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EXHIBIT 10.33
FORM OF COMMON STOCK PURCHASE WARRANT
This Common Stock Purchase Warrant (the "Warrant") has been issued as
of October 10, 1997 (the "Effective Date") by DIGITAL TELEVISION SERVICES, INC.,
a Delaware corporation (unless the context otherwise requires, together with any
present or future parent or subsidiary of Digital Television Services, Inc.
(collectively, "Related Companies") the "Company"), to [NAME] (the "Holder")
pursuant to the terms and provisions of the definition of "Preferred Stock
Corporate Conversion" in the Amended and Restated Limited Liability Company
Agreement of Digital Television Services, LLC dated February 10, 1997, as
amended (the "LLC Agreement") by which Digital Television Services, LLC merged
with and into WEP Intermediate Corp. to form the Company as of the Effective
Date and pursuant to which the Holder became entitled to receive this Warrant.
1. DEFINITIONS. Throughout this Warrant, capitalized terms not
otherwise defined herein shall have the meanings indicated in the LLC Agreement.
2. WARRANT. Subject to the terms and conditions set forth herein, the
Company hereby certifies that, for value received, ▇▇▇▇▇▇ is entitled to
purchase from the Company, at $22.50 per share (the "Purchase Price"), up to,
but not exceeding in the aggregate, [ # ] shares of Common Stock (the
"Warrant"). The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
3. VESTING AND EXERCISABILITY/ EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Vesting and Exercisability. This Warrant shall be vested in the
Holder for that number of shares of Common Stock as may be determined
by multiplying (a) 25%, by (b) the number of full years that have
passed since [ENTER DATE OF AWARD OF CLASS D UNITS] by (c) the number
of shares of Common Stock specified as being subject to this Warrant in
Section 2 above.
(b) Effect of Termination of Employment. If the Holder (or if the
Holder is not the person who originally received the award of Class D
Units, then if such person) ceases to be employed by the Company for
any reason (including death, disability, voluntary termination,
termination of the Holder by the Company whether with or without cause,
or otherwise) prior to vesting this Warrant shall be forfeited. To the
extent this Warrant has become exercisable by satisfying the vesting
conditions but has not been exercised before the Holder (or if the
Holder is not the person who originally received the award of Class D
Units, then if such person) ceases to be employed by the Company for
any reason (including death, disability, voluntary termination,
termination of the Holder by the Company whether with or without cause,
or otherwise) the Warrant may be exercised within the Warrant Period.
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4. WARRANT EXPIRATION. This Warrant shall expire on the date that is 10
years from the Effective Date (the period of time prior to expiration and after
the Effective Date is referred to herein as the "Warrant Period").
5. PARTIAL EXERCISE. Once vested and exercisable and until expiration,
this Warrant may be exercised at any time and from time to time.
6. PAYMENT OF PURCHASE PRICE.
(a) Form of Payment. The Purchase Price shall be paid in
the following manner:
(i) in cash;
(ii) provided that (A) payment pursuant to this
Section 6(a)(ii) is made within 5 years of the
Effective Date; (B) no Substitute Warrant has been
received pursuant to Section 12; and (C) the Holder
(or where appropriate, the person who originally
received Class D Units from Digital Television
Services, LLC) remains employed by the Company at the
time of payment, by delivery of a nonrecourse,
noninterest bearing promissory note and the shares
purchased thereby shall be subject to a pledge
agreement in such form as the Company shall
determine;
(iii) subject to Section 6(b) below, by delivery of
shares of the Company's Common Stock having a fair
market value (as determined by the Board or a
Committee thereof) equal as of the date of exercise
to the Purchase Price;
(iv) by delivery of an assignment satisfactory in
form and substance to the Company of a sufficient
amount of the proceeds from the sale of the Warrant
shares and an instruction to the broker or selling
agent to pay that amount to the Company; or
(v) by any combination of the foregoing.
(b) Limitations on Payment by Delivery of Common Stock. If the
Holder delivers Common Stock held by the Holder ("Old Stock") to the Company in
full or partial payment of the Purchase Price, and the Old Stock so delivered is
subject to restrictions or limitations imposed by agreement between the Holder
and the Company, an equivalent number of Warrant Shares shall be subject to all
restrictions and limitations applicable to the Old Stock to the extent that the
Holder paid for the Warrant Shares by delivery of Old Stock, in addition to any
restrictions or limitations imposed by this Warrant. Notwithstanding the
foregoing, the Holder may not pay any part of the Purchase Price hereof by
transferring Common Stock to the Company
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unless such Common Stock has been owned by the Holder free of any substantial
risk of forfeiture for at least six months.
