as
expeditiously as possible.
(i) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to cause
such Registration Statement to become and remain effective for a period of time
required for the disposition of such securities by Szmyt, but not to exceed one
hundred eighty (180) days.
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all securities covered by such Registration
Statement until the earlier of such time as all of such securities have been
disposed of in a public offering or the expiration of one hundred eighty (180)
days.
(iii) furnish to Szmyt such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents, as Szmyt may reasonably request; and
(iv) use its best efforts to register or qualify the securities
covered by such Registration Statement under such other securities or blue sky
laws of such jurisdictions within the United States and Puerto Rico as Szmyt
shall reasonably request (provided, however, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the laws of
any jurisdiction in which it is not then qualified or to file any general
consent to service of process), and do such other reasonable acts and things as
may be required of it to enable Szmyt to consummate the disposition in such
jurisdiction of the securities covered by such Registration Statement.
It shall be a condition precedent to the obligation of the Company to
take any action pursuant to this Section 9 in respect of the securities which
are to be registered at the request of Szmyt that Szmyt shall furnish to the
Company such information regarding the securities held by Szmyt and the
intended method of disposition thereof as the Company shall
5
reasonably request and as shall be required in connection with the action taken
by the Company.
c. Expenses. All expenses incurred in complying with Section 9,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), printing expenses, fees and
disbursements of counsel for the Company, expenses of any special audits
incident to or required by any such registration and expenses of complying with
the securities or blue sky laws of any jurisdictions pursuant to this Section
9, shall be paid by the Company, except that (i) the Company shall not be
liable for any fees, discounts or commissions to any underwriter in respect of
the securities sold by Szmyt; and (ii) the Company shall not be liable for any
fees or expenses of counsel for Szmyt in connection with any registration.
d. Indemnification and Contribution.
(i) In the event of any registration of any of the Shares under
the Securities Act pursuant to this Section 9, the Company shall indemnify and
hold harmless Szmyt, against any losses, claims, damages or liabilities, joint
or several, to which Szmyt may become subject under the Securities Act or any
other statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (1)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any Registration Statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (2)
any alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse Szmyt for any legal or any other expenses reasonably incurred by
Szmyt in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or
alleged omission made in such Registration Statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and in conformity with
written information regarding Szmyt or his stock furnished to the Company by
Szmyt specifically for use therein or so furnished for such purposes by any
underwriter. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of Szmyt, and shall survive the transfer
of such securities by Szmyt.
(ii) Szmyt by acceptance hereof, agrees to indemnify and hold
harmless the Company, its directors and officers and each other person, if any,
who controls the Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director or officer or any such person may become subject under the
Securities Act or any other statute or at common law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon information regarding Szmyt or his stock in writing provided to
the Company by Szmyt specifically for use in the following documents and
contained, on the effective date thereof, in any Registration Statement under
which securities were registered
6
under the Securities Act at the request of Szmyt, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto.
(iii) If the indemnification provided for in this
Section 9 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by
such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.
(iv) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 9(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
10. Representations and Warranties of Szmyt. In order to induce the
Company to accept this Option Agreement, Szmyt hereby represents and warrants
to the Company as follows:
a. Szmyt has received no solicitation or general
advertisement concerning the Company, but rather has become knowledgeable
regarding the business of the Company through personal interaction with the
Company.
b. Szmyt confirms that no representations or warranties
have been made to Szmyt regarding the Company and that Szmyt has not relied
upon any representation or warranty in making or confirming this Option
Agreement.
c. Szmyt has the ability to bear the economic investment,
and can afford a complete loss of his investment, with respect to the Option and
to the Shares.
d. Szmyt, either by himself or together with his purchaser
representative, has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of his
investment in the Option and in the Shares.
7
e. Szmyt is accepting the Option, and will be purchasing
the Shares, for investment purposes, for Szmyt's own account and not with a
view to, or for sale in connection with, the distribution thereof.
f. Szmyt is familiar with the nature of, and the risks
attending, investments in securities such as the Option and the Shares, and he
has determined that the acceptance of the Option and the purchase of the Shares
is and will be consistent with his investment objectives.
g. Szmyt has been advised and understands that an
investment in the Option and the Shares is speculative and involves a high
degree of risk.
h. Szmyt has no reason to anticipate any change in his
personal circumstances, financial or otherwise, which may cause or require sale
or distribution by him of all or any part of the Option or the Shares.
i. Szmyt confirms that he has been given an opportunity to
make any inquiries of the Company and its representatives that he desires to
make.
j. Szmyt is at least twenty-one (21) years of age.
k. Szmyt is aware of and understands the following:
(i) The business of the Company and the risks
inherent in that business;
(ii) That no federal or state agency has made a
finding or determination as to the advisability or fairness of an investment in
the Option or in the Shares or any recommendation or endorsement of the Option
or of the Shares;
(iii) That the Option and the Shares have not been
registered for sale under the Securities Act of 1933, as amended, or under any
state "Blue Sky Law"; and
(iv) That there are substantial restrictions on the
transferability of the Option and of the Shares; there is no public market, and
there will not necessarily be any public market, for the Option or the Shares
in the United States; Szmyt will not be able to avail himself of the provisions
of Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, unless all of the conditions of Rule 144
are met, and accordingly, Szmyt may have to hold the Option and the Shares and
bear the economic risk of this investment for an indefinite period.
