Exhibit 10.4
FORM OF
DIRECTOR STOCK OPTION AGREEMENT
XXXXXXX ENTERTAINMENT COMPANY
1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN
This DIRECTOR STOCK OPTION AGREEMENT (the "Agreement") is between
Xxxxxxx Entertainment Company, a Delaware corporation (the "Company"), and
____________ (the Grantee"), a member of the Board of Directors of the Company
(the "Board"), under the Company's 1997 Omnibus Stock Option and Incentive Plan
(the "Plan").
Pursuant to Section 7 of the Plan, the Grantee has been awarded a
Nonqualified Stock Option on the terms and conditions set forth in the Plan and
this Agreement. In consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the parties hereto hereby agree
to the terms of this Agreement and of the Plan.
Section 1. Award of Options. This Agreement evidences the award to
Grantee of a Nonqualified Stock Option (the "Options") to purchase __________
shares of Common Stock at an exercise price of $____ per share, in accordance
with and pursuant to Section 7 of the Plan.
Section 2. Exercise of Option Rights.
2.1 Times When the Option Can Be Exercised. The Option shall vest as
follows: ______ shares shall vest on the first anniversary date hereof; _____
shares shall vest on the second anniversary date hereof; _____ shares shall vest
on the _____ anniversary date hereof and _____ shares shall vest on the fourth
anniversary date hereof.
2.2 Term of Option. The term during which the Option may be exercised
shall terminate on ___________, ____ years from the date that the Option was
initially awarded, subject to earlier termination as provided for in Section 3
of this Agreement.
2.3 Notice of Exercise. If the Grantee wishes to exercise his rights
hereunder, the Grantee must give notice of exercise to the Company at the
Company's principal office. The Grantee must give the notice in writing in form
satisfactory to the Compensation Committee of the Board (the "Committee"). The
Grantee must include with the notice full payment for any shares being purchased
under the Option (unless, in accordance with the Plan, the Committee shall have
provided otherwise), and any taxes due under Section 2.4.2 hereof.
2.4 Payment.
2.4.1 Payment for any Common Stock being purchased under the
Option must be made in cash, by certified or bank check, or by delivering to the
Company Common Stock which the Grantee already owns. If the Grantee pays by
delivering Common Stock of the Company, the Grantee must include with the notice
of exercise the certificates for the Common Stock duly endorsed for transfer.
The Company will value the Common Stock delivered by the Grantee at its Fair
Market Value as of the date of receipt as set forth in the Plan and, if the
value of the Common Stock delivered by the Grantee exceeds the amount required
under this Section 2.4.1 will return to the Grantee cash in an amount equal to
the value, so determined, of any fractional portion of a share
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of Common Stock exceeding the amount required and will issue a certificate for
any whole share of Common Stock exceeding the amount required.
2.4.2 The Grantee cannot buy any Common Stock under the Option
unless, at the time the Grantee gives notice of exercise to the Company, the
Grantee includes with such notice payment in cash or by certified or bank check
of all local, state, or federal withholding taxes due, if any, on account of
buying Common Stock under the Option or gives other assurances to the Company
satisfactory to the Committee of the payment of those withholding taxes.
2.5 Transfer.
2.5.1 The Company shall deliver certificates for Common Stock
bought under the Option as soon as practicable after receiving payment for the
Common Stock and for any taxes under Section 2.4.2 hereof, and all documents
required under the Plan and this Agreement. The certificates will be made out in
the name of the Grantee.
2.5.2 If the Plan or any law, regulation, or interpretation
requires the Company to take any action regarding the Common Stock before the
Company issues certificates for the Common Stock being purchased, the Company
may delay delivering the certificates for the Common Stock for the period
necessary to take that action.
Section 3. Termination.