7. COMPLIANCE WITH THE SECURITIES ACT; LEGEND. Warrant shares will be
of an illiquid nature and will be deemed to be "restricted securities" for
purposes of the Securities Act of 1933, as amended (the "Securities Act").
Accordingly, such shares must be sold in compliance with the registration
requirements of the Securities Act or an exemption therefrom. Each certificate
evidencing any of the Warrant shares shall bear a legend substantially as
follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS. SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS, UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE CORPORATION) OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION, SUCH REGISTRATION IS NOT
REQUIRED. SUCH SHARES ARE ALSO SUBJECT TO THE PROVISIONS OF A WARRANT
AGREEMENT DATED OCTOBER 10, 1997 AND A STOCKHOLDERS AGREEMENT DATED
OCTOBER 10, 1997, A COPY OF EACH OF WHICH THE CORPORATION WILL FURNISH
TO THE HOLDER OF THIS CERTIFICATE UPON REQUEST AND WITHOUT CHARGE.
8. COMPANY'S OPTION TO REPURCHASE SHARES UPON TERMINATION OF
EMPLOYMENT. Pursuant to Section 4.3 of that certain Stockholders Agreement dated
as of October 10, 1997 between the Company and its stockholders (the
"Stockholders Agreement"), if the initial Holder's employment with the Company
or any Related Company is terminated for any reason (including death,
disability, voluntary termination, or termination by the Company with or without
cause or otherwise), the Company followed by all 10% Stockholders shall have the
option to purchase all of Holder's shares of Common Stock of the Company on the
terms and conditions specified in such Section 4.3.
9. METHOD OF EXERCISING WARRANT. Subject to the terms and conditions of
this Agreement, this Warrant may be exercised by written notice to the Company,
at the principal executive office of the Company, or to such transfer agent as
the Company shall designate. Such notice shall state the election to exercise
this Warrant and the number of Warrant shares for which it is being exercised
and shall be signed by the person or persons so exercising this Warrant. Such
notice shall be accompanied by payment of the full Purchase Price of such
shares, and the Company shall deliver a certificate or certificates representing
such shares as soon as practicable (generally within 60 days of the Exercise
Date); provided, however, that such shares, if purchased with a noninterest
bearing nonrecourse promissory note, will be held by the Company under the
pledge agreement. Such certificate or certificates shall be registered in the
name of the
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person or persons so exercising this Warrant (or, if this Warrant shall be
exercised by the Holder and if the Holder shall so request in the notice
exercising this Warrant, shall be registered in the name of the Holder and
another person jointly, with right of survivorship). In the event this Warrant
shall be exercised by any person or persons other than the person to whom this
Warrant was originally issued, such notice shall be accompanied by proof
acceptable to the Company of the right of such person or persons to exercise
this Warrant.
10. WARRANT NOT TRANSFERABLE. This Warrant is not transferable or
assignable except by will or by the laws of descent and distribution. Except as
set forth in the preceding sentence, during the initial Holder's lifetime, only
the initial Holder can exercise this Warrant.
11. NO OBLIGATION TO EXERCISE WARRANT. The grant and acceptance of this
Warrant imposes no obligation on the Holder to exercise it.
12. ADJUSTMENTS. The Purchase Price and the number of shares of Common
Stock subject to this Warrant shall be subject to adjustment from time to time
in accordance with this Section 12.
If the Company (i) pays a dividend in shares of capital stock of the
Company on the Company's outstanding Common Stock; (ii) distributes shares of
capital stock of the Company to holders of Common Stock of the Company; (iii)
subdivides the outstanding shares of the Company's Common Stock into a greater
number of shares of the Company's Common Stock; or (iv) combines the outstanding
shares of the Company's Common Stock into a smaller number of the shares of the
Company's Common Stock, then the number of shares and the Purchase Price per
share subject to this Warrant shall be adjusted so that the Holder of this
Warrant shall be entitled to receive the number of shares that such Holder would
have owned immediately following such action had the Warrant been exercised
immediately prior to the action. Any adjustment made pursuant to this paragraph
shall be effective on the record date in the case of a dividend or distribution,
and shall become effective on the effective date of a subdivision or
combination.
