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Exhibit 10.31
NON-INCENTIVE STOCK OPTION AGREEMENT
THIS NON-INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is dated as of
June 18, 1997 and is by and between NATIONAL MEDIA CORPORATION, a Delaware
corporation with its principal office located at Eleven Penn Center, Suite 1100,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Company"), and ▇▇▇
▇▇▇▇▇▇ (the "Optionee").
The Compensation Committee of the Board of Directors of the Company
(the "Committee") has determined to grant to the Optionee an option to purchase
shares of the Company's Common Stock in order to provide the Optionee with an
added incentive to contribute to the Company's future success and prosperity.
The option granted herein shall be subject to all of the terms and conditions of
the Company's Amended and Restated Stock Option Plan, as it may be amended from
time to time hereafter (the "Plan"). Capitalized terms contained herein and not
otherwise defined shall have the meanings ascribed to such terms in the Plan.
The Option (as defined below) is hereby granted in lieu of, and in replacement
of, that certain option to purchase 50,000 shares of the Company's Common Stock
at a price of $16.375 per share, issued in July 1996. Such prior option shall be
of no further force and effect, and such options shall be once again available
for reissuance under the Plan.
Accordingly, in consideration of the premises set forth herein, and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the Company hereby grants the Optionee the option to acquire shares of the
common stock of the Company upon the following terms and conditions:
1. Grant of Option.
(a) The Company hereby grants to the Optionee the right and
option (the "Option") to purchase up to Twenty-five Thousand (25,000) fully paid
and non-assessable shares of common stock, par value $.01 per share, of the
Company (the "Shares"), to be issued upon the exercise hereof.
(b) Assuming the membership of Optionee on the Company's Board
of Directors on April 25, 2001, the Option to purchase the Shares shall vest on
April 25, 2001, subject to the following provisions for accelerated vesting:
assuming the membership of Optionee on the Company's Board of Directors on such
date, the Option shall vest immediately (i) in the event of a Change of Control
(as defined in the Plan); or (ii) in the event that the closing price as
reported on the New York Stock Exchange is $35.00 or more for ten (10)
consecutive trading days (subject to appropriate adjustment in the event of any
stock combination, stock split, etc.). In addition, assuming the membership of
Optionee on the Company's Board of Directors as of March 31 of the applicable
fiscal year, in the event that the Company achieves the following
earnings-per-share ratios (subject to appropriate adjustment in the event of any
stock combination, stock split, etc.) calculated cumulatively from the fiscal
year ending March 31, 1997, one-fifth of the shares underlying the Option shall
vest immediately for each fiscal year("FY"): FY1997: $.80; FY1998: $1.73;
FY1999: $2.79; and FY2000: $4.01. The Option
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may only be exercised as to the portions thereof which shall have become vested
as of the intended date of exercise.
(c) Subject to the vesting schedule set forth above, the
Option may be exercised during the period ("Option Period") commencing on the
date hereof and, unless sooner terminated as provided herein, expiring and
terminating at 5:00 p.m. Eastern Standard Time on the tenth (10th) anniversary
of this Agreement, at which time the Optionee shall have no further right to
purchase any Shares not then purchased. The Company shall at all times during
the term of this Agreement reserve and keep available such number of Shares as
will be sufficient to satisfy the requirements of this Agreement.
(d) It is not intended that the Option qualify as an Incentive
Stock Option within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended (the "Code").
2. Exercise Price. The exercise price of the Option (the "Exercise
Price") shall be $7.25 per Share, and shall be payable by certified or bank
check payable to the order of the Company in full at the time of the exercise in
cash or, with the consent of the Committee in its sole discretion, by delivering
(i) shares of Common Stock already owned by the Optionee and having a fair
market value (as determined under the Plan) on the date of exercise equal to the
Exercise Price, or (ii) a combination of cash and shares of Common Stock with a
fair market value equal to the Exercise Price.
