Exhibit 10.51
OPTION AGREEMENT
OPTION AGREEMENT dated February 21, 1998, between ACTV, Inc.,
a Delaware corporation (the "Corporation") and Xxxxxxx X. Xxxxxxx (the
"Employee").
The Corporation desires to grant to the Employee the right and
option to purchase up to 1,362,000 shares (the "Option Shares") of Common Stock
(the "Common Stock"), of the Corporation, on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. OPTION TO PURCHASE COMMON STOCK.
a. Subject to Section 5 hereof, the Corporation
hereby grants to the Employee an option (the "Option") to purchase from the
Corporation 1,362,000 Option Shares, at a purchase price of $1.60 per Option
Share (the "Option Price"). The Employee's right and option to purchase the
Option Shares shall vest annually commencing January 1, 2000 until January 1,
2002, with respect to installments of 454,000 Option Shares at the Option Price,
so long as the Employee is employed by the Corporation. Said right shall be
cumulative so that as of January 1, 2002, Optionee shall have the fully vested
right to purchase 1,362,000 Option Shares. In the event that the Employee's
employment with the Corporation terminates prior to January 1 of any year, the
Employee shall not have the right or option to purchase any part of the
installment of 454,000 Option Shares that would have otherwise vested on such
January 1. With respect to the Option, the "Option Period" shall commence on the
date hereof and terminate on December 31, 2006.
b. The Option may be exercised by the Employee by
delivery to the Corporation, at any time commencing one year from the date
hereof, of a written notice (the "Option Notice"), which Option Notice shall
state the Employee's intention to exercise the Option, the date on which the
Employee proposes to purchase the Option Shares (the "Closing Date") and the
number of Option Shares to be purchased on the Closing Date, which Closing Date
shall be no later than 30 days nor earlier than 10 days following the date of
the Option Notice. Upon receipt by the Corporation of an Option Notice from the
Employee, the Employee shall be obligated to purchase that number of Option
Shares to be purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired
pursuant to the terms of this Option Agreement shall be made on the Closing Date
at the offices of the Corporation. Delivery of the Stock certificate or other
instrument registered in the name of the Employee, evidencing the Option Shares
being purchased on the Closing
Date, shall be made by the Corporation to the holder of this Option on the
Closing Date against the delivery to the Corporation of a check in the full
amount of the aggregate purchase price therefor.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The
Employee hereby represents and warrants to the Corporation that in the event the
Employee acquires any Option Shares, such Option Shares will be acquired for his
own account, for investment and not with a view to the distribution thereof. The
Employee understands that except as set forth in Section 6 hereof, the Option
Shares will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4 (2)
thereof and that they must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act or the transaction is except from
registration.
SECTION 3. REORGANIZATION; MERGERS; SALES; ETC. If, at any
time during the Option Period, there shall be any capital reorganization,
reclassification of Common Stock (other than a change in par value or from par
value to nor par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which the Employee
would have been entitled if the Employee had held shares of Common Stock
issuable upon the exercise hereof immediately prior to such reorganization,
reclassification, consolidation, merger or sale. The provisions of this Section
3 shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers and sales.
SECTION 4. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE.
a. The number of Option Shares subject to this Option
during the Option Period shall be cumulative as to all prior dates of
calculation and shall be adjusted for any stock dividend, subdivision, split-up
or combination of Common Stock
b. If, at any time through December 31, 2001 of the
Option Period, the Corporation issues any previously unissued Common Stock over
and beyond the number of shares outstanding February 21, 1998, then the number
of shares subject to the Option shall be adjusted such that the holder thereof
shall have the right to exercise the Option for the same percentage of the
issued and outstanding Common Stock of the
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Corporation as he held option shares on February 21, 1998.
c. The Option Price shall be subject to adjustment
from time to time as follows:
(1) If, at any time during the Option Period, the
number of shares of Common Stock outstanding is increased by a stock dividend
payable in shares of Common Stock or by a subdivision or split-up of shares of
Common Stock, then, immediately following the record date fixed for the
determination of holders of shares of Common Stock entitled to receive such
stock dividend, subdivision or split-up, the Option Price shall be appropriately
decreased so that the number of shares of Common Stock issuable upon the
exercise hereof shall be increased in proportion to such increase in outstanding
shares.
(2) If, at any time during the Option Period, the
number of shares of Common Stock outstanding is decreased by a combination of
outstanding shares of Common Stock, then, immediately following the record date
for such combination, the Option Price shall be appropriately increased so that
the number of shares of Common Stock issuable upon the exercise hereof shall be
decreased in proportion to such decrease in outstanding shares.
