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 Financial Data Schedule 1 11K
EX-10.16 Form of Stock Option Plan
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Exhibit 10.16
@ ENTERTAINMENT, INC.
1997 STOCK OPTION PLAN
1. PURPOSE.
The purpose of the @ ENTERTAINMENT, INC. 1997 Stock Option
Plan (the "Plan") is to advance the interests of the Corporation and its
shareholders by providing a means by which the Corporation and its Subsidiaries
shall be able to attract and retain qualified employees and consultants.
2. DEFINITIONS.
(a) "Affiliate" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations that includes the Corporation
if each of such corporations, other than the last corporation in the chain,
owns at least 50% of the total voting power of one of the other corporations.
(b) "Board" shall mean the Board of Directors of the
Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Committee" shall mean the committee appointed by the
Board to administer the Plan, or if no such committee is appointed, the Board.
(e) "Common Stock" shall mean the voting common stock of
the Corporation.
(f) "Consultant" shall mean any person who, or any employee
of any firm which, is engaged by the Company or any Affiliate to render
consulting services.
(g) "Corporation" shall mean @ ENTERTAINMENT, INC., a
Delaware corporation.
(h) "Effective Date" shall mean ________________, 1997.
(i) "Employee" shall mean any individual who is treated as
an employee on the applicable payroll/employment records of the Corporation or
Affiliate at the relevant time. For purposes of the Plan and only for purposes
of the Plan, and in regard to Nonstatutory Stock Options but not for Incentive
Stock Options, a Consultant of the Corporation or any Affiliate shall be deemed
to be an Employee, and service as a Consultant with the Corporation or any
Affiliate shall be deemed to be employment, but no Incentive Stock Option shall
be granted to a Consultant who is not an employee of the Corporation or any
Affiliate within the meaning of Section 3401 of the Code and the regulations
thereunder. In the case of a Consultant, the provisions governing
when a termination of employment has occurred for purposes of the Plan shall be
set forth in the written stock option agreement between the Optionee and the
corporation, or, if not so set forth, the Committee shall have the discretion to
determine when a termination of "employment" has occurred for purposes of the
Plan.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(k) "Exercise Price" shall mean the price per Share at which an
Option may be exercised, as determined by the Committee and as specified in
the Optionee's stock option agreement.
(l) "Fair Market Value" shall mean the value of one Share of Common
Stock, determined as follows: (i) if the Shares are traded on an exchange or on
the Nasdaq National Market System, the reported "closing price" on the date of
valuation or if no trading occurred on such date, the next preceding day on
which trading occurred; (ii) if the Shares are traded over-the-counter on the
NASDAQ System (other than on the NASDAQ National Market System), the mean
between the bid and the ask prices on said System at the close of business on
the date of valuation; or if no trading occurred on such date, the next
preceding day on which trading occurred; and (iii) if neither (i) nor (ii)
applies, the fair market value as determined by the Committee in good faith.
Such determination shall be conclusive and binding on all persons.
(m) "Incentive Stock Option" shall mean an Option of the type
described in Section 422(b) of the Code.
(n) "Nonstatutory Stock Option" shall mean an Option of the type
not described in Section 422(b) or 423(b) of the Code.
(o) "Option" shall mean an option to purchase Common Stock granted
pursuant to the Plan.
(p) "Optionee" shall mean any person who holds an Option pursuant
to the Plan.
(q) "Plan" shall mean this stock option plan as it may be amended
from time to time.
(r) "Purchase Price" shall mean at any particular time the Exercise
Price times the number of Shares for which an Option is being exercised.
(s) "Share" shall mean one share of authorized Common Stock.
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3. ADMINISTRATION.
(a) The Committee.
The Plan shall be administered by a Committee appointed by the
Board. To the extent the Board deems it desirable for the Option to constitute
performance based compensation pursuant to Code Section_162(m), the Committee
shall consist on not less than two numbers, each of whom is an "outside
director" as defined in Code Section_162(m). To the extent the Board deems it
desirable for the Committee to satisfy the requirements for disinterested
administration under Rule_16b-3 under the Exchange Act, the Committee shall
consist of not less than two members, each of whom is a "nonemployee director"
as defined in Rule_16b-3.
(b) Powers of the Committee.
Subject to the provisions of the Plan, the Committee shall have
the authority, in its discretion and on behalf of the Corporation:
(i) to grant Options;
(ii) to determine the Exercise Price per Share of
Options to be granted;
(iii) to determine Employee status and the Employees to
whom, and the time or times at which, Options shall be granted and the number
of Shares for which an Option will be exercisable;
(iv) to interpret the Plan;
(v) to prescribe, amend, and rescind rules and
regulations relating to the Plan;
(vi) to determine the terms and provisions of each
Option granted and, with the consent of the holder thereof, modify or amend
each Option;
(vii) to accelerate or defer, with the consent of the
Optionee, the exercise date of any Option;
(viii) to authorize any person to execute on behalf of
the Corporation any instrument required to effectuate the grant of an Option
previously granted by the Committee;
(ix) with the consent of the Optionee, to reprice,
cancel and regrant, or otherwise adjust the Exercise Price of an Option
previously granted by the Committee; and
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(x) to make all other determinations deemed necessary
or advisable for the administration of the Plan.