l. If in the future Szmyt desires to offer or dispose of
the Option or any of the Shares or any interest therein, he will do so only in
compliance with applicable securities laws and this Option Agreement.
m. Szmyt understands and agrees that the Company has no
obligation to complete any public or private offering and sale of its Common
Stock to other investors and that the Company shall have no liability to Szmyt
if it cannot complete any such offering and sale upon terms which, in the
Company's sole discretion, are favorable to the Company.
n. Szmyt acknowledges that there may be restrictions under
the securities laws of the jurisdiction(s) in which he resides on the sale of
the Shares he obtains on exercise of the Option, and that he should seek legal
assistance before proceeding with the purchase or sale of said Shares.
8
o. Szmyt agrees that the representations and warranties of
Szmyt set forth in this Section 10 shall survive the exercise of the Option and
the termination or expiration of this Option Agreement for a period of six
months.
11. GOVERNING LAW.
This Option Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware without regard to the principles of conflicts of
laws or choice of law.
12. BENEFIT.
This Option Agreement shall be binding upon the Company, Szmyt, their heirs,
executors, administrators, legal representatives, successors, and permitted
assigns, and Szmyt in furtherance thereof may execute a will directing Szmyt's
executor to perform this Option Agreement and to execute all documents
necessary to effectuate the purposes of this Option Agreement, but the failure
to execute such a will shall not affect the rights of the Company or the
obligations of Szmyt's estate as provided in this Option Agreement. Nothing in
this Option Agreement, expressed or implied, is intended to confer upon any
person, other than the parties hereto, any rights or remedies under or by
reason of this Option Agreement.
13. SPECIFIC PERFORMANCE.
a. The parties to this Option Agreement hereby agree that
an award of damages alone is inadequate to remedy a breach of terms of this
Option Agreement and that specific performance, injunctive relief or other
equitable remedy is the only way by which the intent of this Option Agreement
may be adequately realized upon breach by one or more of the parties. Such
remedy shall, however, be cumulative and not exclusive, and shall be in addition
to any other remedy which the parties may have.
b. In furtherance of and not in limitation of the
foregoing, should any dispute arise concerning a sale, purchase, encumbrance,
pledge, transfer, hypothecation, assignment or other disposition of the Option
or any of the Shares which is alleged to contravene the provisions of this
Option Agreement, an injunction may be issued restraining any such transaction
pending the determination of such controversy.
14. WAIVER.
Failure to insist upon strict compliance with any of the terms, covenants, or
conditions of this Option Agreement shall not be deemed a waiver of such terms,
covenants or conditions, nor shall any waiver or relinquishment of any right or
power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
15. NOTICE.
a. All notices required to be given under the terms of
this Agreement or which any of the Parties may desire to give hereunder shall
be in writing and delivered personally or sent by express delivery, by
facsimile, or by registered or certified mail with proof of receipt, postage
and expenses prepaid and with return receipt requested addressed as follows:
If to the Company:
9
@ Entertainment, Inc.
c/o Chase Enterprises
One Commercial Plaza
Hartford, Connecticut 06103
U.S.A.
Facsimile: (860) 293-4297
Attention: Cheryl A. Chase
With a copy to:
Marc R. Paul
Baker & McKenzie
815 Connecticut Avenue
Washington, D.C. 20006
U.S.A.
Facsimile: (202) 452-7074
If to Szmyt:
Przemyslaw A. Szmyt
[
U.S.A.
Facsimile: 0]
b. Notice given in accordance with this Section 15 shall be deemed
to have been given when delivered personally, or when received if sent via
express delivery, facsimile, or registered or certified mail, postage prepaid
and return receipt requested.
c. Any party may change its address for notices by communicating
its new address in writing to the other party.
16. ENTIRE AGREEMENT. This Option Agreement is subject to that certain
Employment Agreement between Szymt and Poland Communications, Inc., which was
assigned to the Company as of June 23, 1997, and in the event of a conflict
between them, the provisions of the Employment Agreement shall prevail. Except
as provided in the foregoing sentence, this Option Agreement constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and may be amended only by writing executed by all of the parties.
17. SEVERABILITY.
The invalidity or unenforceability of any provisions of this Option Agreement
shall in no way affect the validity or enforceability of any other provision
hereof.
18. HEADINGS.
The headings to the sections of this Option Agreement are used for reference
only and are not to be construed as limiting or extending the provisions hereof.
10
19. COUNTERPARTS.
This Option Agreement may be executed in any number of counterparts, each of
which shall be considered an original but all of which shall constitute the
Option Agreement by and among the parties.
IN WITNESS THEREOF, the undersigned have executed this Option Agreement
effective as of the date first above written.
@ Entertainment, Inc., a
Delaware corporation
By:______________________________
Robert E. Fowler, III
Its: Chief Executive Officer
_________________________________
Przemyslaw A. Szmyt
11
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 6/24/97 | | | | | | | None on these Dates |
| | 6/23/97 | | 19 | | 39 |
| List all Filings |
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