If the Company is a party to any reorganization, reclassification of
the Company's stock, consolidation or merger with another company, or the sale
of all or substantially all the Company's assets to another company is effected
in such a way that the holders of any class of the Company's capital stock are
entitled to receive stock, other securities, cash or other property with respect
to or in exchange for shares of the Company's stock, then in connection with
such reorganization, reclassification, consolidation, merger or sale, adequate
provision shall be made by which the Holder of this Warrant shall have the right
to receive a substitute warrant or similar instrument exercisable under similar
terms as this Warrant (a "Substitute Warrant") except that in lieu of the shares
purchasable upon exercise of this Warrant such substitute instrument shall be
exercisable for such shares of stock, other securities, cash or other property
as would have been issuable or payable with respect to or in exchange for that
number of the Company's shares equal to the number of shares of such stock
immediately theretofore purchasable or receivable upon
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exercise of this Warrant had such reorganization, reclassification,
consolidation, merger or sale not occurred. Notwithstanding the foregoing,
however, the provisions of this Warrant providing for payment of the Purchase
Price in the form of a nonrecourse, noninterest bearing note need not be
provided for in the Substitute Warrant.
13. RIGHTS AS STOCKHOLDER. A Holder shall have no rights as a
stockholder of the Company with respect to any shares underlying the Warrant
until the day of the payment of the Purchase Price in accordance with the terms
and provisions hereof. Subject to Section 12 herein, no adjustments shall be
made for dividends (whether ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date of such payment.
14. DEFERRAL OF ISSUANCE TO COMPLY WITH APPLICABLE LAW; NO OBLIGATION
TO REGISTER SHARES. Anything in this Warrant Agreement to the contrary
notwithstanding, if, at any time specified herein for the issuance of Warrant
Shares, any law, regulation or requirements of any governmental authority having
jurisdiction in the premises shall require either the Company or the Holder, in
the judgment of the Company, to take any action in connection with the shares
then to be issued, then the issuance of such shares shall be deferred until such
action shall have been taken. Nothing in this Warrant Agreement shall be
construed to obligate the Company at any time to file or maintain the
effectiveness of a registration statement under the Securities Act, or under the
securities laws of any state or other jurisdiction, or to take or cause to be
taken any action that may be necessary in order to provide an exemption from the
registration requirements of the Securities Act under Rule 144 or any other
exemption with respect to the Warrant or the Warrant shares or otherwise for
resale or other transfer by the Holder of the Warrants or Warrant shares as a
result of the exercise of the Warrant.
15. RESOLUTION OF DISPUTES. Any dispute or disagreement that arises
under, as a result of or pursuant to this Warrant Agreement shall be resolved by
the Board of Directors of the Company (or by a Committee thereof). Each and
every such resolution, and each and every interpretation by the Committee (or by
the Board) of the terms of this Warrant Agreement shall be conclusive as to all
persons affected thereby.
16. RESERVATION OF CAPITAL STOCK, ETC., ISSUABLE UPON EXERCISE OF
WARRANT. The Company shall at all times reserve and keep available out of its
authorized but unissued Common Stock, solely for issuance and delivery upon the
exercise of this Warrant and other similar Warrants, such number of its duly
authorized shares of Common Stock as from time to time shall be issuable upon
the exercise of this Warrant and all other similar Warrants.
17. PRIVATE PLACEMENT. The Holder does hereby represent and warrant to
the Company and to the holders of all other similar Warrants as follows:
(1) the Holder's acquisition of the Warrant is not, and the
Holder's acquisition of Common Stock upon exercise of the Warrant will
not be, in either case, with a view to
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the distribution thereof; such Holder will have no participation in any
undertaking to distribute the Warrant or such Common Stock nor any
participation in the underwriting of any such undertaking;
(2) the Holder has had the opportunity to discuss the
Company's business, management and financial affairs with the Company's
executive officers and has had the opportunity to review the Company's
books, records and facilities; and
(3) the Holder has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of investing in the Company by acquiring the Warrant.
18. LOCK-UP AGREEMENT; STOCKHOLDER'S AGREEMENT; OTHER AGREEMENTS. The
Holder agrees that in connection with an underwritten public offering of Common
Stock, upon the request of the Company or the principal underwriter managing
such public offering, the Warrant shares may not be sold, offered for sale or
otherwise disposed of without the prior written consent of the Company or such
underwriter, as the case may be, for at least 180 days after the effectiveness
of the registration statement filed in connection with such offering, or such
longer period of time as the Board may determine if all of the Company's
directors and officers who hold capital stock of the Company agree to be
similarly bound. The obligations under this Section 18 shall remain effective
for all underwritten public offerings with respect to which the Company has
filed a registration statement on or before the date five (5) years after the
closing of the Company's initial public offering; provided, however, that this
Section 18 shall cease to apply to any Warrant share sold to the public pursuant
to an effective registration statement or an exemption from the registration
requirements of the Securities Act in a transaction that complied with the terms
of this Warrant Agreement. ▇▇▇▇▇▇ further agrees to execute and be bound by a
Stockholders' Agreement.
