Exhibit 10.4
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of June 20, 1997 to the Employment Agreement (the
"Agreement") dated as of March 31, 1997 between LANCIT MEDIA ENTERTAINMENT,
LTD., a New York corporation ("Employer") and XXXXX XXXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and Executive entered into the Agreement on March 31,
1997; and
WHEREAS, the Board of Directors approved certain amendments to the
Agreement on the date hereof; and
WHEREAS, capitalized terms used in this Amendment and not separately
defined shall have the meanings ascribed thereto in the Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree to
amend the Agreement as follows:
1. Paragraphs 3(e), 3(f) and 3(g) of the Agreement are hereby
amended to provide in their entirety as follows:
(e) (i) Employer hereby grants to Executive stock options to
purchase four hundred ninety-five thousand (495,000) shares
of Employer's common stock (the "Signing Options") under
Employer's 1990 Stock Option Plan (the "1990 Plan") on the
terms and conditions described in the Stock Option Agreement
between Employer and Executive dated as of June 20, 1997, a
copy of which is annexed hereto as Exhibit A. Employer
represents, warrants and covenants that no fewer than four
hundred ninety-five thousand (495,000) authorized but
unissued shares of Employer's common stock (or shares of
common stock held in treasury) will remain reserved and
available for issuance under the 1990 Plan pursuant to such
Stock Option Agreement for so long as the Signing Options
remain outstanding. Subject to subparagraph 3(f)(v)(B), the
Signing Options may not be exercised prior to October 1,
1997. From and after that date (or such earlier date as is
provided for hereunder), the Signing Options may be
exercised in accordance with their terms.
(ii) Employer represents and warrants the shares of common
stock issuable pursuant to the Signing Options (the "Signing
Option Shares") are registered under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a
registration statement on Form S-8 which is currently in
effect. Upon the request of Executive, Employer shall
promptly prepare and file, by means of a post-effective
amendment, and thereafter maintain current and in effect, a
re-offer prospectus under such registration statement,
registering the resale of all the Signing Option Shares by
Executive. Employer agrees to use its reasonable efforts to
make timely filings of its periodic reports and to take such
other actions as may be necessary or appropriate in order
for Employer to remain qualified to use Form S- 8 and such
re-offer prospectus as contemplated by this Agreement.
Employer covenants and agrees to use its reasonable efforts
to maintain current and in effect each of such registration
statement and reoffer prospectus until the earliest to occur
of (A) the eleventh (11th) anniversary of the Effective
Date, or (B) the sale of all of the Signing Option Shares by
Executive, or (iii) the date Executive receives an opinion
of counsel reasonably acceptable to counsel for Executive
(which may be from counsel to Employer) that all of the
Signing Option Shares may be sold under the provisions of
paragraph (k) of Rule 144 notwithstanding the fact that a
portion of the Signing Option Shares may remain unregistered
under the Act.
(iii)If Employer is unable to maintain in effect the
registration of the Signing Option Shares on Form S-8 or
fails or is unable to file or thereafter maintain in effect
a re-offer prospectus under such registration statement,
Executive will be entitled to the demand registration rights
described in the Registration Rights Agreement between
Employer and Executive dated as of March 31, 1997, a copy of
which is annexed hereto as Exhibit B.
(iv) Executive agrees that, during any ninety (90) day
period, and notwithstanding the registration under the
Securities Act of the Signing Option Shares, Executive's
right to sell, assign, hypothecate or otherwise transfer any
interest in the Signing Option Shares (collectively referred
to herein as Executive's "Transfer Rights"), shall be
limited to that number of the Signing Option Shares,
together with any shares of common stock issuable to
Executive pursuant to the Units or the Additional Signing
Options hereinafter referred to (collectively, the "Option
Shares"), which is equal to the greater of (A) one (1%)
percent of the number of shares of Employer's common stock
outstanding or (B) the average weekly reported volume of
trading in Employer's common stock on all national
securities exchanges and/or reported through the automated
quotation system of a registered securities association
(e.g., NASDAQ) during the four (4) calendar weeks
immediately preceding the filing of the notice of sale
required to be filed under Rule 144 if the Option Shares are
being sold in compliance with SEC Rule 144 or, if compliance
with Rule 144 is not required, the date of sale. Employer
and Executive agree that the restrictions described in this
subparagraph 3(e)(iv) shall expire: (1) if Executive's
employment is terminated other than for the reason set forth
in subparagraph 4(a)(iv), upon the later of (x) the
termination of Executive's employment with Employer or (y)
March 24, 2001, or (2) if Executive's employment is
terminated for the reason set forth in subparagraph
4(a)(iv), upon the termination of Executive's employment
with Employer or (3) in the event of a "Change in Control of
Employer" as defined in subparagraph 4(d) of this Agreement.
