OPTION AGREEMENT
OPTION AGREEMENT, dated as of March 14, 1997, between, _____, a
Delaware corporation (the "Corporation") and _______ (the "Holder").
WHEREAS, the Corporation desires to grant to the Holder, the right
and option to purchase shares (the "Option Shares") of Class B Common Stock,
$.01 par value per share (the "Class B Stock"), of the Corporation, on the terms
and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. The Corporation hereby grants to the Holder an option (the
"Option") to purchase from the Corporation ______ Option Shares, at a purchase
price of $_____ per Option Share (the "Option Price"). The Holder's right and
option to purchase the Option Shares shall vest, subject to subsection 1(d) and
5(c), as follows: (i) _____ Option Shares vest on July 1, 1997; (ii) _____ vest
on January 1, 1998; (iii) _____ Option Shares vest on July 1, 1998, and (iv)
_____ Option Shares vest on January 1, 1999 (each an "Installment") at the
Option Price, so long as the Holder is employed by the Corporation. Said right
shall be cumulative. With respect to each Installment, the "Option Period" shall
commence on the date said Installment vests and terminate on March 14, 2007.
b. Except as limited by Section 5, an Installment may be
exercised, in whole or part, by the Holder by delivery to the Corporation, at
any time during the Option Period, of a written notice (the "Option Notice"),
which Option Notice shall state the Holder's intention to exercise the Option,
the date on which the Holder proposes to purchase the Option Shares (the
"Closing Date") and the number of Option Shares to be purchased on the Closing
Date, which Closing Date shall be no later than 30 days nor earlier than 10 days
following the date of the Option Notice. Upon receipt by the Corporation of an
Option Notice from the Holder, the Holder shall be obligated to purchase that
number of Option Shares to be purchased on the Closing Date set forth in the
Option Notice.
c. The purchase and sale of Option Shares acquired pursuant to
the terms of this Option Agreement shall be made on the Closing Date at the
offices of the Corporation. Delivery of the stock certificate or other
instrument registered in the name of the Holder, evidencing the Option Shares
being purchased on the Closing Date, shall be made by the Corporation to
the Holder on the Closing Date against the delivery to the Corporation of a
certified or bank check in the full amount of the aggregate purchase price
therefor.
d. Should ACTV, Inc. ("ACTV") undergo a Change in Control, as
defined below, or should another corporation which can exercise control over the
Corporation sell or attempt to sell all or substantially all of the assets of
said Corporation, or should more than 50% of its voting power be acquired by a
party which is not affiliated with or controlled by ACTV, then all of the
Holder_s rights to exercise the Option for all the Option Shares shall be
accelerated so that the Installments to purchase all Option Shares shall be
fully vested at the time of said event and the exercise price shall reduce to
$.10 per share. A Change in Control shall be the occurrence of any one of the
following events:
(i) A person (other than a person who is an officer
or a Director of ACTV on the effective date hereof), including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes, or
obtains the right to become, the beneficial owner of ACTV_s securities having
30% or more of the combined voting power of then outstanding securities of ACTV
that may be cast for the election of directors of ACTV;
(ii) At any time, a majority of the Board-nominated
slate of candidates for the Board of ACTV is not elected;
(iii) ACTV consummates a merger in which it is not
the surviving entity;
(iv) Substantially all ACTV's assets are sold; or
(v) ACTV's stockholders approve the dissolution or
liquidation of ACTV.
SECTION 2. Representations and Warranties of The Holder. The Holder
hereby represents and warrants to the Corporation that in the event the Holder
acquires any Option Shares, such Option Shares will be acquired for his own
account, for investment and not with a view to the distribution thereof. The
Holder understands the Option Shares will not be registered under the Securities
Act of 1933, as amended (the "Securities Act"), and that they must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or the transaction is exempt from registration. The certificate
or certificates representing any Option Shares shall bear the following
restrictive legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; OR (ii)
TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR SIMILAR
RULE UNDER THE SECURITIES ACT RELATING TO THE DISPOSITION OF
SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION
SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAN
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT IS
AVAILABLE. IN ADDITION, THIS CERTIFICATE OF STOCK AND THE SHARES
REPRESENTED HEREBY ARE HELD SUBJECT TO THE TERMS AND CONDITIONS
CONTAINED IN AN AGREEMENT BY AND AMONG THE SHAREHOLDERS OF THE
CORPORATION AND THE CORPORATION DATED AS OF MARCH 6, 1997, AND
ALL AMENDMENTS THERETO, AND MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE TERMS AND PROVISIONS THEREOF. A COPY OF SUCH
AGREEMENT WILL BE FURNISHED BY THE CORPORATION UPON REQUEST."
