EXHIBIT 10.34
NONQUALIFIED STOCK OPTION AGREEMENT
FOR CORPORATE OFFICERS
AGREEMENT made the 10th day of September 1997 (the "Grant
Date") between Telemundo Group, Inc., a Delaware corporation (the "Company"),
and Xxxxxxx X. Xxxxxx (the "Optionee").
WHEREAS, the Company has adopted the 1994 Stock Plan, as the
same may be amended from time to time (the "Plan") in order to provide
additional incentive to certain officers and employees of the Company and its
Subsidiaries;
WHEREAS, the Optionee has entered into an employment
agreement, dated as of September 10, 1997, with the Company (the "Employment
Agreement"); and
WHEREAS, the Committee responsible for administration of the
Plan has determined to grant an option to the Optionee as provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF OPTION.
1.1 This Agreement shall be construed in accordance and
consistent with, and subject to, the provisions of the Plan (the provisions of
which are incorporated herein by reference) and, except as otherwise expressly
set forth herein, the capitalized terms used in this Agreement shall have the
same definitions as set forth in the Plan.
1.2 The Company hereby grants to the Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of 10,000
whole shares of Stock (the "Option Shares") subject to, and in accordance with,
the terms and conditions set forth in this Agreement.
1.3 The Option is not intended to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code.
2. PURCHASE PRICE.
The price at which the Optionee shall be entitled to purchase shares of
Stock upon the exercise of the Option shall be $33.75 per share.
3. DURATION OF OPTION.
Except as otherwise provided in this Agreement or the Plan, the Option
shall be exercisable to the extent and in the manner provided herein for a
period of ten years from the Grant Date (the "Exercise Term"); PROVIDED,
HOWEVER, that the Option may be earlier terminated as provided in Section 7
hereof.
4. COMPENSATION COMMITTEE.
The Company represents and warrants to the Optionee that this Agreement
has been approved by the Committee.
5. VESTING AND EXERCISABILITY OF OPTION.
5.1 Unless otherwise provided in this Agreement or the Plan,
the Option shall entitle the Optionee, in whole at any time or in part from time
to time, to exercise the Option for shares of Stock to the extent the Option has
become "vested."
5.2 The Option shall "vest" and become exercisable as to 3,334
of the Option Shares on September 10, 1998 and the Option shall "vest" and
become exercisable as to 3,333 of the Option Shares on each of September 10,
1999 and September 10, 2000, in each case if, but only if, Optionee is employed
with the Company on each applicable vesting date.
5.3 In addition, to the extent the Option shall not have
previously "vested" and become exercisable pursuant to Sections 5.2 or 7.3, all
of the Option Shares which have not previously "vested" pursuant to such
provisions, shall become "vested" and exercisable immediately prior to the time
at which a "Change of Control Transaction" occurs if, but only if, the Optionee
is employed with the Company immediately prior to the occurrence of such Change
of Control Transaction. A "Change of Control Transaction" means any one or more
of the following events: (A) an event or series of events after the date of this
Agreement as a result of which any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) who did not own at least
500,000 shares of the Company's Series B Common Stock on September 1, 1997
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of more than 50% of the aggregate voting power of
all of the capital stock of the Company normally entitled to vote in the
election of directors or (B) a sale, transfer, conveyance or other disposition,
directly or indirectly, in any single transaction or series of related
transactions, no matter how accomplished, which results in more than 50%, in
value, of (1) the capital stock (or other equity interest in) or operating
assets of Telemundo Network, Inc., a wholly-owned subsidiary of the Company or
(2) the aggregate capital stock (or other equity interest in) or operating
assets of all of the Company's subsidiaries (other than Telemundo Network,
Inc.), which currently comprise the Company's owned and operated station group
(including any special purpose license subsidiaries), being owned (which term
shall include "beneficial ownership" within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, by any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act) who did not own at
least 500,000 shares of the Company's Series B Common Stock on September 1, 1997
or (C) a transaction or series of related transactions leading to at least an
80% reduction in the number of outstanding shares of Stock held by "unaffiliated
persons" (meaning any person other than Xxxxxxxxx Partners, Apollo Partners,
L.P. or Bastion Capital Fund, L.P. or any of their respective affiliates (as
this term is defined in Rule 12b-2 under the Exchange Act) on the date of this
Agreement.
5.4 In the event of a subdivision or combination of the
outstanding shares of Stock (whether by stock split, stock dividend, reverse
stock split or otherwise), the per share prices specified in Section 5.3 shall
be proportionately adjusted.