Employer further agrees that if Executive, prior to her
termination of employment, has not transferred or sold the
maximum number of Option Shares which she had been entitled
to transfer or sell hereunder, then, as of the date of
termination of her employment, where such date is prior to
March 24, 2001, all restrictions on transfer and sale shall
expire as of the date of termination of employment as to the
number of Option Shares which Executive could have
previously transferred or sold cumulatively, less the number
of shares which were previously transferred or sold.
(v) (A) In the event of (1) the dissolution or liquidation
of Employer or (2) a merger or consolidation in which (x)
the Employer does not survive as a publicly owned
corporation with securities registered under the Exchange
Act and (y) the agreements governing such merger or
consolidation do not provide for the issuance of substitute
options with substantially equivalent terms, as determined
by Employer's Board of Directors, in lieu of the Signing
Options or for the express assumption (within the meaning of
Section 424(a) of the Internal Revenue Code of 1986, as
amended (the "Code") of the Signing Options by the surviving
corporation, Employer's Board of Directors shall declare
that the Signing Options shall terminate as of a date to be
fixed by the Board of Directors (the "Termination Date"),
provided that the Board of Directors shall cause to be
delivered not less than thirty (30) days before the
Termination Date written notice of the Termination Date to
Executive and Executive shall have the right, during the
period between the receipt of the written notice and the
Termination Date, to exercise the Signing Options, in whole
or in part, whether or not all or any part of the Signing
Options would not otherwise be exercisable; provided,
however, that unless Executive shall deliver to Employer
written notice to the contrary at least three (3) business
days prior to the Termination Date, Executive and all other
holders of the Signing Options, if any, shall be deemed to
have delivered to Employer a notice of exercise of the
Signing Options, in whole, on such Termination Date. To the
extent that the Signing Options are not exercised in their
entirety on or prior to the Termination Date, any and all
Signing Options and all rights then remaining hereunder
shall terminate as of the Termination Date.
(B) Upon a "Change in Control of Employer", the Signing
Options, if not already exercisable in accordance with their
terms, shall become immediately exercisable in whole or in
part.
(C) In the event of a "Change in Control of Employer"
pursuant to which substitute options are offered to
Executive in place of the Signing Options herein granted or
the surviving corporation offers to assume the Signing
Options, the Board shall cause to be delivered to Executive,
not less than thirty (30) days before the effective date of
such "Change In Control of Employer", written notice of such
effective date to Executive and Executive shall have the
right to elect to accept such substitute options or
assumption of the Signing Options or to exercise the Signing
Options in whole or in part, prior to the such effective
date (and such notice shall so state); provided, however,
that unless Executive shall deliver to Employer written
notice to the contrary at least three (3) business days
prior to such effective date, Executive and all other
holders of the Signing Options, if any, shall be deemed to
have
rejected any substitute options offered to Executive and any
offer to assume the Signing Options and to have delivered to
Employer a notice of exercise of the Signing Options, in
whole, on such effective date.
