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EXHIBIT 10.50
FORM OF OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of the 19th day of June,
1997, by and between SHOP AT HOME, INC. (the "Company"), a Tennessee
corporation, and [EXECUTIVE];
WHEREAS, the Company engages in the business of retail sales of
merchandise by sales presentations broadcast directly to potential customers by
cable and satellite television transmissions commonly known as the "shop at home
business";
WHEREAS, [Executive] is a director of the Company and the Company
wishes to provide a mechanism to recognize [Executive's] continued service to
the Company as a director;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Stock Options. The Company will grant to [Executive] a non-qualified
(as defined by the Internal Revenue Code) option to purchase up to 10,000 shares
of the Company's Common Stock, $.0025 par value, at an exercise price of $2.875
per share, expiring five (5) years from the date of this Agreement. Such option
shall be in the form of Exhibit A hereto.
2. Miscellaneous.
2.1 Legend on Certificate. Each certificate evidencing any of
the shares required by [Executive] pursuant to the Option shall be endorsed as
follows:
The shares evidenced by this certificate have not
been registered under the Securities Act of 1993, as amended,
or under the securities laws of any state. The shares may not
be sold, transferred, pledged or hypothecated in the absence
of any effective registration statement under the Securities
Act of 1933, as amended, and such registration or
qualification, as may be necessary under the securities laws
of any state, or an opinion of counsel satisfactory to the
Corporation that such registration or qualification is not
required.
2.2 Hold Harmless. [Executive] and the Company covenant and
agree that they will indemnify and hold harmless the other from (i) any and all
losses, damages, liabilities, expenses or claims resulting from or arising out
of any nonfulfillment by the defaulting party of any material provision of this
Agreement, and (ii) any and all losses or damages resulting from the defaulting
party's malfeasance or gross negligence.
3. Assignment. This Agreement shall be binding and shall inure to the
benefit of the Company and its successors and assigns and to [Executive] and his
heirs and assigns.
4. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or mailed, first class, certified mail, postage
prepaid:
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To Company:
Shop At Home, Inc.
0000 Xxxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxxx 00000
To [Executive]:
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5. Amendments and Modifications. This Agreement may be amended or
modified only by a writing signed by both parties hereto.
6. Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same instrument.
7. Headings. The headings set out in this Agreement are for convenience
of reference and shall not be deemed a part of this Agreement and shall not
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
SHOP AT HOME, INC.
By:
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Xxxx X. Xxxxxx
President and
Chief Executive Officer
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EXHIBIT A
SHOP AT HOME, INC.
1997 $2.875 COMMON STOCK PURCHASE OPTION
1. GENERAL PROVISIONS. Shop At Home, Inc., a Tennessee corporation
(herein called the "Corporation"), for value received, and other good and
valuable consideration, receipt of which is hereby acknowledged, hereby
certifies that [EXECUTIVE] or his registered assigns (herein called the "Option
Holder") is entitled to purchase shares of the fully paid and voting
nonassessable Common Stock, $.0025 par value per share, of the Corporation (such
number and character of such shares being subject to adjustment as provided in
paragraph 4 below), at Exercise Price Per Share set forth herein by surrendering
this Option with the Subscription Form attached hereto as EXHIBIT 1 duly
executed, at the offices of the Corporation, and by paying in full the Exercise
Price Per Share for the number of shares of Common Stock as to which this Option
is exercised. No fractional shares shall be issued hereunder, and instead, any
fractional shares created by exercise hereunder shall be purchased by the
Corporation at the rate of the Exercise Price Per Share then in effect.
2. EXERCISE PERIOD. This Option may be exercised by the Option Holder
at any time after its issuance and shall expire and all rights hereunder shall
cease on June 18, 2002.
3. NUMBER OF SHARES COVERED BY OPTION; EXERCISE PRICE. The number of
shares of the Corporation's Common Stock, $.0025 par value per share, for which
this Option may be exercised shall be 10,000 voting, common shares, subject to
adjustment as provided in paragraph 4 below, which may be purchased as a whole
at any time or in part from time to time subject to paragraph 4, below, within
the time limit herein specified. The price per share for the shares purchased
upon exercise of this Option shall be $2.875 per share, subject to adjustment as
provided in paragraph 4, below (the "Exercise Price Per Share").
