YOUTHSTREAM MEDIA NETWORKS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
September 26, 2000
Youthstream Media Networks, Inc., a Delaware corporation with its principal
office at 000 Xxxxx Xxxxxx, Xxx Xxxx, X.X. 00000 (the "Company"), hereby grants
to Xxxxx X. Xxxxxxxx, residing at 00 Xxxx 00xx Xxxxxx, Xxx. 00X, Xxx Xxxx, X.X.
00000 (the "Executive"), pursuant to the employment agreement dated June 20,
2000 between the Company and the Executive (the "Employment Agreement"), an
option under the Company's 2000 Stock Incentive Plan (the "Plan") to purchase up
to 300,000 shares of the Company's common stock, par value $.01 per share, at
the price of $3.75 per share, on the terms and conditions set forth in this
agreement and in the Plan. Defined terms in the Plan mean the same in this
agreement.
The Company and the Executive intend this not to be an incentive stock
option within the meaning of section 422 of the Internal Revenue Code.
1. Vesting
(a) This option shall become exercisable (i.e., shall vest) with respect to
37,500 shares on the last day of each calendar quarter beginning September 30,
2000 provided that the Executive is employed by the Company or any Affiliate on
that date. To the extent this option is not vested at the time of termination of
the Executive's employment by the Company and its Affiliates, upon termination
of the Executive's employment the option shall be non-exercisable and shall be
canceled. There shall be no proportionate or partial vesting in the periods
prior to each vesting date and all vesting shall occur only on the appropriate
vesting date. This option shall expire on, and may not be exercised after, June
1, 2010 ("Termination Date").
(b) Notwithstanding the provisions of section 1(a), if the Executive's
employment is terminated by the Company prior to June 30, 2002 for any reason
other than for cause or as a result of the Executive's death or disability, or
if the Executive's employment is terminated by him prior to June 30, 2002 for
Good Reason (the terms "cause" and "Good Reason" being defined in the Employment
Agreement), the option
shall then be deemed fully vested and may be exercised on and after the date of
termination of employment (until expiration of the time for exercise of the
option as provided in section 2(a)) for all of the 300,000 shares subject to the
option.
2. Exercise.
(a) This option shall be exercisable (to the extent vested) during the
continuance of the Executive's employment and shall be exercisable after
termination of the Executive's employment only as follows:
(i) if the Executive's employment by the Company and its Affiliates
terminates by reason of his disability, this option may be exercised by
him, to the extent that it was exercisable at the date of termination of
employment, within one year after the date of termination of employment,
but not later than the Termination Date;
(ii) if the Executive dies during his employment, this option may be
exercised (by the person or persons to whom his rights under this option
pass by his will or by the laws of descent and distribution) at any time
within one year after the date of his death, but not later than the
Termination Date, for that number of shares that the Executive was entitled
to purchase at the time of his death;
(iii) if the Executive's employment by the Company and its Affiliates
is terminated by the Company without cause or is terminated by the
Executive for Good Reason, this option may be exercised by him, to the
extent that it was exercisable at the date of termination of employment,
within ninety days after the date of termination of employment or within
two years after this date, whichever, is later, but not later than the
Termination Date;
(iv) if the Executive's employment by the Company and its Affiliates
is voluntarily terminated by the Executive other than for Good Reason this
option may be exercised by him, to the extent that it was exercisable at
the date of termination of employment, within thirty days after the date of
termination of employment, but not later than the Termination Date; and
(v) if the Executive's employment is terminated by the Company for
cause, this option and all rights under it, to the extent those rights have
not been exercised, shall thereupon terminate. The determination by the
Company's board of directors of the reason for termination of the
Executive's employment shall be binding and conclusive on the Executive.
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(b) This option may be exercised, in whole or in part, at any time or from
time to time prior to expiration of the time for exercise of the option as
provided in section 2(a). The option may be exercised only in accordance with
the procedure specified in section 6.3(d) of the Plan. If a registration
statement under the Securities Act of 1933 is not then in effect with respect to
the shares subject to the option, upon exercise of the option the Executive must
furnish the Company with such representations and agreements as the Company may
require to prevent disposition of the shares in violation of the Securities Act
of 1933; in that event, the Company may place upon any stock certificate an
appropriate legend referring to the restriction on disposition under the
Securities Act of 1933.
3. Restriction on Transfer of Option. Except as otherwise provided below,
this option may not be transferred other than by will or by the laws of descent
and distribution and, during the lifetime of the Executive, may be exercised
only by him. In addition, this option may not be assigned, negotiated, pledged
or hypothecated in any way and shall not be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the option or in the event of any levy upon the option by reason of
any execution, attachment or similar process contrary to the provisions of this
option agreement and the Plan, the option shall immediately become null and
void.
4. Certain Rights Not Conferred by Option.
(a) Nothing in this agreement or in the Plan shall (i) give the Executive
any right to continue in the employ of the Company or any Affiliate or interfere
in any way with the right of the Company or any Affiliate to terminate the
Executive's employment at any time, (ii) limit the right of the Company's board
of directors to manage the Company's business and affairs (including the
authorization of the issuance of additional shares and the determination of the
nature and amount of liabilities and obligations incurred by the Company or its
Affiliates) without regard for the effect of any action upon the Executive or
upon the value of the shares subject to, or acquired upon exercise of, this
option, or (iii) give the Executive any claim against the Company or any of its
officers or directors with respect to any action or omission relating to the
Company's business or affairs, whether or not that action or omission affects
the value of the shares subject to, or acquired upon exercise of, this option.
(b) The Executive shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company. The Executive shall not be
considered a record holder of any shares purchased upon exercise of the option
until the date on which he is actually recorded as a holder of the shares upon
the Company's stock records.
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5. Expenses. The Company shall pay all fees and expenses necessarily
incurred by the Company in connection with the issuance of the Company's shares
pursuant to this option. If the Company shall be required to withhold any
amounts by reason of any federal, state or local tax rules or regulations in
respect of the issuance of shares pursuant to the exercise of this option, the
Executive shall make available to the Company sufficient funds to meet the
withholding requirements and the Company shall be entitled to take and authorize
any steps it deems advisable in order to have those funds made available to the
Company out of any funds or property due or to become due to the Executive.
6. Acceptance of Provisions of Plan. This agreement is subject to all of
the provisions of the Plan, and the Executive agrees to, and shall be bound by,
all of the terms and conditions of the Plan. The Executive acknowledges having
received and read a copy of the Plan
7. Notices. Any notice or other communication under this agreement shall be
in writing and shall be considered given when delivered personally or three days
after being mailed by registered mail, return receipt requested, to the parties
at their respective addresses set forth above (or at such address as a party may
specify by notice to the other). Any notice to the Company shall be addressed to
the attention of the Company's Chief Financial Officer.
8. Complete Agreement; Governing Law; Amendment. This agreement, the
Employment Agreement and the Plan contain a complete statement of all of the
arrangements between the parties with respect to their subject matter. This
agreement shall be governed by and construed in accordance with the law of the
State of New York applicable to agreements made and to be performed in New York
and cannot be changed or terminated orally.
9. Headings. The headings in this agreement are solely for convenience of
reference and shall not affect its interpretation.
Youthstream Media Networks, Inc.
By: /s/ XXXXXX XXXXX
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AGREED:
/s/ XXXXX X. XXXXXXXX
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