(vi) If, at the time Executive purchases any Option Shares
upon exercise of Signing Options, such Option Shares are not
registered for resale by Executive under the Securities Act,
and Executive is entitled to demand registration rights
under subparagraph 3(e)(iii) above, and if on the date on
which such Option Shares may for the first time be sold by
Executive without limitation (whether by means of an
effective registration for resale under the Securities Act
or otherwise) the "fair market value" of a share of
Employer's common stock is, with respect to any such Option
Share, below the lesser of (A) the fair market value of such
Option Share on the date Executive's notice of election to
exercise her registration rights was received by Employer or
(B) the fair market value of such Option Share on the date
the certificate representing ownership in registered form
thereof was issued, Employer will promptly compensate
Executive with a bonus payment in an amount of cash or
registered shares (valued at their fair market value) equal
to the sum of the differences between the fair market value
of a share of Employer's common stock on the date on which
such registration statement is declared effective and the
amount determined to be, with respect to each Option Share
described in this subparagraph 3(e)(vi), the lesser of the
amounts described in clauses (A) and (B) above. For purposes
of the foregoing, the term fair market value shall have the
same meaning as is ascribed to such term in Schedule A
annexed hereto.
(f) (i) As a further financial incentive for Executive, Employer
hereby grants Executive an additional value incentive bonus
(the "Value Incentive Bonus") of two hundred fifty-five
thousand (255,000) units (the "Units") which shall be
convertible in accordance with the terms and conditions of
this Agreement and Schedule A annexed hereto. The value of
each Unit shall be equal to the increased value of one (1)
share of Employer's common stock, calculated in the manner
described in this Agreement and in Schedule A annexed
hereto. Upon conversion of the Units into compensation, as
contemplated by Paragraph 2 of Schedule A, employee will be
entitled to receive cash or shares of Employer's common
stock at the option of Employer's Board of Directors, in
accordance with Schedule A. The Value Incentive Bonus is and
shall be an employee benefit plan of Employer.
(ii) (A) The Units are granted in recognition of the
personal services of Executive, and Executive hereby agrees
that Executive will not directly or indirectly sell, assign,
transfer, pledge, hypothecate, dispose of, encumber or
otherwise grant any interest in the Units other than (1) by
will or by the laws of descent and distribution or (2)
pursuant to a "Qualified Domestic Relations Order" ("QDRO")
as defined in the Code, or Title I of the Employment
Retirement Income Security Act of 1974, as amended. The
Units may be converted during the lifetime of Executive only
by Executive or by Executive's guardian or other legal
representative or by a transferee thereof pursuant to a QDRO
(a "Permitted Transferee").
(B) If Executive shall die while still employed pursuant to
this Agreement, the Units may be converted by Executive's
executor, administrator or other legal representative, or by
a Permitted Transferee to whom the Units were lawfully
transferred, if any, at any time prior to the expiration of
the Units.
(C) If Executive's employment pursuant to this Agreement is
terminated by reason of permanent disability (as defined in
Paragraph 4(a) below), the Units may be converted by
Executive or by Executive's guardian or legal
representative, or by a Permitted Transferee to whom the
Units were lawfully transferred, if any, at any time prior
to the expiration of the Units.
(iii)Subject to subparagraph 3(f)(viii)(B) below, the Units
may not be converted prior to the earlier to occur of the
Shareholders Meeting (as defined in subparagraph 3(g)(ii)
below) or December 31, 1997, except as hereinafter provided
and provided that the Units do not expire immediately
following the Shareholders Meeting (held on or before
December 31, 1997) in accordance with subparagraph
3(f)(vii)(A). From and after such date the Units may be
converted in whole or from time to time in part at any time
before their expiration by giving advance written notice of
such conversion to the Chief Financial Officer of Employer
in the form of Exhibit I annexed to Schedule A hereto prior
to midnight, New York City time, on March 31, 2007 (the
"Expiration Date"), specifying the number of Units (not
exceeding two hundred fifty-five thousand (255,000)) being
converted.
(iv) Employer agrees that with respect to the shares of
common stock which may be issuable to Executive pursuant to
Executive's Value Incentive Bonus (the "Value Incentive
Shares"), upon the request of Executive following the
earlier of the Shareholders Meeting of Employer referred to
in subparagraph 3(g)(ii) below or December 31, 1997
(provided the New Plan and/or Additional Signing Options
referred to in Paragraph 3(g) below were not approved or
ratified at such meeting on or prior to December 31, 1997),
Employer will promptly seek to register the Value Incentive
Shares under the Securities Act, on a Form S-8 (or the
applicable successor Form) registration statement, and shall
thereafter use its reasonable efforts to maintain current
and in effect such registration statement. In connection
with such registration, Employer shall prepare and file and
thereafter maintain current and in effect, a "re-offer
prospectus" under such registration statement, registering
the resale of all the Value Incentive Shares by Executive.
