EXHIBIT 4.12
THE TRANSFER OF THE OPTION EVIDENCED BY THIS AGREEMENT
IS SUBJECT TO RESTRICTIONS CONTAINED HEREIN. THE OPTION
HAS BEEN ISSUED IN RELIANCE UPON THE REPRESENTATION OF
THE HOLDER THAT IT HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TOWARDS THE RESALE OR OTHER DISTRIBUTION
THEREOF. NEITHER THE OPTION NOR THE SHARES ISSUABLE UPON
THE EXERCISE OF THE OPTION HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933.
THIS OPTION, AND THE OPTION SHARES ISSUABLE UPON EXERCISE
IN ACCORDANCE WITH THE TERMS CONTAINED HEREIN, ARE SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER AND A LIEN IN FAVOR OF KING
WORLD PRODUCTIONS, INC. (THE "COMPANY") TO SECURE CERTAIN
OBLIGATIONS OF HARPO, INC. ("HARPO") TO THE COMPANY PURSUANT TO
AN AGREEMENT DATED AS OF JANUARY 30, 1987, AS AMENDED
THROUGH SEPTEMBER 16, 1998 BETWEEN THE COMPANY AND HARPO.
KING WORLD PRODUCTIONS, INC.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xx. Xxxxxx Xxxxxx As of September 16, 1998
c/o Harpo, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxx:
This is the stock option agreement referred to in the amendment dated
as of September 16, 1998 (the "1998 Amendment"), to the Agreement dated as of
January 30, 1987 (the "Original Agreement"), as previously amended including by
an amendment dated as of March 17, 1994 (the "1994 Amendment") (the original
Agreement, as amended to the date hereof, being herein called the "Harpo
Agreement") between Harpo, Inc. ("Harpo") and the undersigned (the "Company").
As partial consideration for Harpo to enter into the 1998 Amendment, and as an
inducement for you to render services with respect to the production of the Show
(as such term is defined in the 1994 Amendment), the Company hereby grants to
you an option (the "Option") to purchase fifty thousand (50,000) shares of the
Company's Common Stock, $.01 par value ("Common Stock"; such shares of Common
Stock, as the same may be adjusted as described in Section 6 below, being herein
referred to as the "Option Shares"). The terms and conditions of the Option are
set out below.
The Option will be treated as and shall constitute a "non-qualified
stock option" for Federal income tax purposes. The Option will not constitute or
be treated either by you or by the Company as an "incentive stock option" as
defined under Section 422(b) of the Internal Revenue Code of 1986, as amended
(the "Code").
1. Date of Grant. The Option is granted to you on the date hereof.
2. Termination of the Option. Your right to exercise the Option
(and to purchase the Option Shares) shall expire and terminate in all events on
(i) September 16, 2008, or (ii) such earlier date provided in Section 7 below.
3. Option Price. The purchase price to be paid upon the exercise of
the option (the "Option Price") will be $26 7/16 per Option Share.
4. Vesting Provisions -- Entitlement to Exercise the Option and
Purchase Option Shares. The Option shall be exercisable by you, in whole or
part, at any time prior to expiration and termination pursuant to Section 2
above.
5. Exercise of Option.
(a) To exercise the Option, you must deliver a completed copy of the
attached Option Exercise Form to the address indicated on the Form, specifying
the number of Option Shares being purchased as a result of such exercise,
together with payment of the full Option Price for the Option Shares being
purchased.
(b) Payment of the Option Price must be made in cash.
(c) In the event of any exercise of the Option, a certificate or
certificates representing the Option Shares so purchased, registered in your
name, shall be delivered to you within a reasonable time.
(d) You agree that Option Shares shall be held by you for investment
and may not be resold unless registered under the Securities Act of 1933, as
amended (the "Securities Act"), or an exemption from registration is available,
and that the Option Shares will bear a legend referring to such limitation, to
the restrictions on transfer of the Option Shares referred to elsewhere in this
Agreement and to any security interests encumbering the Option Shares.
6. Adjustments. If the total outstanding shares of Common Stock of
the Company shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation through reorganization, merger or consolidation,
recapitalization, stock split, combination or exchange of shares or declaration
of any dividends payable in stock or other corporate transaction, then the
number of Option Shares subject to the unexercised portion of the Option (and
the Option Price per share) shall be appropriately adjusted (to the nearest
possible full share) by the Board of Directors of the Company.