(c) Committee's Interpretation of the Plan.
The interpretation and construction by the Committee of
any provision of the Plan or of any Option granted hereunder, as well as any
determination made by the Committee pursuant to Section_3(b), shall be final
and binding on all parties claiming an interest in an Option granted under the
Plan. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.
(d) Delegation by Committee
Subject to the provisions of the Plan, the Committee
shall have the authority, in its discretion and on behalf of the Corporation,
to delegate the following powers to any individual or individuals with respect
to the granting of Options to those Employees who are not subject to the
short-swing profit rules of Section 16 of the Exchange Act;
(i) The power to grant Options;
(ii) The power to determine Employee status and the
Employees to whom and the time or times at which Options shall be granted and
the number of Shares for which an Option will be exercisable; and
(iii) The power to determine the Exercise Price per
Share of Options to be granted.
In delegating its powers hereunder, the Committee may place any restrictions it
deems appropriate on the delegatee(s). Any delegation of power under this
Section shall be valid until it expires by its own terms, until revoked by the
Committee, or until revoked by the Board, whichever first occurs.
4. PARTICIPATION.
(a) Eligibility.
The Optionees shall be such persons as the Committee
may select from among the Employees, provided that Consultants are not eligible
to receive Incentive Stock Options.
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(b) Ten Percent Shareholders.
Any Employee who owns Stock possessing more than 10% of
the total combined voting power of all classes of outstanding stock of the
Corporation or any Affiliate shall not be eligible to receive an Incentive Stock
Option unless:
(i) the Exercise Price of the Shares subject to such
Option when granted is at least 110% of the Fair Market Value of such Shares,
and
(ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant.
(c) Stock Ownership.
For purposes of Paragraph 4(b), in determining stock
ownership, an Employee shall be considered as owning the stock owned, directly
or indirectly, by or for his or her brothers and sisters, spouse, ancestors, and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust shall be considered as being owned
proportionately by or for its shareholders, partners, or beneficiaries,
respectively. Stock with respect to which such Employee or any other person
holds an option shall be disregarded.
(d) Outstanding Stock.
For purposes of Section 4(b), the term "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant of the Option to the Optionee but shall not include any share for
which an Option is exercisable by any person.
5. STOCK
(a) Shares Subject to This Plan.
The aggregate number of Shares which may be issued upon
exercise of Options under the Plan shall not exceed [____] shares, subject to
adjustment pursuant to Section 9 hereof.
(b) Options Not to Exceed Shares Available.
The number of Shares for which an Option is exercisable
at any time shall not exceed the number of Shares remaining available for
issuance under the Plan. If any Option expires or is terminated, the number of
Shares for which such Option was exercisable may be made exercisable pursuant
to other Options under the Plan. The limitations established by this
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Section 4(b) shall be subject to adjustment in the manner provided in Section 9
hereof upon the occurrence of an event specified therein.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreements.
Options shall be evidenced by written stock option
agreements between the Optionee and the Corporation in such form as the
Committee shall from time to time determine. No Option or purported Option
shall be a valid and binding obligation of the Corporation unless so evidenced
in writing.
(b) Number of Shares.
Each stock option agreement shall state the number of
Shares for which the Option is exercisable and shall provide for the adjustment
thereof in accordance with Section 9 hereof. The maximum number of shares with
respect to which options may be granted to any one Optionee, in the aggregate
in any calendar year, shall not exceed [________] Shares.
(c) Vesting.
An Optionee may not exercise his or her Option for any
shares until the Option, in regard to such Shares, has vested. Each stock
option agreement shall include a vesting schedule which shall show when the
Option becomes exercisable. The besting schedule shall not impose upon the
Corporation or any Affiliate any obligation to retain the Optionee in its
employ or under contract for any period or otherwise change the
employment-at-will status of an Optionee who is an employee of the Corporation
or any Affiliate.
(d) Lapse of Options.
Each stock option agreement shall state the time or
times when the Option covered thereby lapses and becomes unexercisable in part
or in full. An Option shall lapse on the earliest of the following events
(unless otherwise determined by the Committee and reflected in an option
agreement):
(i) The tenth anniversary of the date of granting
the Option;
(ii) The first anniversary of the Optionee's death;
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(iii) The first anniversary of the date the Optionee ceases
to be an Employee due to total and permanent disability, within the meaning of
Section 22(e)(3) of the Code;
(iv) On the date provided in Section 6(h)(i), unless with
respect to a Nonstatutory Stock Option, the Committee otherwise extends such
period before the applicable expiration date;
(v) On the date provided in Section 9 for a transaction
described in such Section;
(vi) The date the Optionee files or has filed against him or
her a petition in bankruptcy; or
(vii) The expiration date specified in an Optionee's stock
option agreement.
(e) Exercise Price.
Each stock option agreement shall state the Exercise Price for
the Shares for which the Option is exercisable. Subject to Section 4(b), the
Exercise Price of an Incentive Stock Option and a Nonstatutory Stock Option
shall, when granted, be not less than 100% and 85% of the Fair Market Value of
the Shares for which the Option is exercisable, respectively, and not less than
the par value of the Shares.