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any time
during the Option Period, there shall be any capital reorganization,
reclassification of the Common Stock (the term "Common Stock" shall mean the
Company_s Class A Common Stock and/or the Class B Stock) (other than a change in
par value or from par value to no par value or from no par value to par value or
as a result of a stock dividend or subdivision, split-up or combination of
shares), the consolidation or merger of the Corporation with or into another
corporation or of the sale of all or substantially all the properties and assets
of the Corporation as an entirety to any other corporation or person, the
unexercised and fully vested portion of this Option shall, after such
reorganization, reclassification, consolidation, merger or sale, be exercisable
for the kind and number of shares of stock or other securities or property of
the Corporation or of the corporation resulting from such consolidation or
surviving such merger or to which such properties and assets shall have been
sold to which the Holder would have been entitled if the Holder had held shares
of Class B Stock issuable upon the exercise hereof immediately prior to such
reorganization, reclassification, consolidation, merger or sale. The provisions
of this Section 3 shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this Option during
the Option Period shall be cumulative as to all prior dates of calculation and
shall be adjusted for any stock dividend, subdivision, split-up or combination
of Common Stock.
b. The Option Price shall be subject to adjustment from
time to time as follows:
If, at any time during the Option Period, the number of shares of
Common Stock outstanding is altered by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up or combination of shares of Common
Stock, then, immediately following the record date fixed for the determination
of holders of shares of Common Stock, entitled to receive such subdivision or
split-up or combination, the Option Price shall be appropriately increased or
decreased and the number of shares of Common Stock issuable upon the exercise
hereof shall be increased or decreased, pursuant to the formula set forth in
Section 4.c.
c. Upon each adjustment of the Option Price pursuant to the
provisions of this Section 4, the number of shares of Common Stock issuable upon
the exercise hereof shall be adjusted to the nearest full share of Common Stock
by multiplying a number equal to the Option Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Option Price.
d. Should additional shares of Class A Common Stock, $.01 par
value, over and above the 4,000,000 shares presently authorized, be issued after
the effective date of this Option Agreement, then the number of shares issuable
upon exercise of this Option shall be increased by the same percentage that the
total number of issued Class A Common Stock has been increased.
e. The Corporation will use its best efforts to amend its
certificate of incorporation to authorize additional Class B Stock should the
number of shares of Class B Stock issuable upon exercise of the Option be
increased in accordance with the terms of this agreement.
SECTION 5. Termination of the Options.
a. Termination of Options in General. Subject to
subsection 5(b), the Option granted hereby shall terminate and the Option
shall no longer be exercisable after March 14, 2007.
b. Option Rights Upon Death, Disability, Resignation. If a
Holder dies or becomes disabled while employed by the Corporation, ACTV, Inc. or
any affiliate or subsidiary of ACTV, Inc. (collectively, the "ACTV Group"), or
resigns from employment with the ACTV Group prior to his complete exercise of
the Option, the Holder (or his heirs) may exercise his Option at any time during
the option period, to the extent that the Holder was entitled to exercise the
Option at the date such event, and the Class B Stock underlying the Option shall
convert into Class A Stock on the second anniversary of the occurrence of such
death, disability or resignation.
SECTION 6. Termination of Employment. In the event that the Holder
is terminated from employment with the ACTV Group for any reason during the
Option Period, then (i) all Options granted to the Holder hereunder shall become
vested and immediately exercisable at an exercise price of $.10 per share
adjusted for any stock splits and capital reorganizations having a similar
effect, subsequent to the effective date hereof, (ii) all Options may be
exercised at any time during the Option Period and (iii) anything herein to the
contrary notwithstanding, the Shares underlying the Options, whether exercised
prior or subsequent to the termination shall not convert to Class A Stock except
as set forth in the applicable Shareholder Agreement.
SECTION 7. Transfer of Option; Successors And Assigns. This
Agreement (including the Option) and all rights hereunder shall not be
transferable at any time without the prior written consent of the Corporation.
This Agreement and all the rights hereunder shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, approved
assigns and approved transferees.
SECTION 8. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Corporation:
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1270 Avenue of the Americas
Xxx Xxxx, XX 00000
Attention: President
If to the Holder, to:
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or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of Delaware.
SECTION 10. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previously written or oral negotiations,
commitments, representations and agreement.
SECTION 11. Amendments and Modifications. This Agreement, or
any provision hereof, may not be amended, changed or modified without the
prior written consent of each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Option
Agreement to be executed and delivered as of the date first above written.
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By:
AGREED TO AND ACCEPTED BY
HOLDER:
Signature
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