2
7. Default under the Harpo Agreement.
(a) In the event that you die, or the term of the Harpo Agreement
terminates for any other reason except a material breach by Harpo, then the
Option may be exercised by you or your estate only within the nine (9) month
period following your death or the termination of the term of the Harpo
Agreement.
(b) In the event that the term of the Harpo Agreement terminates by
reason of a material breach thereof by Harpo, then your right to exercise the
Option as to any and all Option Shares that have not theretofore been issued
shall terminate simultaneously with the termination of such term.
(c) In the event that the Company exercises its rights pursuant to
paragraph 17 or 18 of the Original Agreement and the term of the Harpo
Agreement is suspended, then your right to exercise the Option pursuant to
Section 4 hereof shall be suspended during the period that the term of the
Harpo Agreement is suspended.
(d) Notwithstanding any provision contained herein to the contrary, in
no event may the Option be exercised to any extent after September 16, 2008.
8. Representations.
(a) You represent and warrant that you are acquiring the Option and
the Option Shares for investment purposes only and not with a view towards the
public distribution thereof.
(b) You understand that neither the Options nor the Option Shares
have been registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration requirements thereof pursuant to
Section 4(2) of the Securities Act.
(c) You represent and warrant that (i) you have the financial ability
to bear the economic risk of investment in the Option and the Option Shares and
(ii) you, together with the financial advisers who have assisted you in
acquiring the Option, have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Option and the Option Shares and have had sufficient
opportunity to obtain, and have obtained, all information regarding the Company
as you have deemed relevant in order to evaluate the merits and risks of such
investment.
(d) You represent and warrant that you understand the Federal, state
and local income tax consequences of the granting of the Option to you, the
exercise of the Option and purchase of Option Shares, and the subsequent sale
or other disposition of any Option Shares.
3
9. Covenants of the Company. The Company will at all times reserve
and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of issue upon the exercise of the Option, such number of
shares of Common Stock as shall then be issuable upon the exercise of the
Option. The Company covenants that all Option Shares, when issued in accordance
with the terms hereof, shall be duly and validly issued, fully paid and
nonassessable. The Company will take all such action as may be necessary to
assure that all Option Shares may be so issued without violation of any
applicable law or regulation, or of any requirements of any national securities
exchange upon which the Common Stock of the Company may then be listed. The
Company will not take any action which results in any adjustment of the Option
Price if the total number of Option Shares issued and issuable after such
action would exceed the total number of shares of Common Stock then authorized
by the Company's Certificate of Incorporation. The Company has not granted and
will not grant any right of first refusal with respect to the Option Shares,
and there are no preemptive rights associated with such shares.
10. Required Registration.
(a) At any time you may by notice to the Company (the "Registration
Notice") request that it register for sale under the Securities Act, in the
manner specified in your Registration Notice, all or any portion of the Option
Shares that have been purchased, or will be purchased on or before the
effective date of such registration statement, or, provided that deferral of
the date of purchase to the closing date of sale of such shares in the manner
contemplated by the proposed registration will not disqualify the offering from
registration on Form S-3 (or any successor to such form), then on such closing
date pursuant to such exercise.
(b) Promptly following receipt of your Registration Notice, the
Company shall commence to prepare and, unless it elects to purchase all of the
Option Shares specified in such Registration Notice through the procedures
specified in Section 10(f) below, shall file a registration statement under the
Securities Act for the sale of the Option Shares specified in such Registration
Notice (less any shares to be purchased pursuant to Section 10(f) below) and
shall use its best efforts to cause such registration statement to become
effective and remain in effect for the Required Effective Period for public
sale in accordance with the method of disposition specified by you, provided,
however, that the Company shall not be required to file a "shelf" registration
except on Form S-3 (or any successor to such Form). The "Required Effective
Period" shall be the greater of (A) the 180-day period following the effective
date of such registration statement; and (B) unless the proposed plan of
distribution involves a firm commitment underwritten public offering, the
period required to dispose of all of the shares included in such registration
statement assuming the sale in each three-month period of the maximum number of
shares permitted to be sold under the limitations of Section 14 of this
Agreement. If such method of disposition shall be an underwritten public
offering, the Company may designate the managing underwriter of such offering.