6. MANNER OF EXERCISE AND PAYMENt.
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6.1 Subject to the terms and conditions of this Agreement and
the Plan, the Option may be exercised by delivery of written notice to the
Company at its principal executive office. Such notice shall state that the
Optionee is electing to exercise the Option and the number of shares of Stock in
respect of which the Option is being exercised and shall be signed by the person
or persons exercising the Option. If requested by the Committee, such person or
persons shall (i) deliver this Agreement to the Secretary of the Company who
shall endorse thereon a notation of such exercise and (ii) provide satisfactory
proof as to the right of such person or persons to exercise the Option.
6.2 The notice, of exercise described in Section 6.1 shall be
accompanied by the full purchase price for the shares of Stock in respect of
which the Option is being exercised and by the Withholding Taxes, in cash, by
check or, in the discretion of the Committee, by transferring shares of Stock to
the Company held by the Optionee for more than six months and having a Fair
Market Value on the day preceding the day of exercise equal to the cash amount
for which such shares of Stock are substituted. Notwithstanding the preceding
sentence, the parties agree that, to the extent permitted by law, and to the
extent it would not, in the Company's judgment, result in any adverse legal,
financial or tax implications for the Company, it is their intention that
Optionee be able to effect a simultaneous exercise of this Option and sale of
shares of Stock issuable upon such exercise in the over-the-counter market or
any securities exchange on which the Stock is then listed, without Optionee
bearing any commission or brokerage expense (a "concurrent transaction"). To
this end, the Company and Optionee shall jointly agree upon a securities broker
to be used in such transactions and further to adopt such additional procedures
as may be necessary or advisable to accomplish concurrent transactions. In any
concurrent transaction, the Company shall not be required to deliver a share
certificate upon exercise of this Option unless it receives concurrent payment
of the exercise price and Withholding Taxes. The Company shall bear all
commission and brokerage expense associated with concurrent transactions, which
shall be treated as an adjustment in the purchase price of shares subject to
this Option.
6.3 Upon receipt of notice of exercise and full payment for
the shares of Stock in respect of which the Option is being exercised and of the
Withholding Taxes, the Company shall, subject to Section 14 of the Plan,
promptly take such action as may be necessary to effect the transfer to the
Optionee of the number of shares of Stock as to which such exercise was
effective, including issuing and delivering such shares of Stock and entering
the Optionee's name as a stockholder of record on the books of the Company
provided, that full payment of the exercise price and Withholding Taxes may be
made concurrently with such transfer and delivery in the case of a concurrent
transaction provided for in Section 6.2.
6.4 The Optionee shall not be deemed to be the holder of, or
to have any of the rights of a holder with respect, to any shares of Stock
subject to the option until (i) the Option shall have been exercised pursuant to
the terms of this Agreement and the Optionee shall have paid the full purchase
price for the number of shares of Stock in respect of which the Option was
exercised, (ii) the Company shall have issued and delivered the shares of Stock
to the Optionee, and (iii) the Optionee's name shall have been entered as a
stockholder of record on the books of the Company, whereupon the Optionee shall
have full voting and other ownership rights with respect to such shares.
7. TERMINATION OF EMPLOYMENT.
7.1 TERMINATION UNDER SECTION 9(A) OF EMPLOYMENT AGREEMENT. If
the employment of the Optionee is terminated pursuant to Section 9(a) of the
Employment Agreement, the
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Optionee (or his personal representative) may at any time within one year after
such termination (but in no event after the expiration of the Exercise Term)
exercise the Option to the extent, but only to the extent, that the Option or
portion thereof was vested on the date of such termination and the remainder of
the Option, if any, shall terminate.
7.2 TERMINATION UNDER SECTION 9(B) OF EMPLOYMENT AGREEMENT. If
the employment of the Optionee is terminated for Cause or if the Optionee
resigns from his employment pursuant to a resignation that is without Good
Reason, in either case as provided in Section 9(b) of the Employment Agreement,
as finally determined pursuant to the provisions of said Section 9(b), the
Optionee (or his personal representative) may at any time within one year after
such termination or resignation (but in no event after the expiration of the
Exercise Term) exercise the Option to the extent, but only to the extent, that
the Option or portion thereof was vested on the date of such termination or
resignation and, subject to Section 7.3, the remainder of the Option, if any,
shall terminate.
7.3 TERMINATION UNDER SECTIONS 9(C) OR 9(D) OF THE EMPLOYMENT
AGREEMENT. If the Optionee's employment is terminated pursuant to Section 9(c)
or 9(d) of the Employment Agreement, the Option, to the extent it has not vested
with respect to any Option Shares, shall immediately vest and become
exercisable. The Optionee may at any time within one year after the date of such
termination of employment (but in no event after the expiration of the Exercise
Term) exercise any or all of the Option to the extent not previously exercised.
