FORM OF AMENDED AND RESTATED STOCK OPTION AGREEMENT
This Amended and Restated Stock Option Agreement (this
"Agreement") is made and entered into as of August 4, 1997 ("Date of
Grant"), by and between Metro-Xxxxxxx-Xxxxx Inc., a Delaware
corporation formerly known as P&F Acquisition Corp. (the "Company")
and Tracinda Corporation, a Nevada corporation ("Optionee"), and
amends and supersedes that certain Stock Option Agreement, dated as of
October 10, 1996, by and among the Company and the Optionee (the
"Original Stock Option Agreement").
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT ACT OR THE COMPANY
SHALL HAVE RECEIVED AN OPINION OF COUNSEL (WHICH COUNSEL AND OPINION
SHALL BE SATISFACTORY TO THE COMPANY'S COUNSEL) THAT REGISTRATION OF
SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED.
WHEREAS, Optionee provided certain services in connection
with the formation of the Company and the acquisition by the Company
of the outstanding stock of Metro-Xxxxxxx-Xxxxx Studios Inc., a
Delaware corporation formerly known as Metro-Xxxxxxx-Xxxxx Inc. ("MGM
Studios");
WHEREAS, as consideration for such services, the Company
granted to Optionee, and desires to restate the grant to Optionee of,
an option to purchase shares of the Common Stock, par value $.01 per
share, of the Company ("Common Shares");
WHEREAS, the Company intends to commence with an Approved
Initial Public Offering of the Common Shares and to enter into certain
related transactions; and
WHEREAS, the parties hereto have agreed to enter into this
Agreement for the purpose of amending and restating in its entirety
the provisions of the Original Stock Option Agreement as provided
herein.
NOW, THEREFORE, in consideration of the foregoing recitals
and the covenants set forth herein, the parties hereto hereby agree as
follows:
1. CERTAIN DEFINITIONS. Terms not otherwise defined
elsewhere in this Agreement shall be as defined below:
1.1 "Investors Shareholder Agreement" means that certain
Amended and Restated Investors Shareholder Agreement dated as of
August 4, 1997, by and among the Company, MGM Studios, Tracinda
Corporation ("Tracinda"), Seven Network Limited ("Seven") and Xx.
Xxxxx X. Xxxxxxx.
2. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The
Company hereby grants to Optionee, and Optionee hereby accepts, as of
the Date of Grant, an option to purchase 3,750 Common Shares (the
"Option") at a price per share equal to $267.00 (the "Exercise
Price"), subject to adjustment as provided in Section 5 of this
Agreement. The Option shall expire at 5:00 p.m., Pacific Standard (or
Daylight Savings, if applicable) Time, on October 10, 2002 (the
"Option Expiration Date"), and shall be subject to all of the terms
and conditions set forth in this Agreement.
3. EXERCISABILITY OF OPTION. The Option shall become
exercisable in whole or in part at any time on or after October 10,
1997.
4. EXERCISE OF OPTION. Optionee may exercise the Option by
the delivery to the Company of a written notice of such exercise (the
"Exercise Notice"), which Exercise Notice shall specify the number of
Common Shares to be purchased pursuant to such Exercise Notice (the
"Exercised Shares") and the aggregate Exercise Price for such
Exercised Shares, together with payment in full of such aggregate
Exercise Price in cash or by check payable to the Company.
5. ADJUSTMENTS. The number of Common Shares to be issued
pursuant to the Option and the Exercise Price thereof shall be
adjusted from time to time as follows:
(a) If the Company shall at any time or from time to time
declare or pay a dividend, or make a distribution, on the
outstanding Common Shares in shares of capital stock of the
Company or subdivide the outstanding Common Shares into a greater
number of Common Shares or combine the outstanding Common Shares
into a smaller number of Common Shares, or issue by
reclassification of its Common Shares any shares of its capital
stock, then, in each such case:
(i) the number of Common Shares for which the
Option is exercisable shall be adjusted so that the Optionee
shall be entitled to receive, upon exercise thereof, the
number of shares of capital stock of the Company that the
Optionee would have been entitled to receive after the
happening of any of the events described above had the
Option been exercised in full immediately prior to the
happening of such event or the record date thereof,
whichever is earlier; and
(ii) an adjustment made pursuant to this Section
5(a) shall become effective for purposes of subclause (i) of
this Section 5(a), (A) in the case of any such dividend or
distribution, immediately after the close of business on the
record date for the determination of holders of Common
Shares entitled to receive such dividend or distribution, or
(B) in the case of any subdivision, combination or
reclassification, at the close of business on the day upon
which such corporate action becomes effective.
(b) If at any time or from time to time the Company shall
declare, order, pay or make, in respect of its capital stock, a
dividend or other distribution (including, without limitation,
any cash dividend, distribution of stock or other securities or
property or rights, options or warrants to subscribe for
securities of the Company or any of its subsidiaries, but
excluding capital stock of the Company the issuance of which is
subject to Section 5(a)), then, and in each such case, the
Optionee shall be entitled to receive, upon the exercise thereof,
for each Common Share issuable upon the exercise thereof, such
additional stock or other securities or property, cash, rights,
options or warrants to subscribe for securities of the Company or
any of its subsidiaries per Common Share as if such Common Share
had been issued prior to the record date for such dividend or
distribution. An adjustment made pursuant to this Section 5(b)
shall become effective immediately after the close of business on
the record date fixed for the determination of stockholders
entitled to receive such dividend or distribution. The provisions
of this Section 5(b) shall not apply to payment of regular
quarterly cash dividends on Common Shares after October 1, 2001.