Employer agrees to use its reasonable efforts to make timely
filings of its periodic reports and to take such other
actions as may be necessary or appropriate in order for
Employer to remain qualified to use such Form S-8 and such
re-offer prospectus as contemplated by this Agreement.
Employer's obligations under this paragraph shall terminate
upon the earliest to occur of (i) the eleventh (11th)
anniversary of the Effective Date, or (ii) the sale of all
of the Value Incentive Shares by Executive or (iii) the date
Executive receives an opinion of counsel reasonably
acceptable to counsel for Executive (which may be from
counsel to Employer) that all of the Value Incentive Shares
may be sold under the provisions of paragraph (k) of Rule
144 notwithstanding the fact that a portion of the Value
Incentive Shares may remain unregistered under the
Securities Act or (iv) expiration of the Units as provided
in subparagraph 3(f)(viii) hereof.
(v) If Employer is unable to register the Value Incentive
Shares on Form S-8 or thereafter fails or is unable to
maintain such registration statement in effect or fails or
is unable to file or thereafter maintain in effect a
re-offer prospectus under such registration statement,
Executive will be entitled to the demand registration rights
described in the Registration Rights Agreement between
Employer and Executive dated as of March 31, 1997, a copy of
which is annexed hereto as Exhibit B.
(vi) Executive agrees that, during any ninety (90) day
period, and notwithstanding the registration under the
Securities Act of the Value Incentive Shares, Executive's
right to sell, assign, hypothecate or otherwise transfer any
interest in the Value Incentive Shares (collectively
referred to herein as Executive's "Transfer Rights"), shall
be limited as set forth in subparagraph 3(e)(iv) of this
Agreement. Employer and Executive agree that the
restrictions described in this subparagraph 3(f)(vi) shall
expire: (1) if Executive's employment is terminated other
than for the reason set forth in subparagraph 4(a)(iv), upon
the later of (x) the termination of Executive's employment
with Employer or (y) March 30, 2001, or (2) if Executive's
employment is terminated for the reason set forth in
subparagraph 4(a)(iv), upon the termination of Executive's
employment with Employer or (3) upon a "Change in Control of
Employer" as defined in subparagraph 4(d) of this Agreement.
Employer further agrees that if Executive, prior to her
termination of employment, has not transferred or sold the
maximum number of Value Incentive Shares which she had been
entitled to transfer or sell hereunder, then, as of the date
of termination of her employment, where such date is prior
to March 30, 2001, all restrictions on transfer and sale
shall expire as of the date of termination of employment as
to the number of Value Incentive Shares which Executive
could have previously transferred or sold cumulatively, less
the number of shares which were previously transferred or
sold.
(vii) The Units shall expire and become null and void at the
earliest of:
(A) the approval or ratification by Employer's shareholders at
the Shareholder's Meeting of the New Plan on or before
December 31, 1997, such that the grant of Additional Signing
Options granted to Executive to purchase up to two hundred
fifty-five thousand (255,000) shares of Common Stock become
effective;
(B) the Expiration Date;
(C) the dissolution of Employer (subject to the provisions of
subparagraph 3(f)(viii) below);
(D) (1) six (6) months after the termination of this Agreement
if such termination occurs on or prior to March 31, 2001
other than by reason of death or "permanent disability" (as
defined in subparagraph 4(a) below), or (2) one (1) year
after the termination of this Agreement if such termination
occurs on or prior to March 31, 2001 by reason of death or
disability;
(E) one (1) year after the termination of this Agreement if such
termination occurs for any reason whatsoever after March 31,
2001 and on or prior to March 31, 2002;
(F) two (2) years after the termination of this Agreement if
such termination occurs for any reason whatsoever after
March 31, 2002 and on or prior to March 31, 2003; or
(G) three (3) years after the termination of this Agreement if
such termination occurs for any reason whatsoever after
March 31, 2003.