(f) Medium and Time of Payment.
The Purchase Price shall be payable in full in cash upon the
exercise of an Option but the Committee, in its sole discretion, may allow the
Optionee to pay the Purchase Price:
(i) by surrendering Shares in good form for transfer, owned
by the Optionee and having a Fair Market Value on the date of exercise equal to
the Purchase Price;
(ii) by delivery of a full recourse promissory note ("Note")
made by the Optionee in the amount of the Purchase Price, bearing interest,
compounded semiannually, at a rate not less than the rate determined under
Section 7872 of the Code to insure that no "foregone interest" as defined in
such section, will accrue, together with the delivery of a duly executed
standard form security agreement securing the Note by a pledge of the Shares
purchased; or
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(iii) in any combination of such consideration or such other
consideration and method of payment for the issuance of Shares to the extent
permitted under applicable law Code as long as the sum of the cash so paid, the
Fair Market Value of the Shares so surrendered, and the amount of any Note
equals the Purchase Price.
The Committee or a stock option agreement may prescribe
requirements with respect to the exercise of Options, including the submission
by the Optionee of such forms and documents as the Committee may require and,
the delivery by the Optionee of cash sufficient to satisfy applicable
withholding requirements. The Committee may vary the exercise requirements and
procedures from time to time to facilitate, for example, the broker-assisted
exercise of Options.
(g) Nontransferability of Options.
During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee or the Optionee's conservator or legal
representative and shall not be assignable or transferable except as defined by
the Code. In the event of the Optionee's death, the Option shall not be
transferable by the Optionee other than by will or the laws of descent and
distribution.
(h) Termination of Employment Other than by Death or Disability.
(i) If an Optionee ceases to be an Employee for any reason
other than his or her death or disability, the Optionee shall have the right,
subject to the provisions of this Section 6, to exercise any Option held by the
Optionee at any time within ninety (90) days after his or her termination of
employment, but not beyond the otherwise applicable term of the Option and only
to the extent that on such date of termination of employment the Optionee's
right to exercise such Option had vested.
(ii) For purposes of this Section 6(h), the employment
relationship shall be treated as continuing intact while the Optionee is an
active employee of the Corporation or any Affiliate, or is on military leave,
sick leave, or other bona fide leave of absence to be determined in the sole
discretion of the Committee. The preceding sentence notwithstanding, in the
case of an Incentive Stock Option, employment shall be deemed to terminate on
the date the Optionee's reemployment rights are guaranteed by applicable law or
contract.
(i) Death of Optionee.
If an Optionee dies while an Employee, or after ceasing to be an
Employee but during the period while he or she could have exercised an Option
under Section 6(h), any
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Option granted to the Optionee may be exercised, to the extent it had vested at
the time of death and subject to the Plan, at any time within 12 months after
the Optionee's death, by the executors or administrators of his or her estate
or by any person or persons who acquire the Option by will or the laws of
descent and distribution, but not beyond the otherwise applicable term of the
Option.
(j) Disability of Optionee.
If an Optionee ceases to be an Employee due to becoming totally
and permanently disabled within the meaning of Section 22(e)(3) of the Code, as
determined by the Committee or its delegate in its sole discretion, any Option
granted to the Optionee may be exercised to the extent it had vested at the
time of cessation and, subject to the Plan, at any time within 12 months after
the Optionee's termination of employment, but not beyond the otherwise
applicable term of the Option.
(k) Rights as a Shareholder.
An Optionee, or a transferee of an Optionee, shall have no
rights as a shareholder of the Corporation with respect to any Shares for which
his or her Option is exercisable until the date of the issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends,
ordinary or extraordinary or whether in currency, securities, or other
property, distributions, or other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in Section 9
hereof.
(l) Modification, Extension, and Renewal of Options.
Within the limitations of the Plan, the Committee may modify,
extend or renew outstanding Options or accept the cancellation of outstanding
Options for the granting of new Options in substitution thereof.
Notwithstanding the preceding sentence, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option previously granted.
(m) Options for Nonresident Aliens and Certain Employees Employed
Outside the United States.
The Committee shall be free to adopt sub-plans or to modify the
terms and conditions of Options relating to nonresident alien Employers or
Employees employed outside the United States or by Affiliates not incorporated
in the United States. Such sub-plans or modification shall contain such terms
and conditions as the Committee in its discretion deems necessary or desirable
to facilitate compliance with local laws or to achieve favorable tax or legal
results.
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(n) Other Provisions.
The stock option agreements authorized under the Plan may
contain such other provisions which are not inconsistent with the terms of the
Plan, including, without limitation, restrictions upon the exercise of the
Option, as the Committee shall deem advisable.
7. $100,000 PER YEAR LIMITATION ON VESTING OF ISOs.
To the extent that the Fair Market Value of Shares (determined for each
Share as of the date of grant of the Option covering such Share) subject to
Options granted under this Plan (or any other plan of the Corporation or any
Affiliate) which are designated as Incentive Stock Options and which become
exercisable by an Optionee for the first time during a single calendar year
exceeds $100,000, the Option(s) (or portion thereof) covering such Shares shall
be recharacterized (to the extent of such excess over $100,000) as a
Nonstatutory Stock Option. In determining which Option(s) shall be treated as
Nonstatutory Stock Options under the preceding sentence, the Options shall be
taken into account in the order granted, with the result that a later granted
Option shall be recharacterized as a Nonstatutory Stock Option prior to such
recharacterization of a previously granted Option.