8. NON-TRANSFERABILITY.
The Option shall not be transferable other than by will or by the laws
of descent and distribution. During the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee.
9. NO RIGHT TO CONTINUED EMPLOYMENT.
Nothing in this Agreement or the Plan shall be interpreted or construed
to confer upon the Optionee any right with respect to continuance of employment
by the Company, nor shall this Agreement or the Plan interfere in any way with
the right of the Company to terminate the Optionee's employment at any time,
subject to all terms and conditions of the Employment Agreement.
10. ADJUSTMENTS.
In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments to the number and class of
shares of Stock subject to the Option and the purchase price for such shares of
Stock. The Committee's adjustment shall be made in accordance with the
provisions of Section 4.5 of the Plan and shall be effective and final, binding
and conclusive for all purposes of the Plan and this Agreement. Notwithstanding
either of the preceding two sentences, the vesting and exercisability provisions
in Sections 5 and 7.3 and the rights of the Optionee under Section 11 shall not
be adversely affected by any Change in Capitalization.
11. CERTAIN EVENTS.
Except as otherwise expressly provided herein, upon the effective date
of (i) the liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the
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Option shall continue in effect in accordance with its terms and the Optionee
shall be entitled to receive in respect of all shares of Stock subject to the
Option, upon exercise of the Option, the same number and kind of stock,
securities, cash, property or other consideration that each holder of shares of
Stock was entitled to receive in the Transaction. In addition, if circumstances
are such that unvested remaining Option Shares would vest under more than one
provision of this Agreement, the Optionee shall have the right to select the
provision under which the vesting occurs.
12. WITHHOLDING OF TAXES.
At such times as an Optionee recognizes taxable income in connection
with the receipt of shares of Stock, securities, cash or property hereunder (a
"Taxable Event"), the Optionee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Company in connection with the Taxable Event (the
"Withholding Taxes") prior to the issuance, or release from escrow, of such
shares of Stock or securities or the payment of such cash or such property. The
Company shall have the right to deduct from any payment of cash to an Optionee
or Grantee an amount equal to the Withholding Taxes in satisfaction of the
obligation to pay Withholding Taxes. In satisfaction of the obligation to pay
Withholding Taxes to the Company, the Optionee may make a written election (the
"Tax Election"), which may be accepted or rejected in the discretion of the
Committee, to have withheld a portion of the shares then issuable to him having
an aggregate Fair Market Value, on the date preceding the date of such issuance,
equal to the Withholding Taxes.
13. OPTIONEE BOUND BY THE PLAN.
The Optionee hereby acknowledges receipt of a copy of the Plan as in
effect on the date hereof and agrees to be bound by all the terms and provisions
of the Plan.
14. MODIFICATION OF AGREEMENT.
This Agreement may be modified, amended, suspended or terminated, and
any terms or conditions may be waived, but only by a written instrument executed
by the parties hereto.
15. SEVERABILITY.
Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
16. GOVERNING LAW.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without giving
effect to the conflicts of laws principles thereof.
17. SUCCESSORS IN INTEREST.
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This Agreement shall inure to the benefit of and be binding upon any
successor to the Company. This Agreement shall inure to the benefit of the
Optionee's legal representatives. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee's heirs, executors, administrators and
successors.
18. RESOLUTION OF DISPUTES.
Any dispute or disagreement which may arise under, or as a result of,
or in any way relate to, the interpretation, construction or application of this
Agreement shall be determined by binding arbitration. The parties may agree to
submit the matter to a single arbitrator or to several arbitrators, may require
that arbitrators possess special qualifications or expertise or may agree to
submit a matter to a mutually acceptable firm of experts for decision. In the
event the parties shall fail to thus agree upon terms of arbitration within
twenty (20) days from the first written demand for arbitration, then such
disputed matter shall be settled by arbitration under the Rules of Employment
Arbitration of the American Arbitration Association, by three arbitrators
appointed in accordance with such Rules. Such arbitration shall be held in
Miami, Florida. Once a matter has been submitted to arbitration pursuant to this
section, the decision of the arbitrators reached and promulgated as a result
thereof shall be final and binding upon all parties. The cost of arbitration
shall be shared equally by the parties and each party shall pay the expenses of
his/its attorneys, except that the arbitrators shall be entitled to award the
costs of arbitration, attorneys and accountants' fees, as well as costs, to the
party that they determine to be the prevailing party in any such arbitration.
19. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(SIGNATURE PAGE FOLLOWS)
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TELEMUNDO GROUP, INC.
By: /S/ XXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Compensation
Committee
/S/ XXXXXXX X. XXXXXX
------------------------
Xxxxxxx X. Xxxxxx
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