In the event Executive's employment is terminated within
four (4) years of the Effective Date, other than "For Cause"
(as defined in subparagraph 4(a) of this Agreement) or in
the event Executive delivers her notice of her "Resignation
For Cause" (as defined in subparagraph 4(c) of this
Agreement), then, notwithstanding any other provisions of
this or any other agreement dated as of even date herewith
or prior hereto, the Units shall expire no earlier than the
date which is two (2) years from the Effective Date with
respect to fifty (50%) percent of the Value Incentive Shares
or cash issuable upon conversion of the Units, the date
which is three (3) years from the Effective Date with
respect to an additional twenty-five (25%) percent of the
Value Incentive Shares or cash issuable upon conversion of
the Units and the date which is four (4) years from the
Effective Date with respect to the remaining twenty-five
(25%) percent of the Value Incentive Shares or cash issuable
upon conversion of the Units.
(viii) (A) In the event of (1) the dissolution or liquidation of
Employer or (2) a merger or consolidation in which (x) the
Employer does not survive as a publicly owned corporation
with securities registered under the Exchange Act and (y)
the agreements governing such merger or consolidation do not
provide for the issuance of a substitute value incentive
bonus or options with substantially equivalent terms, as
determined by Employer's Board of Directors, in lieu of the
Units or for the express assumption (within the meaning of
Section 424(a) of the Code) of the Units by the surviving
corporation, Employer's Board of Directors shall declare
that the Units shall terminate as of a date to be fixed by
the Board of Directors (the "Termination Date"), provided
that the Board of Directors shall cause to be delivered not
less than thirty (30) days before the Termination Date
written notice of the Termination Date to Executive, and
Executive shall have the right, during the period between
the receipt of the written notice and the Termination Date
to convert the Units, in whole or in part, whether or not
all or any part of the Units would otherwise be convertible;
provided, however, that unless Executive shall deliver to
Employer written notice to the contrary at least three (3)
business days prior to the Termination Date, Executive and
all other holders of Units, if any, shall be deemed to have
delivered to Employer a notice of conversion of the Units,
in whole, on such Termination Date. To the extent that the
Units are not converted in their entirety on or prior to the
Termination Date, any and all Units and all rights then
remaining hereunder shall terminate as of the Termination
Date.
(B) In the event a "Change in Control of Employer" (as
defined in subparagraph 4(d) below) occurs prior to the
Units becoming convertible pursuant to Paragraph 3(f)(iii),
the Units shall become immediately convertible in whole or
in part.
(C) In the event of a "Change in Control of Employer"
pursuant to which a substitute value incentive bonus units
or options are offered to Executive in place of the Units
herein granted or the surviving corporation offers to assume
Employer's obligations under the value incentive bonus plan,
the Board shall cause to be delivered to Executive, not less
than thirty (30) days before the effective date of such
"Change in Control of Employer", written notice of such
effective date to Executive, and Executive shall have the
right to elect to accept such substitute value incentive
bonus units or options or to convert the Units in whole or
in part, prior to the effective date of such "Change in
Control of Employer" (and such notice shall so state);
provided, however, that unless Executive shall deliver to
Employer written notice to the contrary at least three (3)
business days prior to such effective date, Executive and
all other holders of Units, if any, shall be deemed to have
rejected any substitute value
incentive bonus units or options offered to Executive and
any offer to assume the Units and to have delivered to
Employer a notice of conversion of the Units, in whole, on
such effective date.
(ix) If, at the time Executive converts any Units with respect to
which payment is made in Value Incentive Shares, such Value
Incentive Shares are not registered for resale under the
Securities Act, and Executive is entitled to demand
registration rights under subparagraph 3(f)(v) above, and if
on the date on which such Value Incentive Shares may for the
first time be sold by Executive without limitation (whether
by means of an effective registration for resale under the
Securities Act or otherwise) the "fair market value" of a
share of Employer's common stock is, with respect to any
such Value Incentive Share, below the lesser of (A) the fair
market value of such Value Incentive Share on the date
Executive's notice of election to exercise her registration
rights was received by Employer or (B) the fair market value
of such Value Incentive Share on the date the certificate
representing ownership in registered form thereof was
issued, Employer will promptly compensate Executive with a
bonus payment in an amount of cash or registered shares
(valued at their fair market value) equal to the sum of the
differences between the fair market value of a share of
Employer's common stock on the date on which such
registration statement is declared effective and the amount
determined to be, with respect to each Value Incentive Share
described in this subparagraph 3(f)(ix), the lesser of the
amounts described in clauses (A) and (B) above. For purposes
of the foregoing, the term fair market value shall have the
same meaning as is ascribed to such term in Schedule A.