SECTION 5. TERMINATION OF THE OPTIONS.
a. TERMINATION OF OPTIONS IN GENERAL. Subject to
subsections (b) - (c) of this Section, the Option granted hereby shall terminate
and the Option shall no longer be exercisable after the earlier of December 31,
2006, except in the case of death or disability.
b. OPTION RIGHTS UPON DISABILITY. If an Employee
becomes disabled while employed by the Corporation or any affiliate or
subsidiary, the Board of Directors or the Stock Option Committee of the
Corporation, will allow the Option to be fully exercised, to the extent that the
Employee was entitled to exercise the Option at the date of his disability.
c. DEATH OF THE OPTIONEE. In the event that an
Employee shall die while he is an employee of the Corporation and prior to his
complete exercise of the Option, the Option may be exercised in whole or in part
only: (i) by the Employee's estate or on behalf of such person or persons to
whom the Employee's rights pass under his Will or by the laws of descent and
distribution, (ii) to the extent that the Employee was entitled to exercise the
Option at the date of his death, and (iii) prior to the expiration of the term
of the Option.
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SECTION 6. PIGGYBACK REGISTRATION.
a. If, at any time commencing January 1, 2000 and
expiring December 31, 2006, the Corporation proposes to register any of its
securities under the Securities Act (other than in connection with a merger or
pursuant to Form S-8 or other comparable Form) it will give written notice by
registered mail, at least thirty (30) days prior to the filing of such
registration statement, to the Employee of its intention to do so. If the
Employee notifies the Corporation within ten (10) days after receipt of any such
notice of his desire to include any Option Shares, owned by him (on a fully
vested basis) in such proposed registration statement, the Corporation shall
afford the Employee the opportunity to have any of his Option Shares registered
under such registration statement, the Corporation shall afford the Employee the
opportunity to have any of his Option Shares registered under such registration
statement; provided that (i) such inclusion does not pose any significant legal
problem and (ii) if such registration statement is filed pursuant to an
underwritten public offering, the underwriter approves such inclusion.
b. Notwithstanding the provisions of this Section 6,
the Corporation shall have the right at any time after it shall have given
written notice pursuant to this Section 6 (irrespective of whether a written
request for inclusion of any Option Shares shall have been made) to elect not to
file any such proposed registration statement, or to withdraw the same after the
filing but prior to the effective date thereof.
c. Employee will cooperate with the Corporation in
all respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Corporation and executing and returning
all documents reasonably requested in connection with the registration and sale
of the Option Shares. In addition, Employee will comply with all applicable
provisions of state and federal securities laws, including rule 10b-6 and will
not, during the course of a distribution, purchase any of the securities being
distributed.
d. All expenses incurred in any registration of the
Option Shares under this Agreement shall be paid by the Corporation, including,
without limitation, printing expenses, fees and disbursements of counsel for the
Corporation, expenses of any audits to which the Corporation shall agree or
which shall be necessary to comply with governmental requirements in connection
with any such registration, all registration and filing fees for the Option
Shares under federal and state securities laws, and expenses of complying with
the securities or blue sky laws of any jurisdictions; provided, however, the
Corporation shall not be liable for (a) any discounts or commissions to any
underwriter; (b) any stock transfer taxes incurred with respect to Option Shares
sold in the offering or (c) the fees and expenses of counsel for Employee,
provided that the Corporation will pay, the costs and expenses of Employee's
counsel when the Corporation's counsel is representing all selling security
holders.
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SECTION 7. TRANSFER OF OPTION; SUCCESSORS AND ASSIGNS. This
Agreement (including the Option) and all rights hereunder shall not be
transferable at any time without the prior written consent of the Corporation.
This Agreement and all the rights hereunder shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns and
transferees.
SECTION 8. NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If the Corporation, to:
ACTV, Inc.
1270 Avenue of the Americas - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Day Xxxxxxxxx, Senior Vice President,
General Counsel
With a copy to:
Xxx Xxxxxxxxx, Esquire
Gersten, Savage, Xxxxxxxxx & Xxxxxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Employee, to:
Xxxxxxx X. Xxxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with the laws of the State of New York.
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SECTION 10. ENTIRE AGREEMENT. This Agreement, which includes
December 31, 1999 updated information, contains the entire agreement between the
parties hereto with respect to the transactions contemplated herein, and
supersedes all previously written or oral negotiations, commitments,
representations and agreement.
SECTION 11. AMENDMENTS AND MODIFICATIONS. This Agreement, or
any provision hereof, may not be amended, changed or modified without the prior
written consent of each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Option
Agreement to be executed and delivered as of the date first above written.
ACTV, Inc.
By:
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Day Xxxxxxxxx
Senior Vice President,
General Counsel
Agreed:
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Xxxxxxx X. Xxxxxxx
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