8. TERM OF PLAN.
Options may be granted pursuant to the Plan until ten years following
the Effective Date, and all Options which are outstanding on such date shall
remain in effect until they are exercised or expire by their terms. The Plan
shall expire for all purposes on the date 20 years following the Effective
Date.
9. RECAPITALIZATION, TAKEOVERS AND LIQUIDATIONS.
(a) Reorganizations.
The number of Shares covered by the Plan, as provided in
Section 5 hereof, and the number of Shares for which each Option is exercisable
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from the payment of a Common Stock dividend, a stock
split, a reverse stock split or any other event which results in an increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Corporation, and the Exercise Price shall be
proportionately increased in the event the number of Shares subject to such
Option are decreased and shall be proportionately decreased in the event the
number of Shares subject to such Option are increased. For the purposes of this
paragraph, conversion of any convertible securities of the Corporation shall
not be deemed to have been "effected without receipt of consideration."
Adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided
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herein, no issuance by the Corporation of shares of stock of any class, or
securities convertible into 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 shares of Common Stock subject to an Option.
(b) Liquidation.
In the event of the dissolution or liquidation of the
Corporation, each Option shall terminate immediately prior to the consummation
of such action. The Committee shall notify the Optionee not less than fifteen
(15) days prior to the proposed consummation of a pending dissolution or
liquidation, and the Option shall be exercisable as to all Shares which are
vested prior to expiration until immediately prior to the consummation of such
action.
(c) Merger.
In the event of (i) a proposed merger of the
Corporation with or into another corporation, as a result of which the
Corporation is not the surviving corporation and (ii) the Option is not assumed
or an equivalent option substituted by the successor corporation or a parent or
subsidiary of the successor corporation, then in such case each Option shall
terminate immediately prior to the consummation of such transaction. The
Committee shall notify the Optionee not less than fifteen (15) days prior to
the proposed consummation of such transaction, and the Option shall be
exercisable as to all Shares which are vested prior to expiration and until
immediately prior to the consummation of such transaction.
(d) Determination by Committee.
All adjustments described in this Section 9 shall be
made by the Committee, whose determination shall be conclusive and binding on
all persons.
(e) Limitation on Rights of Optionee.
Except as expressly provided in this Section 9, no
Optionee shall have any rights by reason of any payment of any stock dividend,
stock split or reverse stock split or any other increase or decrease in the
number of shares of stock of any class, or by reason of any reorganization,
consolidation, dissolution, liquidation, merger, exchange, split-up or reverse
split-up, or spin-off of assets or stock of another corporation. Any issuance
by the Corporation of Shares, Options or securities convertible into Shares or
Options shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or Exercise Price of the Shares for which an Option
is exercisable. Notwithstanding the foregoing, if the Corporation shall enter
into a transaction affecting the Corporation's capital stock or distributions
to the holders of its capital stock for which a revision in the terms of each
Option is not required pursuant to this Section 9, the Committee shall have the
right, but not the obligation, to revise the terms of each
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Option in a manner the Committee, in its sole discretion, deems fair and
reasonable given the transaction involved. If necessary or appropriate in
connection with such transaction, the Committee may declare that any Option
shall terminate as of a date fixed by the Committee and give each Optionee the
right to exercise his Option in whole or in part, including exercise as to
Shares to which the Option would not otherwise be exercisable.
(f) No Restriction on Rights of Corporation.
The grant of the Option shall not affect or restrict in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or to dissolve, liquidate, sell, or
transfer all or any part of its business or assets.
10. SECURITIES LAW REQUIREMENTS.
(a) Registration.
The Corporation shall not be under any obligation to
issue any Shares upon the exercise of any Option unless and until the
Corporation has determined that: (i) it and the Optionee have taken all actions
required to register the Shares under the Securities Act of 1933, or to
perfect an exemption from the registration requirements thereof; (ii) any
applicable listing requirement of any stock exchange on which the Common Stock
is listed has been satisfied; and (iii) all other applicable provisions of
state, Federal and foreign law have been satisfied.
(b) Market Standoff Agreement.
By acceptance of an Option, each Optionee agrees that
if so requested by the Corporation or any representative of the underwriters in
connection with any registration of any securities of the Corporation under the
Act, Optionee shall not sell or otherwise transfer any of the Shares or other
securities of the Corporation during the period requested by the Corporation or
the representative of the underwriters, as the case may be. Each Optionee
agrees that the Corporation may impose stop-transfer instructions with respect
to the securities subject to the foregoing restrictions.
11. EXERCISE OF INVESTED OPTIONS.
The Committee may grant any Optionee the right to exercise any
Option prior to the complete vesting of such Option. Without limiting the
generality of the foregoing, the Committee may provide that if an Option is
exercised prior to having completely vested, the Shares issued upon such
exercise shall remain subject to vesting at the same rate as under the Option so
exercised and shall be subject to a right, but not an obligation, of repurchase
by the
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Corporation with respect to all invested Shares if the Optionee ceases to be an
Employee for any reason. For the purposes of facilitating the enforcement of
any such right of repurchase, at the request of the Committee, the Optionee
shall enter into the Joint Escrow Instructions with the Corporation and deliver
every certificate for his or her unvested Shares with a stock power executed in
blank by the Optionee and by the Optionee's spouse, if required for transfer.