(g) (i) Employer hereby grants and, subject to the approval of
Employer's shareholders at the Shareholders Meeting described in
subparagraph 3(g)(ii), Executive agrees to accept in lieu of the
Value Incentive Bonus, stock options to purchase two hundred
fifty-five thousand (255,000) shares of Employer's common stock
(the "Additional Signing Options") on the terms and conditions
described in the Stock Option Agreement between Employer and
Executive dated as of June 20, 1997, a copy of which is annexed
hereto as Exhibit C, pursuant to the 1997 Incentive Stock Plan of
Employer (the "New Plan") which has been adopted by the Board of
Directors, subject to shareholder approval. Subject to obtaining
such approval, Employer represents, warrants and covenants that
no fewer than two hundred fifty-five thousand (255,000)
authorized but unissued shares of Employer's common stock (or
shares of common stock held in treasury) will remain reserved and
available for issuance under such New Plan pursuant to such Stock
Option Agreement for so long as the Additional Signing Options
remain outstanding.
(ii) Employer agrees to call an annual or special meeting of its
shareholders promptly following the execution of this Agreement,
but in no event to be held later than December 31, 1997, for the
purpose of seeking such shareholder approval of the New Plan
and/or ratification or approval of the grant of the Additional
Signing Options (the "Shareholders Meeting"). Executive agrees
that if the shareholders approve the New Plan or otherwise ratify
or approve the grant of the Additional Signing Options, all of
Executive's rights to the Value Incentive Bonus shall be deemed
null and void, ab initio.
(iii)Employer agrees that with respect to the shares of common
stock issuable to Executive upon exercise of the Signing Options
(the "Additional Option Shares"), Employer will, upon the request
of Executive following the Shareholders Meeting, promptly seek to
register the Additional Option Shares under the Securities Act on
a Form S-8 (or the applicable successor Form) registration
statement, and shall thereafter use its reasonable efforts to
maintain current and in effect such registration statement. In
connection with such registration, Employer shall prepare and
thereafter maintain current and in effect, a "re-offer
prospectus" under such registration statement, registering the
resale of all of the Additional Option Shares by Executive.
Employer agrees to use its reasonable efforts to make timely
filings of its periodic reports and to take such other actions as
may be necessary or appropriate in order for Employer to remain
qualified to use such Form S-8 and such re-offer prospectus as
contemplated by this Agreement. Employer's obligations under this
paragraph shall terminate upon the earliest to occur of (i) the
eleventh (11th) anniversary of the Effective Date, or (ii) the
sale of all of the Additional Option Shares by Executive or (iii)
the date Executive receives an opinion of counsel reasonably
acceptable to counsel for Executive (which may be from counsel to
Employer) that all of the Additional Option Shares may be sold
under the provisions of paragraph (k) of Rule 144 notwithstanding
the fact that a portion of the Additional Option Shares may
remain unregistered under the Securities Act.
(iv) If Employer is unable to register the Additional Option
Shares on Form S-8 or thereafter fails or is unable to maintain
such registration statement in effect or fails or is unable to
file or thereafter maintain in effect a re-offer prospectus under
such registration statement, Executive will be entitled to the
demand registration rights described in the Registration Rights
Agreement between Employer and Executive dated as of March 31,
1997, a copy of which is annexed hereto as Exhibit B.