If, in the good faith opinion of the Board of Directors of the Company,
registration would materially interfere with pre-existing contractual
obligations to which the Company is then subject or financing arrangements or
other material transactions involving the Company or any of its subsidiaries
are pending at the time the Registration Notice is given, or are under active
consideration by the Company, the Company may elect to defer registration for
4
such period of time, in no event in excess of one hundred twenty (120) days
from the date on which the Registration Notice was given, as in the good faith
judgment of the Board of Directors of the Company is necessary in order to
preclude adverse impact upon such financing or other transaction. In the event
of such deferral, if the shares to be registered are to be acquired on exercise
of this Option following the date of such Registration Notice, the date on
which the Option was exercised shall, for purposes of Section 2 and 7(d)
hereof, be deemed to be the date on which the Registration Notice was given.
The obligation of the Company under this Section 10 shall be deemed satisfied
only when a registration statement covering all Option Shares specified in your
Registration Notice and not purchased by the Company pursuant to Section 10(f)
below shall have become effective and, (X) if the method of disposition you
specify is a firm commitment underwritten public offering, all such Option
Shares shall have been sold pursuant thereto; or (Y) if it is not such an
offering, has remained in effect for the Required Effective Period specified
herein or until the distribution of the Option Shares covered thereby is
completed, whichever is shorter.
(c) The Company shall not be obligated to register Option Shares
pursuant to this Section 10 (i) more than once; or (ii) at any time when the
registration, offering or sale of Option Shares would violate any law, rule or
regulation.
(d) The Company shall be entitled to include in any registration
statement referred to in this Section 10, for sale in accordance with the
method of disposition you specify, shares of Common Stock to be sold by the
Company for its own account or by other security holders of the Company for
their accounts, or both, except as and to the extent that, in the opinion of
the managing underwriter (if such method of disposition shall be an
underwritten public offering), such inclusion would adversely affect the
marketing of the Option Shares to be sold.
(e) The procedures for registration of Option Shares under this
Section 10 shall conform to the following:
(1) Obligations of the Company. If and whenever the Company is
required by the provisions of Section 10 or 11 to effect the registration
of Option Shares, the Company will:
(i) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for the Required
Effective Period or until the securities covered by such registration
statement have been sold in accordance with the method of disposition
specified by you in your Registration Notice, whichever is shorter, and
prepare and file with the Commission such amendments or supplements to such
registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective for the
Required Effective Period or until the shares covered by such registration
statement have been sold in accordance with such method of disposition,
whichever is shorter;
5
(ii) If the offering is to be underwritten in whole or in part,
enter into a written underwriting agreement in form and substance
reasonably satisfactory to the managing underwriter or underwriters of the
public offering of such securities;
(iii) Furnish to the shareholders participating in such
registration and to the underwriters of the securities being registered
such reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters
may reasonably request in order to facilitate the public offering of such
securities;
(iv) Use its best efforts to register or qualify the shares
covered by such registration statement under such state securities or blue
sky laws of such jurisdictions as you may reasonably request within 20 days
following the original filing of such registration statement, except that
the Company shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(v) Notify you promptly after it shall receive notice thereof, of
the time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement
has been filed;
(vi) Notify you promptly of any request by the Commission for the
amending or supplementing of such registration statement or prospectus or
for additional information;
(vii) Prepare and file with the Commission, promptly upon your
request, any amendments or supplements to such registration statement or
prospectus which, in the opinion of your counsel, are required under the
Securities Act or the rules and regulations thereunder in connection with
the distribution of the Option Shares by you;
(viii) Prepare and promptly file with the Commission and promptly
notify you of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
shares is required to be delivered under the Securities Act, any event
shall have occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances in which they were
made, not misleading;
(ix) In case you or any underwriters for you is required to
deliver a prospectus at a time when the prospectus then in effect may no
longer be used under the Securities Act, prepare promptly upon request such
amendment or amendments to such registration statement and such prospectus
or prospectus as may be necessary to permit compliance with the
requirements of the Securities Act;
6
(x) Advise you, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement; or the
initiation or threatening of any proceeding for that purpose and promptly
use its best efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued;
(xi) If such registration is by way of an underwritten public
offering and if you so request, use its best efforts to cause counsel and
the independent certified public accountants to the Company to furnish on
the effective date of the registration statement and at the closing
provided for in the underwriting agreement, (i) an opinion dated such date,
of the counsel representing the Company for the purposes of such
registration, addressed to the underwriters, if any, and to you, covering
such matters with respect to the registration statement and prospectus and
each amendment or supplement thereto, proceedings under state and federal
securities laws and other matters relating to the Company, the securities
included in the registration statement and the offer and sale of such
securities as are customarily the subject of opinions of issuer's counsel
provided to underwriters at or about the time such registration statement
becomes effective and the sale is closed; and (ii) a letter dated each such
date, from the independent certified public accountants of the Company,
addressed to the underwriters, if any, and to you, stating that they are
independent certified public accountants within the meaning of the
Securities Act and providing such assurances as are customarily provided by
the independent certified public accountants for an issuer in connection
with the registration of securities, including information as to the period
ending not more than five business days prior to the date of such letter
with respect to the registration statement and prospectus, as the
underwriters or you may reasonably request. If the furnishing of such
opinion and/or letter causes Company to incur any additional cost or
expense you agree to reimburse Company therefor at the closing provided for
in the underwriting agreement.