12. AMENDMENT OF THE PLAN.
The Board or the Committee may, from time to time, terminate, suspend
or discontinue the Plan, in whole or in part, or revise or amend it in any
respect whatsoever including, but not limited to, the adoption of any
amendment(s) deemed necessary or advisable to qualify the Options under rules
and regulations promulgated by the Securities and Exchange Commission with
respect to Employees who are subject to the provisions of Section 16 of the
Securities Exchange Act of 1934, as amended, or to correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any Option
granted thereunder, without approval of the shareholders of the Corporation,
but without the approval of the Corporation's shareholders, no such revision or
amendment shall:
(i) Increase the number of Shares subject to the Plan,
other than any increase pursuant to Section 9;
(ii) Materially modify the requirements as to eligibility
for receipt of an Incentive Stock Option;
(iii) Materially increase the benefits accruing to Optionees
receiving Incentive Stock Options under the Plan;
(iv) Extend the term of the Plan; or
(v) Amend this Section to defeat its purpose.
13. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Common Stock
pursuant to the exercise of an Option shall be used for general corporate
purposes.
14. APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to approval by the affirmative vote of the
holders of a majority of all classes of the outstanding shares present and
entitled to vote at the first meeting of shareholders of the Corporation
following the adoption of the Plan or by written consent, and in no event later
than one (1) year following the Effective Date. Prior to such approval. Options
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may be granted but shall not be exercisable. Any amendment described in Section
12 (i) to (iv) shall also be subject to approval by the Corporation's
shareholders.
15. WITHHOLDING OF TAXES.
In the event the Corporation or a Affiliate determines that it is
required to withhold Federal, state, foreign or local taxes in connection with
the exercise of an Optionee or the disposition of Shares issued pursuant to the
exercise of an Option, the Options or any person succeeding to the rights of
the Optionee, as a condition to such exercise or disposition, may be required
to make arrangements satisfactory to the Corporation or the Affiliate to enable
it to satisfy such withholding requirements.
16. RIGHTS AS AN EMPLOYEE.
Neither the Plan nor any Option granted pursuant thereto shall be
construed to give any person the right to remain in the employ of the
Corporation or any Affiliate, or to affect the right of the Corporation or any
Affiliate to terminate such individual's employment at any time with or without
cause. The grant of an Option shall not entitle the Optionee to, or disqualify
the Optionee from, participation in the grant of any other Option under the
Plan or participation in any other benefit plan maintained by the Corporation
or any Affiliate.
17. DISAVOWAL OF REPRESENTATIONS, UNDERTAKINGS OR CREATION OF IMPLIED
RIGHTS.
In adopting and maintaining this Plan and granting options hereunder,
neither the Corporation nor any Affiliate makes any representations or
undertaking with respect to the initial qualification or treatment of Options
under federal or state tax or securities laws. The Corporation and each
Affiliate expressly disavows the creation of any rights in Employees,
Optionees, or beneficiaries of any obligations on the part of the Corporation,
any Affiliate or the Committee, except as expressly provided herein.
18. INSPECTION OF RECORDS.
Copies of the Plan, records reflecting each Optionee's Option, and any
other documents and records which an Optionee is entitled by law to inspect
shall be open to inspection by the Optionee and his or her duly authorized
representative at the office of the Committee at any reasonable business hour.
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19. INFORMATION TO OPTIONEES.
Each Optionee shall be provided with such information regarding the
Corporation as the Committee from time to time deems necessary or appropriate;
provided however, that each Optionee shall at all times be provided with such
information as is required to be provided from time to time pursuant to
applicable regulatory requirements, including, but not limited to, any
applicable requirements of the Securities and Exchange Commission, the
California Department of Corporations and other state securities agencies.
20. DELAWARE LAW TO GOVERN.
All questions pertaining to the construction, interpretation,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance with the laws of the State of Delaware.
15
[FORM IF OPTIONS ARE NOT REGISTERED]
EXHIBIT A
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED.
NONSTATUTORY STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into this ___ day of
_________, 1997, pursuant to the @ ENTERTAINMENT, INC. 1997 Stock Option Plan
(the "Plan"). The Committee administering the Plan has selected ______________
("the Optionee") to receive the following grant of a nonstatutory stock option
("Stock Option") to purchase shares of the common stock of @ ENTERTAINMENT,
INC. (the "Corporation"), on the terms and conditions set forth below to which
Optionee accepts and agrees:
1. Stock Options Granted:
No. of Shares Subject to Option ______________________________
Date of Grant ________________________________________________
Vesting Commencement Date ____________________________________
Exercise Price Per Share _____________________________________
Expiration Date ______________________________________________
2. The Stock Option is granted pursuant to the Plan to purchase
the number of shares of authorized but unissued common stock of the Corporation
specified in Section 1 hereof (the "Shares"). The Stock Option shall expire,
and all rights to exercise it shall terminate on the Expiration Date, except
that the Stock Option may expire earlier as provided in the Plan. The number of
shares subject to the Stock Option granted hereunder shall be adjusted as
provided in the Plan. This Stock Option is intended by the Corporation and the
Optionee to be a Nonstatutory Stock Option and does not qualify for any special
tax benefits to the Optionee and is not subject to Section 7 of the Plan.