3. Exercise of Option. The Optionee may exercise this Option, to the
extent then vested, to purchase Shares by providing notice to the Company by
registered or certified mail, return receipt requested, addressed to its
principal office, or by hand delivery, signed by the Optionee, indicating the
number of whole Shares which Optionee desires to purchase under the Option. The
notice shall be accompanied by payment of the Option Price therefor as specified
in Paragraph 2 above, any amounts payable pursuant to Paragraph 10 below and any
required written representation as specified pursuant to Paragraph 7 below. As
soon as practicable after the receipt of such notice of exercise, payments and
written representation, the Company shall issue to the Optionee a certificate(s)
issued in the Optionee's name evidencing the Shares purchased by the Optionee
hereunder, subject to the Company's right to require that Optionee execute such
other documents as it deems reasonably necessary.
4. Limitations on Right to Exercise. Should the Optionee cease to be an
Eligible Participant for any reason other than the Optionee's death or
disability, the Option (to the extent then vested) shall be exercisable for a
period of three months after the Optionee ceases to be an Eligible Participant
or until the expiration of the Option Period, whichever shall occur first.
5. Death or Disability of Optionee. In the event of the death or
disability of the Optionee while the Optionee is an Eligible Participant (or the
death of the Optionee within three months after the date on which the Optionee
ceases to be an Eligible Participant), any unexercised portion of the Option
shall be exercisable (to the extent that the Option was exercisable at the time
of the Optionee's death or disability) for a period of one year after the
Optionee's death or disability or upon the expiration of the Option Period,
whichever shall occur
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first, and, in the event of the death of the Optionee, shall be exercisable only
by the Optionee's personal representative or such person or persons to whom the
Optionee's rights pass under the Optionee's will or by the laws of descent and
distribution.
6. Non-Transferability of Option. Except as provided in Paragraph 5
herein, the Option shall be exercisable only by the Optionee. The Optionee may
not give, grant, sell, exchange, transfer legal title, pledge, assign or
otherwise encumber or dispose of the Option herein granted or any interest
therein, otherwise than by will or the laws of the descent and distribution or,
if permitted under Rule 16b-3 promulgated under the Securities Exchange Act of
1934 and by the Committee in its sole discretion pursuant to a qualified
domestic relations order as defined in the Code or Title I of ERISA or the rules
promulgated thereunder. Upon any attempt to so transfer the Option, or upon the
levy or attachment or similar process of the Option, the Option shall
automatically become null and void.
7. Restriction on Issuance of Shares - Investment Representation. The
Optionee agrees for himself, his heirs and legatees that, unless at the time of
exercise there exists an effective registration statement under the Securities
Act of 1933 concerning the Shares issuable pursuant to the Option providing for
the issuance of such Shares to the Optionee and/or the subsequent transfer of
the Shares by Optionee, any and all Shares purchased upon the exercise of the
Option shall be acquired for investment and not for distribution. Upon the
issuance of any or all of the Shares subject to the Option, the Company, in its
discretion and in accordance with the foregoing, may require the Optionee, or
his heirs or legatees receiving such Shares, to deliver to the Company a
representation in writing, in a form satisfactory to the Board, that such Shares
are being acquired in good faith for investment and not for distribution. In
accordance with the foregoing, (i) the Company may place with its transfer agent
a "stop transfer" order with respect to such Shares and may place an appropriate
restrictive legend on the certificate(s) evidencing such Shares; and (ii) any
stock certificates issued upon the exercise of the Option may bear an
appropriate restrictive legend, if deemed necessary by the Company.
8. No Rights as Shareholder. The Optionee shall have no rights as a
shareholder of the Company in respect of the Shares as to which the Option shall
not have been exercised and payment made as herein provided.
9. No Obligation Relating to Engagement of Optionee. Nothing herein
shall obligate the Company or any of its subsidiaries to engage the Optionee,
nor shall this Agreement constitute an agreement of employment or for services,
nor confer upon the Optionee any right to continue to render services to the
Company or any of its subsidiaries or interfere in any way with the right of the
Company or any of its subsidiaries to terminate the services of the Optionee at
any time without liability to the Company or the subsidiary.
10. Taxes. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it determines is required in
connection with any options granted under the Plan. The Company may further
require notification from the Optionee upon any disposition of Shares acquired
pursuant to the exercise of the Option.
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11. Conflict between Option Agreement and Plan. In the event of any
conflicts between this Agreement and the terms and conditions of the Plan, the
terms and conditions of the Plan shall control.
12. Binding Effect. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto, their legal representatives and assigns.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed wholly within the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
Attest: NATIONAL MEDIA CORPORATION
By: By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
Vice Chairman
Witness:
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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