(2) Obligations of Option Holder. It shall be a condition to the
inclusion of any Option Shares in a registration statement that the holder
thereof shall cooperate in the execution and filing of the registration
statement and any necessary state securities law filings, and if the
offering is to be underwritten, that such holder become a party to the
underwriting agreement and, if so requested by the managing underwriter,
execute and deliver Powers of Attorney and/or custodial agreements or other
suitable arrangements as the managing underwriter deems reasonably
necessary in order to insure orderly sale of the shares.
As among the holders of shares included in any registration statement,
decisions respecting the terms and conditions of any underwriting
agreements shall be made by the party initiating the registration; so that
in the case of a registration required pursuant to a request by you under
Section 10, determinations with respect to the underwriting agreement shall
be made by you, in your reasonable judgment, after appropriate consultation
with the Company and with other persons whose shares are to be included in
7
such offering; and if you are party to a registration statement pursuant to
Section 11, you shall not have the right to make such determinations, but
shall be informed of them, and consulted with respect thereto.
(f) Within ten (10) business days following receipt of a Registration
Notice, the Company may elect, by written notice to you, to purchase all or any
portion of the Option Shares specified by you in such Registration Notice for a
purchase price equal to the closing price of the Common Stock on the date such
notice was given. In the event that the Company elects to purchase any of the
Option Shares specified by you in such notice, the delivery of such Option
Shares against payment therefor shall take place on the fifth business day
following receipt by you of the Company's election notice. In the event that the
Company does not elect to purchase all of the Option Shares specified by you in
such Registration Notice, the Company shall register under the Securities Act
all the Option Shares not so purchased, in the manner provided above.
11. Incidental Registration. If the Company at any time proposes to
register any of its Common Stock under the Securities Act for sale to the public
pursuant to the exercise of a demand registration by any or all of Xxxxx
Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx Xxxxxxx or Xxxxxxx Xxxxxxxx, it will give
written notice at such time to you of its intention to do so. Upon your written
request, given within 30 days after receipt of any such notice by the Company,
to register any of the Option Shares that you have purchased, or will purchase
on or before the effective date of such registration statement, pursuant to the
exercise of the Option (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause such Option
Shares to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by you of the Option Shares so registered.
In the event that any registration pursuant to this Section 11 shall be, in
whole or in part, an underwritten public offering of Common Stock, any request
by you pursuant to this Section 11 to register Option Shares shall specify that
either (i) such Option Shares are to be included in the underwriting on the same
terms and conditions as the shares of Common Stock otherwise being sold through
underwriters under such registration; or (ii) such Option Shares are to be sold
in the open market without any underwriting, on terms and conditions comparable
to those normally applicable to offerings of common stock in reasonably similar
circumstances. The number of Option Shares to be included in such an
underwriting may be reduced if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the marketing
of the securities to be sold therein by the Company or other security holders of
the Company.
Notwithstanding anything to the contrary contained in this Section 11,
in the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration covering Option Shares and
you do not elect to sell any Option Shares to the underwriters of the Company's
securities in connection with such offering, you agree to refrain from selling
any Option Shares during the period of distribution of the Company's securities
by such underwriters and the period in which the underwriting syndicate
participates in the after market; provided, however, that you shall, in any
event, be entitled to sell Option Shares commencing on the 150th day after the
effective date of such registration statement.
8
12. Expenses.
(a) The expenses incurred by the Company in complying with all
registrations pursuant to Section 11 hereof shall be paid as follows:
(i) all registration and filing fees, printing expenses, fees and
disbursements of counsel and independent public accountants for the
Company, fees of the National Association of Securities Dealers, Inc.
and/or the New York Stock Exchange, transfer taxes, fees of transfer
agents and registrars, costs of insurance and other costs not described in
(ii) below shall be paid by the Company; and
(ii)fees and expenses of your counsel, and all underwriting
discounts and selling commissions applicable to the sale of Option Shares
sold by you, shall be paid by you.