3.1 Generally. Except as otherwise provided in this Agreement and the
Plan, the Option may not be exercised unless the Grantee is then serving as a
member of the Board of Directors of the Company. In the event that Grantee shall
cease to serve as a member of the Board (other than by reason of death,
Disability, Retirement or for Cause) any portion of the Option that is
exercisable may be exercised by Grantee within 90 days from the date of such
termination or until the expiration of the stated term of the Option, whichever
period is shorter.
3.2 Death or Disability. If the Grantee dies while serving as a member
of the Board (or within the period of extended exercisability provided herein),
or if the Grantee's services terminates by reason of Disability the Option will
become fully vested and exercisable (notwithstanding the provisions of Section
2.1 hereof), and may be exercised by the Grantee, by the legal representative of
the Grantee's estate, or by the legatee under the Grantee's will at any time
following six months from the date the Option was initially awarded and until
the expiration of the term of the Option provided in Section 2.2 hereof.
3.3 Retirement. If the Grantee's service on the Board terminates by
reason of Retirement, any portion of the Option may be exercised by Grantee, to
the extent such portion was exercisable at the time of such Retirement or on
such accelerated basis as the Committee may determine at or after the date of
grant (but before the date of such Retirement) at any time until the expiration
of the term of the Option provided in Section 2.2 hereof.
3.4 Committee Discretion. Notwithstanding the provisions of subsections
3.1 through 3.3 above, the Committee may, in its sole discretion, at or after
the date of grant (but before the date of termination), establish different
terms and conditions pertaining to the effect on any Option of termination of a
Grantee's service as a member of the Board of Directors, to the extent permitted
by applicable federal and state law.
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Section 4. Governing Provisions. This Agreement is made pursuant to
Section 7 of the Plan and, in general, under and subject to the provisions of
the Plan, and all of the provisions of the Plan are also provisions of this
Agreement. Capitalized terms used but not defined herein shall have the same
meanings ascribed to such terms in the Plan. If there is a difference or
conflict between the provisions of this Agreement and the provisions of the
Plan, the provisions of the Plan will govern. By signing this Agreement, the
Grantee confirms that he has received a copy of the Plan.
Section 5. Miscellaneous.
5.1 Entire Agreement. This Agreement and the Plan contain all of the
understandings between the Company and the Grantee concerning the Option granted
under the Plan, and include all earlier negotiations and understandings. The
Company and the Grantee have made no promises, agreements, conditions, or
understandings, either orally or in writing, that are not included in this
Agreement or the Plan.
5.2 Captions. The captions and section numbers appearing in this
Agreement are inserted only as a matter of convenience. They do not define,
limit, construe or describe the scope or intent of the provisions of this
Agreement.
5.3 Counterparts. This Agreement may be executed in counterparts, each
of which when signed by the Company and the Grantee will be deemed an original
and all of which together will be deemed the same Agreement.
5.4 Notice. Any notice or communication having to do with this
Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed if to the Company or the Committee, to the
principal office of the Company and, if to the Grantee, to the Grantee's last
known address on the personnel records of the company.
5.5 Amendment. This Agreement may be amended by the Company, provided
that unless the Grantee consents in writing, the Company cannot amend this
Agreement if the amendment will materially change or impair the Grantee's rights
under this Agreement and such change is not to the Grantee's benefit.
5.6 Succession and Transfer. Each and all of the provisions of this
Agreement are binding upon and inure to the benefit of the Company and the
Grantee and their heirs, successors and assigns; however, neither the Option nor
this Agreement is transferable otherwise than by will or by the laws of descent
and distribution.
5.7 Governing Law. This Agreement shall be governed and construed
exclusively in accordance with the law of the State of Delaware applicable to
agreements to be performed in the State of Delaware to the extent it may apply.
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The Company and the Grantee have caused this Agreement to be signed and
delivered as of the ___ day of ___________, _____.
XXXXXXX ENTERTAINMENT COMPANY
By:
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Xxxxxx X. Xxxx, Senior Vice President
By:
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Grantee
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