3. The Stock Option shall be exercisable in all respects in
accordance with the terms of the Plan which are incorporated herein by this
reference. Optionee acknowledges having received and read a copy of the Plan.
16
4. Optionee shall have the right to exercise the Stock Option in
accordance with the following schedule:
(a) The Stock Option may not be exercised in whole or in
part at any time prior to the end of the first 4 full calendar quarters
following the Vesting Commencement Date.
(b) Optionee may exercise the Stock Option as to one
fourth of the Shares at the end of the 4th full calendar quarter following the
Vesting Commencement Date.
(c) Optionee may exercise the Stock Option as to an
additional 1/16th of the Shares at the end of each of the full calendar
quarter commencing with the 5th full calendar quarter following the Vesting
Commencement Date.
(d) The right to exercise the Stock Option shall be
cumulative. Optionee may buy all, or from time to time any part, of the maximum
number of shares which are exercisable under the Stock Option, but in no case
may Optionee exercise the Stock Option with regard to a fraction of a share, or
for any share for which the Stock Option is not exercisable.
5. The Optionee agrees to comply with all laws, rules, and
regulations applicable to the grant and exercise of the Stock Option and the
sale or other disposition of the common stock of the Corporation received
pursuant to the exercise of such Stock Option.
6. The Stock Option shall not become exercisable unless and until
the shares exercisable under the Stock Option have been qualified under the
California Corporate Securities Law of 1968, pursuant to a permit application
filed with the California Department of Corporations or unless the exercise is
otherwise exempt from the qualification requirements of such law. The Stock
Option is conditioned upon the Optionee's representation, which Optionee hereby
confirms as of the date hereof and which Optionee must confirm as of the date
of any exercise of all or any part of the Stock Option, that:
(a) Optionee understands that both this Stock Option and
any shares purchased upon its exercise are securities, the issuance of which
require compliance with state and Federal securities laws;
(b) Optionee understands that the securities have not been
registered under the Securities Act of 1933 (the "Act") in reliance upon a
specific exemption contained in the Act which depends upon Optionee's bona fide
17
investment intention in acquiring these securities, that Optionee's intention
is to hold these securities for Optionee's own benefit for an indefinite
period; that Optionee has no present intention of selling or transferring any
part thereof (recognizing that the Stock Option is not transferable) and that
certain restrictions may exist on transfer of the shares issued upon exercise
of the Stock Option;
(c) Optionee understands that the shares issued upon exercise of this
Stock Option, in addition to other restrictions on transfer, must be held
indefinitely unless subsequently registered under the Act, or unless an
exemption from registration is available; that Rule 701 and Rule 144, two
exemptions from registration which may be available, are only available after
the satisfaction of certain conditions and require the presence of a U.S.
public market for such shares; that no certainty exists that a U.S. public
market for the shares will exist, and that otherwise Optionee may have to sell
the shares pursuant to another exemption from registration which exemption may
be difficult to satisfy; and
(d) The Corporation shall not be under any obligation to issue any shares
upon the exercise of this Stock Option unless and until the Corporation has
determined that:
(i) it and Optionee have taken all actions required to register
such shares under the Securities Act, or to perfect an exemption from the
registration requirements thereof;
(ii) any applicable listing requirement of any stock exchange on
which such shares are listed has been satisfied; and
(iii) all other applicable provisions of state and Federal law have
been satisfied.
18
IN WITNESS WHEREOF, each of the parties hereto has executed this Stock
Option Agreement, in the case of the Corporation by its duly authorized
officer, as of the date and year written above.
OPTIONEE @ ENTERTAINMENT, INC.
_____________________________ By: ____________________________
(signature) (signature)
_____________________________ Its: ___________________________
(Type or Print Name)
Address: ____________________
____________________
19
[FORM IF OPTIONS ARE NOT REGISTERED]
EXHIBIT B
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE CORPORATION AND
ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into this ____ day of
__________, 1997, pursuant to the @ ENTERTAINMENT, INC. 1997 Stock Option Plan
(the "Plan"). The Committee administering the Plan has selected _______________
("the Optionee") to receive the following grant of an incentive stock option
("Stock Option") to purchase shares of the common stock of @ ENTERTAINMENT, INC.
(the "Corporation"), on the terms and conditions set forth below to which
Optionee accepts and agrees:
1. Stock Options Granted:
No. of Shares Subject to Option _________________________________
Date of Grant ___________________________________________________
Vesting Commencement Date _______________________________________
Exercise Price Per Share ________________________________________
Expiration Date _________________________________________________
2. The Stock Option is granted pursuant to the Plan to purchase the
number of shares of authorized but unissued common stock of the Corporation
specified in Section 1 hereof (the "Shares"). The Stock Option shall expire, and
all rights to exercise it shall terminate on the Expiration Date, except that
the Stock Options may expire earlier as provided in the Plan. The number of
shares subject to the Stock Option granted hereunder shall be adjusted as
provided in the Plan.