13. Indemnification. In the event of a registration of Option
Shares under the Securities Act pursuant to Section 11 hereof, the Company will
indemnify and hold you harmless against any losses, claims, damages or
liabilities, joint or several, to which you may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Option Shares were registered under
the Securities Act pursuant to Section 11, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse you for any legal or other expenses
reasonably incurred in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing by you for inclusion in such
registration statement.
In the event of a registration of any of the Option Shares under the
Securities Act pursuant to Section 11 hereof, you will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer or director or underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
9
any material fact contained in the registration statement under which such
Option Shares were registered under the Securities Act pursuant to Section 11,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that you will be liable hereunder in
any such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information furnished to the Company by you in writing for
inclusion in such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified xxxxx other than under this Section 13. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 13 for
any legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
10
If the indemnification provided for in the first two paragraphs of
this Section 13 is unavailable or insufficient to hold harmless an indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
you, on the other, in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or actions as well as any other
relevant equitable considerations, including the failure to give any notice
under the third paragraph of this Section 13. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact relates to information supplied by the
Company, on the one hand, or you, on the other, and to the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and you agree that it would not be just
and equitable if contributions pursuant to this paragraph were determined by pro
rata allocation or by any other method of allocation which did not take account
of the equitable considerations referred to above in this paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or action in respect thereof, referred to above in this
paragraph, shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
The indemnification of underwriters provided for in this Section 13
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. Upon your reasonable request, or upon
the reasonable request of any underwriter of Option Shares, the Company shall
obtain, if reasonably available, an insurance policy covering the risks
described above in this Section 13 in an amount and with a deductible
reasonably requested by you or such underwriter and naming you, any underwriter
of such stock and any person controlling you or such underwriter as
beneficiaries. The costs of obtaining and maintaining any such insurance shall
be borne by the Company.
14. [Intentionally Left Blank]
15. Defaults. It shall constitute a breach of this Agreement by
either party if such party shall fail or refuse to fully perform any of its
obligations under this Agreement and shall not have cured such failure or
refusal within 30 days after receipt from the other party of written notice
advising it of such failure or refusal, or, in the event that such failure or
refusal is of a nature that cannot be cured within 30 days, then if such party
shall not begin to cure the same within such 30-day period and thereafter
diligently prosecute such cure to completion.
11
16. Successors; No Assignment. Each of the covenants, terms,
provisions and agreements contained herein shall be binding upon and inure to
the benefit of the parties, successors and assigns. Neither the Option, nor any
of the rights granted to you pursuant hereto, may be transferred or assigned
(including, without limitation, by operation of law), except by will or the laws
of descent and distribution.
17. Withholding Taxes. In the event that the Company is required to
withhold any Federal, state or local taxes in respect of the grant of the Option
or in respect of the acquisition of any Option Shares, the Company may deduct
from any payments of any kind otherwise due to you under the Harpo Agreement the
aggregate amount of such Federal, state or local taxes required to be so
withheld or, if such payments are insufficient to satisfy such Federal, state or
local taxes or if no such payments are due or to become due, then, you will be
required to pay to the Company, or to make other arrangements satisfactory to
the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
shall be determined by the Company in its sole discretion.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. If any one or more
provisions of this Agreement shall be found to be illegal or unenforceable in
any respect, the validity and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
Please acknowledge receipt of this Option Agreement and agreement with
the terms hereof by signing the enclosed copy of this Option Agreement in the
space provided below.
KING WORLD PRODUCTIONS, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
--------------------------------------
Xxxxxxxx Xxxxxxxx
Accepted and Agreed:
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
12
King World Productions, Inc.
OPTION EXERCISE FORM
Xxxxxx Xxxxxx hereby exercises her right to purchase ___________ shares of
Common Stock, $.01 par value, of King World Productions, Inc. pursuant to the
option granted to her on September 16, 1998, memorialized in the Option
Agreement, dated as of September 16, 1998, between her and King World
Productions, Inc.
Date:_______________________ -----------------------------------
Xxxxxx Xxxxxx
Send a completed copy of this Option Exercise Form to:
Vice President - Finance
King World Productions, Inc.
c/o King World Corporation
000 Xxxxxx Xxxxxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