(c) In the event of any adjustment provided for in this
Section 5 in the number of Common Shares to be issued pursuant to
the Option, the Exercise Price payable upon exercise of the
Option shall be adjusted such that the adjustment to the Exercise
Price payable upon the exercise of the Option shall be inversely
proportionate to the adjustment in the number of Common Shares to
be issued pursuant to the Option.
(d) The number of Common Shares into which the Option is
exercisable and the Exercise Price, in each case as adjusted as
herein provided, shall remain in effect until further adjustment
as required herein.
6. NOTICES. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed given if delivered personally or five days after
mailing by certified or registered mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Company, to:
Metro-Xxxxxxx-Xxxxx Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Chief Executive and Financial Officers
If to Optionee, to:
Tracinda Corporation
0000 Xxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Secretary/Treasurer
with a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, P.C.
or at such other address as either shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of
the date so telecommunicated, personally delivered or mailed.
7. NONTRANSFERABILITY. Neither the Option nor any interest
therein may be sold, assigned, conveyed, gifted, pledged, hypothecated
or otherwise transferred in any manner.
8. STOCKHOLDER RIGHTS. Optionee shall not be entitled to
vote, receive dividends or be deemed for any purpose the holder of any
Common Shares (or any other securities issuable upon the exercise of
the Option) until the Option shall have been duly exercised, either in
whole or in part, to purchase Common Shares in accordance with the
provisions of this Agreement.
9. OTHER AGREEMENTS. Optionee and the Company hereby
acknowledge that all Common Shares of the Company are subject to and
entitled to the benefits of (i) that certain Amended and Restated
Shareholders Agreement dated as of August 4, 1997 (the "Shareholders
Agreement") by and among the Company, MGM Studios, Tracinda, Seven,
Xx. Xxxxx X. Xxxxxxx and certain other persons and (ii) the Investors
Shareholder Agreement.
10. OPTION AND SHARES ISSUABLE UPON EXERCISE NOT REGISTERED.
Optionee, by accepting the Option, acknowledges that the Option is
not, and the Common Shares and other securities issuable upon exercise
thereof may not be, registered under the Securities Act of 1933 (the
"Securities Act"), and represents that it has acquired the Option for
its own account and not with a present view to, or in connection with,
any distribution thereof in violation of the Securities Act. Unless
and until registered under the Securities Act, each stock certificate
representing the Common Shares and other securities purchased upon
exercise of the Option shall be stamped or otherwise imprinted with
the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY BE
OFFERED OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THESE SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER
AND CERTAIN OTHER MATTERS SET FORTH IN AN AGREEMENT DATED AS
OF AUGUST 4, 1997 BY AND AMONG SEVEN NETWORK LIMITED,
TRACINDA CORPORATION, METRO-XXXXXXX-XXXXX STUDIOS INC.,
METRO-XXXXXXX-XXXXX INC., XX. XXXXX X. XXXXXXX, AND CERTAIN
OTHER PERSONS (THE "AGREEMENT"). A COPY OF THE AGREEMENT IS
ON FILE WITH THE SECRETARY OF METRO-XXXXXXX-XXXXX INC."
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY BE
OFFERED OR SOLD ONLY IF REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR IF AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
THESE SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON SALE,
TRANSFER OR OTHER DISPOSITION AND CERTAIN AGREEMENTS WITH
RESPECT TO VOTING SET FORTH IN AN AMENDED AND RESTATED
INVESTORS SHAREHOLDER AGREEMENT DATED AS OF AUGUST 4, 1997
BY AND AMONG SEVEN NETWORK LIMITED, TRACINDA CORPORATION,
METRO-XXXXXXX-XXXXX STUDIOS INC., METRO-XXXXXXX-XXXXX INC.
AND XX. XXXXX X. XXXXXXX (THE "AGREEMENT"). A COPY OF THE
AGREEMENT IS ON FILE WITH THE SECRETARY OF
METRO-XXXXXXX-XXXXX INC.
11. GOVERNING LAW. This Agreement and the Option granted
hereunder shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
12. EFFECTIVE DATE. This Agreement shall become effective at
the time of the execution hereof.
13. TERMINATION OF ORIGINAL STOCK OPTION AGREEMENT. Optionee
and the Company hereby mutually agree that, effective as of the
execution hereof, the Original Stock Option Agreement shall terminate
and be of no further force or effect, and neither of them shall have
any further rights, duties or obligations thereunder from and after
the effective date of such termination. Until such time as this
Agreement is executed, the Original Stock Option Agreement shall
remain in full force and effect and shall be unaffected hereby.
IN WITNESS WHEREOF, the Company and Optionee have duly
executed this Agreement as of the Date of Grant.
METRO-XXXXXXX-XXXXX INC.
By: _____________________________
Title: _____________________________
TRACINDA CORPORATION
By: _____________________________
Title: _____________________________