3. The Stock Option shall be exercisable in all respects in accordance
with the terms of the Plan which are incorporated herein by this reference.
Optionee acknowledges having received and read a copy of the Plan.
4. Optionee shall have the right to exercise the Stock Option in
accordance with the following schedule:
20
(a) The Stock Option may not be exercised in whole or in part
at any time prior to the end of the first 4 full calendar quarters following the
Vesting Commencement Date.
(b) Optionee may exercise the Stock Option as to one fourth of
the Shares at the end of the 4th full calendar quarter following the Vesting
Commencement Date.
(c) Optionee may exercise the Stock Option as to an additional
1/15th of the Shares at the end of each of the full calendar quarter commencing
with the 5th full calendar quarter following the Vesting Commencement Date.
(d) The right to exercise the Stock Option shall be cumulative.
Optionee may buy all, or from time to time any part, of the maximum number of
shares which are exercisable under the Stock Option, but in no case may
Optionee exercise the Stock Option with regard to a fraction of a share, or for
any share for which the Stock Option is not exercisable.
5. The Optionee agrees to comply with all laws, rules, and regulations
applicable to the grant and exercise of the Stock Option and the sale or other
disposition of the common stock of the Corporation received pursuant to the
exercise of such Stock Option.
6. The Stock Option shall not become exercisable unless and until the
shares exercisable under the Stock Option have been qualified under the
California Corporate Securities Law of 1968 pursuant to a permit application
filed with the California Department of Corporations or unless the exercise is
otherwise exempt from the qualification requirements of such law. The Stock
Option is conditioned upon the Optionee's representation, which Optionee hereby
confirms as of the date hereof and which Optionee must confirm as of the date
of any exercise of all or any part of the Stock Option that:
(a) Optionee understands that both this Stock Option and any
shares purchased upon its exercise are securities, the issuance of which
require compliance with state and Federal securities laws;
(b) Optionee understands that the securities have not been
registered under the Securities Act of 1933 (the "Act") in reliance upon a
specific exemption contained in the Act which depends upon Optionee's bona fide
investment intention in acquiring these securities; that Optionee's intention
is to hold these securities for Optionee's own benefit for an indefinite
period; that Optionee has no present intention of selling or transferring any
part thereof
21
(recognizing that the Stock Option is not transferable) and that certain
restrictions may exist on transfer of the shares issued upon exercise of the
Stock Option;
(c) Optionee understands that the shares issued upon exercise
of this Stock Option, in addition to other restrictions on transfer, must be
held indefinitely unless subsequently registered under the Act, or unless an
exemption from registration is available; that Rule 701 and Rule 144, two
exemptions from registration which may be available, are only available after
the satisfaction of certain conditions and require the presence of a U.S.
public market for such shares; that no certainty exists that a U.S. public
market for the shares will exist, and that otherwise Optionee may have to sell
the shares pursuant to another exemption from registration which exemption may
be difficult to satisfy; and
(d) The Corporation shall not be under any obligation to issue
any shares upon the exercise of this Stock Option unless and until the
Corporation has determined that:
(i) it and Optionee have taken all actions required to
register such shares under the Securities Act, or to perfect an exemption from
the registration requirements thereof;
(ii) any applicable listing requirement of any stock
exchange on which such shares are listed has been satisfied; and
(iii) all other applicable provisions of state and
Federal law have been satisfied.
22
IN WITNESS WHEREOF, each of the parties hereto has executed this Stock
Option Agreement, in the case of the Corporation by its duly authorized
officer, as of the date and year written above.
OPTIONEE @ ENTERTAINMENT, INC.
_________________________________ By:______________________________
(signature) (signature)
_________________________________ Its:_____________________________
(Type or Print Name)
Address:_________________________
23
[FORM IF OPTIONS ARE REGISTERED]
NONSTATUTORY STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into this ___ day of
____________, 1997, pursuant to the @ ENTERTAINMENT, INC. 1997 Stock Option Plan
(the "Plan"). The Committee administering the Plan has selected
___________________ (the "Optionee") to receive the following grant of a
nonstatutory stock option ("Stock Option") to purchase shares of the common
stock of @ ENTERTAINMENT, INC. (the "Corporation"), on the terms and conditions
set forth below to which Optionee accepts and agrees:
1. Stock Options Granted:
No. of Shares Subject to Option ________________________
Date of Grant __________________________________________
Vesting Commencement Date ______________________________
Exercise Price Per Share _______________________________
Expiration Date ________________________________________
2. The Stock Option is granted pursuant to the Plan to purchase
the number of shares of authorized but unissued common stock of the Corporation
specified in Section 1 hereof (the "Shares"). The Stock Option shall expire,
and all rights to exercise it shall terminate on the Expiration Date, except
that the Stock Option may expire earlier as provided in the Plan. The number of
shares subject to the Stock Option granted hereunder shall be adjusted as
provided in the Plan. This Stock Option is intended by the Corporation and the
Optionee to be a Nonstatutory Stock Option and does not qualify for any special
tax benefits to the Optionee and is not subject to Section 7 of the Plan.