4. ADJUSTMENTS IN NUMBER OF SHARES AND EXERCISE PRICE. If at any time
after this Option is granted, the Corporation shall declare or pay a dividend or
dividends payable in shares of its Common Stock (or any security convertible
into or granting rights to purchase shares or such Common Stock) or split the
then outstanding shares of its Common Stock into a greater number of shares, the
number of shares of Common Stock which may be purchased upon the exercise of
this Option in effect at the time of taking of a record for such dividend or at
the time of such stock split shall be proportionately increased and the Exercise
Price Per Share proportionately decreased as of such time; and conversely, if at
any time the Corporation shall contract the number of outstanding shares of its
Common Stock by combining such shares into a smaller number of shares, the
number of shares which may be purchased upon the exercise of this Option at the
time of such action shall be proportionately decreased and the Exercise Price
Per Share proportionately increased as of such time. If the Corporation declares
or pays a dividend or makes a distribution on shares of its Common Stock payable
otherwise than out of earnings or earned surplus, then thereafter the Option
Holder, upon the exercise hereof, will be entitled to receive the number of
shares of Common Stock to be received upon exercise of this Option determined as
stated above and, in addition and without further payment, the cash, stock or
other securities and other property which the Option Holder would have received
by way of dividends and distributions (otherwise than out of such earnings or
surplus) as if the Option Holder (i) has exercised this Option immediately prior
to the declaration of such dividend or the making of such distribution so as to
be entitled thereto, and (ii) had retained all dividends in stock or securities
payable in respect of such Common Stock or in respect of any stock or
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securities paid as dividends and distributions and originating directly or
indirectly from such Common Stock. For the purposes of the foregoing a dividend
other than in cash shall be considered payable out of earnings or earned surplus
only to the extent that such earnings or surplus are charged an amount equal to
the fair value of such dividend.
Appropriate and similar adjustment of the number of shares which may be
purchased upon the exercise of this Option and of the Exercise Price Per Share
shall also be made in the event of any other capital adjustment,
recapitalization, reorganization, reclassification or any consolidation of the
Corporation with, or a merger of the Corporation into, any other corporation, or
a sale, lease or other transfer of all or substantially all of the assets of the
Corporation, or a distribution by the Corporation of its assets with respect to
its Common Stock as a liquidating or partial liquidating dividend, or the
happening of any similar event affecting the Common Stock. In any such event,
the Option Holder shall have the right thereafter to exercise this Option for
the acquisition of any kind and amount of shares of stock and other securities
and property to which the Option Holder would have been entitled if the Option
Holder had purchased Common Stock of the Corporation by the full exercise of
this Option immediately prior to such capital adjustment, recapitalization,
reorganization, reclassification, consolidation, merger, sale, lease, transfer,
distribution or other similar event and the Corporation shall make lawful
provision therefor as a part of such event. The Corporation shall not effect any
such consolidation, merger, sale, lease or similar transfer involving another
corporation unless, upon or prior to the consummation thereof, the successor
corporation or the corporation to which the property of the Corporation has been
consolidated, merger, sold, leased or otherwise transferred shall assume by
written instrument the obligation to deliver to the Option Holder such shares of
stock, securities, cash or property as in accordance with the foregoing
provisions of the Option Holder shall be entitled to receive.
5. RESERVATION OF SHARES. The Corporation shall at all times reserve
and keep available a number of its authorized but unissued shares of its Common
Stock sufficient to permit the exercise in full of this Option.
6. SALE OF OPTION OR SHARES. The shares to be issued hereunder have not
been registered under the Securities Act, or under the securities laws of any
state, and such shares to be issued hereunder, when issued, may not be sold,
transferred, pledged or hypothecated in the absence of an effective registration
statement for this Option, or the shares to be issued hereunder, as the case may
be, under the Securities Act, and such registration or qualification as may be
necessary under the securities laws of any state, or an opinion of counsel
satisfactory to the Corporation that such registration or qualification is not
required. The certificate or certificates evidencing all or any of the shares to
be issued hereunder shall bear the following legend:
The shares evidenced by this Certificate have not been registered under
the Securities Act of 1933, as amended, or under the securities laws of
any state. The shares may not be sold, transferred, pledged or
hypothecated in the absence of any effective registration statement
under the Securities Act of 1933, as amended, and such registration or
qualification as may be necessary under the securities laws of any
state, or an opinion of counsel satisfactory to the Corporation that
such registration or qualification is not required.
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This Option shall be registered on the books of the Corporation, which
shall be kept by it as its principal office for the purpose and shall be
transferable only on said books by the registered owner hereof in person or by
duly authorized attorney upon surrender of this Option properly endorsed, and
only in compliance with the provision of the preceding paragraph. In case of the
exercise hereof in part only, the Corporation will deliver the Option Holder a
new Option of like tenor in the name of the Option Holder evidencing the right
to purchase the number of shares as to which this Option has not been exercised.
7. GOVERNING LAW. This Option is to be construed and enforced in
accordance with and governed by the laws of the State of Tennessee.
IN WITNESS WHEREOF, the Corporation has caused this Option to be issued
in its corporate name by its duly appointed officer.
DATED: June 19, 1997
SHOP AT HOME, INC.
By:
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Xxxx X. Xxxxxx
President and
Chief Executive Officer
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EXHIBIT 1
The undersigned optionee under that certain 1997 $2.875 Common Stock
Purchase Option (the "Agreement"), hereby exercises the Option granted under the
Agreement for the following number of shares of Common Stock, subject to the
terms and conditions of the Agreement:
Number of shares purchased
---------------
Total purchased price $
submitted herewith ---------------
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(Signature)
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(Date)