19. TAX TREATMENT. This Warrant has been issued pursuant to the
provisions of the definitions of "Preferred Stock Corporate Conversion" and
"Common Stock Conversion Amount" provided in the LLC Agreement. Accordingly,
this Warrant is received by its initial Holder in exchange for and in full
satisfaction of such ▇▇▇▇▇▇'s rights with respect to such Holder's Class D Units
under the LLC Agreement. Because the initial Holder of this Warrant previously
made a Section 83(b) Election with respect to the Class D Units for which this
Warrant is exchanged, for federal income tax purposes the Holder of this Warrant
is treated as the owner of the property consisting of the Class D Units and such
Class D Units are not thereafter governed by Section 83 of the Internal Revenue
Code of 1986, as amended ("Code"); provided, however, that to the extent that it
is ever determined that the issuance of this Warrant is properly classified for
federal tax purposes as the issuance of an option to an "employee" and not to a
consultant or other non-employee ("employee" having the meaning provided in
Treas. Reg. ss 1.421-7(h)), then this Warrant shall be deemed to have been
issued as an incentive stock option (as defined in Section 422 of the Code)
pursuant to the Digital Television Services, Inc. 1997 Stock Option Plan (the
"Plan") to the greatest extent permitted by law.
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20. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant
Agreement and (in the case of loss, theft or destruction) upon delivery of an
unsecured indemnity agreement in an amount reasonably satisfactory to it, or (in
the case of mutilation) upon surrender and cancellation thereof, the Company
will issue, in lieu hereof, a new Warrant Agreement of like tenor evidencing the
Warrant.
21. MISCELLANEOUS.
(a) Binding on Successors and Representatives. The parties
understand that this Warrant Agreement shall be binding not only upon
themselves, but also upon their heirs, executors, administrators,
representatives, successors and assigns; and the parties agree, for themselves
and their heirs, administrators, representatives, successors and assigns, to
execute any instrument that may be necessary or desirable legally to effect such
understanding.
(b) Entire Agreement. This Warrant Agreement evidences the
entire agreement of the parties with respect to the Warrant and supersedes any
previous agreement, whether written or oral, with respect thereto.
(c) Amendment. Neither this Warrant Agreement nor any of the
terms and conditions herein set forth may be altered or amended orally. Any such
alteration or amendment shall be effective only when reduced to writing and
signed by each of the parties or their respective successors and assigns.
(d) Construction of Terms. Any reference herein to the
singular or plural shall be construed as plural or singular whenever the context
requires.
(e) Notices. All notices and requests under this Warrant shall
be in writing and shall be deemed to have been given when personally delivered
or sent prepaid certified or registered mail:
(i) if to the Company, to the following address:
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Digital Television Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer (or in the
case the Holder is the Chief Financial Officer,
the Chief Executive Officer)
or to such other address as the Company
shall designate by notice, in any case
marked to the attention of the most senior
financial officer of the Company, other than
the Holder, whose principal office is
located at such address.
(ii) if to the Holder, to the Holder's address
appearing in the Company's records, or to
such other address as the Holder shall
designate by notice.
(f) Governing Law; Submission to Exclusive Jurisdiction. This
Warrant Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware. All disputes between or among any Holder, any person
holding or claiming to hold any Holder's Warrant, the Company (or any Related
Company), and any other person having a dispute with respect to this Warrant
shall be solely and finally settled by the Board of Directors (or a Committee
thereof). Each person referred to in this Section 21(f) hereby irrevocably
consents to the exclusive personal jurisdiction of the courts of Georgia with
respect to matters arising out of or related to the Board's or Committee's
determinations made hereunder, and with respect to matters, if any, related to
this Warrant not required to be determined by the Board or Committee.
(g) Severability. The invalidity or unenforceability of any
particular provision of this Warrant Agreement shall not affect the other
provisions hereof, and this Warrant Agreement shall be construed in all respects
as if such invalid or unenforceable provisions were omitted.
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(h) Certain Dispositions of Common Stock. The Holder agrees to
notify the Company in writing immediately after the Holder transfers any shares
of Common Stock issued pursuant to the exercise of this Warrant, if such
transfer occurs on or before the later of (a) the date two years after the
Effective Date, or (b) the date one year after the date of transfer to the
Holder of shares of Common Stock issued pursuant to the exercise of this
Warrant. The Holder also agrees to provide the Company with any information
concerning any such transfer required by the Company for tax purposes.
DIGITAL TELEVISION SERVICES, INC.
By: ________________________________
Its:________________________________
Attest:
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