3. The Stock Option shall be exercisable in all respects in
accordance with the terms of the Plan which are incorporated herein by this
reference. Optionee acknowledges having received and read a copy of the Plan.
4. Optionee shall have the right to exercise the Stock Option in
accordance with the following schedule:
(a) The Stock Option may not be exercised in whole or in
part at any time prior to the end of the first 4 full calendar quarters
following the Vesting Commencement Date.
24
(b) Optionee may exercise the Stock Option as to one fourth
of the Shares at the end of the 4th full calendar quarter following the Vesting
Commencement Date.
(c) Optionee may exercise the Stock Option as to an
additional 1/15th of the Shares at the end of each of the full calendar quarter
commencing with the 5th full calendar quarter following the Vesting
Commencement Date.
(d) The right to exercise the Stock Option shall be
cumulative. Optionee may buy all, or from time to time any part, of the maximum
number of shares which are exercisable under the Stock Option, but in no case
may Optionee exercise the Stock Option with regard to a fraction of a share, or
for any share for which the Stock Option is not exercisable.
5. The Optionee agrees to comply with all laws, rules, and
regulations applicable to the grant and exercise of the Stock Option and the
sale or other disposition of the common stock of the Corporation received
pursuant to the exercise of such Stock Option.
6. The Stock Option shall not become exercisable unless and until
the Corporation has determined that:
(a) it and Optionee have taken all actions required to
register such shares under the Securities Act, or to perfect an exemption from
the registration requirements thereof;
(b) any applicable listing requirement of any stock
exchange on which such shares are listed has been satisfied; and
(c) all other applicable provisions of state, Federal and
foreign law have been satisfied.
25
IN WITNESS WHEREOF, each of the parties has executed this Stock Option
Agreement, in the case of the Corporation by its duly authorized officer, as of
the date and year written above.
OPTIONEE @ ENTERTAINMENT, INC.
____________________________ By: ________________________________
(signature) (signature)
___________________________ Its: _______________________________
(Type or Print Name)
Address: ________________________
26
[FORM IF OPTIONS ARE REGISTERED]
INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into this ___ day of
____________, 1997, pursuant to the @ ENTERTAINMENT, INC. 1997 Stock Option Plan
(the "Plan"). The Committee administering the Plan has selected
___________________ (the "Optionee") to receive the following grant of an
incentive stock option ("Stock Option") to purchase shares of the common
stock of @ ENTERTAINMENT, INC. (the "Corporation"), on the terms and conditions
set forth below to which Optionee accepts and agrees:
1. Stock Options Granted:
No. of Shares Subject to Option ________________________
Date of Grant __________________________________________
Vesting Commencement Date ______________________________
Exercise Price Per Share _______________________________
Expiration Date ________________________________________
2. The Stock Option is granted pursuant to the Plan to purchase
the number of shares of authorized but unissued common stock of the Corporation
specified in Section 1 hereof (the "Shares"). The Stock Option shall expire,
and all rights to exercise it shall terminate on the Expiration Date, except
that the Stock Option may expire earlier as provided in the Plan. The number of
shares subject to the Stock Option granted hereunder shall be adjusted as
provided in the Plan.
3. The Stock Option shall be exercisable in all respects in
accordance with the terms of the Plan which are incorporated herein by this
reference. Optionee acknowledges having received and read a copy of the Plan.
4. Optionee shall have the right to exercise the Stock Option in
accordance with the following schedule:
(a) The Stock Option may not be exercised in whole or in
part at any time prior to the end of the first 4 full calendar quarters
following the Vesting Commencement Date.
(b) Optionee may exercise the Stock Option as to one fourth
of the Shares at the end of the 4th full calendar quarter following the
Vesting Commencement Date.
27
(c) Optionee may exercise the Stock Option as to an
additional 1/16th of the Shares at the end of each of the full calendar quarter
commencing with the 5th full calendar quarter following the Vesting
Commencement Date.
(d) The right to exercise the Stock Option shall be
cumulative. Optionee may buy all, or from time to time any part, of the maximum
number of shares which are exercisable under the Stock Option, but in no case
may Optionee exercise the Stock Option with regard to a fraction of a share, or
for any share for which the Stock Option is not exercisable.
5. The Optionee agrees to comply with all laws, rules, and
regulations applicable to the grant and exercise of the Stock Option and the
sale or other disposition of the common stock of the Corporation received
pursuant to the exercise of such Stock Option.
6. The Stock Option shall not become exercisable unless and until
the Corporation has determined that:
(a) it and Optionee have taken all actions required to
register such shares under the Securities Act, or to perfect an exemption from
the registration requirements thereof;
(b) any applicable listing requirement of any stock
exchange on which such shares are listed has been satisfied; and
(c) all other applicable provisions of state, Federal and
foreign law have been satisfied.
28
IN WITNESS WHEREOF, each of the parties hereto has executed this Stock
Option Agreement, in the case of the Corporation by its duly authorized officer,
as of the date and year written above.
OPTIONEE @ ENTERTAINMENT, INC.
____________________________ By: ________________________________
(signature) (signature)
___________________________ Its: _______________________________
(Type or Print Name)
Address: ________________________
________________________
29
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