(v) Executive agrees that, during any ninety (90) day period, and
notwithstanding the registration under the Securities Act of the
Additional Option Shares, Executive's right to sell, assign,
hypothecate or otherwise transfer any interest in the Additional
Option Shares (collectively referred to herein as Executive's
"Transfer Rights"), shall be limited as set forth in subparagraph
3(e)(iv) above. Employer and Executive agree that the
restrictions described in this subparagraph 3(g)(v) shall expire:
(1) if Executive's employment is terminated other than for the
reason set forth in subparagraph 4(a)(iv), upon the later of (x)
the termination of Executive's employment with Employer or (y)
March 24, 2001, or (2) if Executive's employment is terminated
for the reason set forth in subparagraph 4(a)(iv), upon the
termination of Executive's employment with Employer or (3) in the
event of a "Change In Control of Employer" as defined in
subparagraph 4(d) of this Agreement. Employer further agrees that
if Executive, prior to her termination of employment, has not
transferred or sold the maximum number of Additional Option
Shares which she had been entitled to transfer or sell hereunder,
then, as of the date of termination of her employment, where such
date is prior to March 24, 2001, all restrictions on transfer and
sale shall expire as of the date of termination of employment as
to the number of Additional Option Shares which Executive could
have previously transferred or sold cumulatively, less the number
of shares which were previously transferred or sold.
(vi) (A) In the event of (1) the dissolution or liquidation of
Employer or (2) a merger or consolidation in which (x) the
Employer does not survive as a publicly owned corporation with
securities registered under the Exchange Act and (y) the
agreements governing such merger or consolidation do not provide
for the issuance of substitute options with substantially
equivalent terms, as determined by Employer's Board of Directors,
in lieu of the Additional Signing Options or for the express
assumption (within the meaning of Section 424(a) of the Code) of
the Additional Signing Options by the surviving corporation,
Employer's Board of Directors shall declare that the Additional
Signing Options shall terminate as of a date to be fixed by the
Board of Directors (the "Termination Date"), provided that the
Board of Directors shall cause to be delivered not less than
thirty (30) days before the Termination Date written notice of
the Termination Date to Executive and, provided the New Plan or
the Additional Signing Options have theretofore been approved or
ratified by Employer's shareholders as contemplated by
subparagraph 3(g)(ii) above, Executive shall have the right,
during the period between the receipt of the written notice and
the Termination Date to exercise the Additional Signing Options,
in whole or in part, whether or not all or any part of the
Additional Signing Options would not otherwise be exercisable;
provided, however, that unless Executive shall deliver to
Employer written notice to the contrary at least three (3)
business days prior to the Termination Date, Executive and all
other holders of the Additional Signing Options, if any, shall be
deemed to have delivered to Employer a notice of exercise of the
Additional Signing Options, in whole, on such Termination Date.
To the extent that the Additional Signing Options are not
exercised in their entirety on or prior to the Termination Date,
any and all Additional Signing Options and all rights then
remaining hereunder shall terminate as of the Termination Date.
(B) Provided the New Plan or the Additional Signing Options have
been approved or ratified by Employer's shareholders as
contemplated by the provisions of subparagraph 3(g)(ii) above,
upon a "Change in Control of Employer", the Additional Signing
Options, if not already exercisable in accordance with their
terms, shall become immediately exercisable in whole or in part.
(C) In the event of a "Change in Control of Employer" pursuant to
which substitute options are offered to Executive in place of the
Additional Signing Options herein granted or the surviving
corporation offers to assume the Additional Signing Options, the
Board shall cause to be delivered to Executive, not less than
thirty (30) days before the effective date of such "Change in
Control of Employer", written notice of such effective date to
Executive and, provided the New Plan or the Additional Signing
Options have theretofore been approved or ratified by Employer's
shareholders as contemplated by the provisions of subparagraph
3(g)(ii) above, Executive shall have the right to elect to accept
such substitute options or assumption of the Additional Signing
Options or to exercise the
Additional Signing Options in whole or in part, prior to such
effective date (and such notice shall so state); provided,
however, that unless Executive shall deliver to Employer written
notice to the contrary at least three (3) business days prior to
such effective date, Executive and all other holders of the
Additional Signing Options, if any, shall be deemed to have
rejected any substitute options offered to Executive and any
offer to assume the Additional Signing Options and to have
delivered to Employer a notice of exercise of the Additional
Signing Options, in whole, on such effective date.
(vii)If, at the time Executive purchases any Additional Option
Shares upon exercise of Additional Signing Options, such
Additional Option Shares are not registered for resale under the
Securities Act, and Executive is entitled to demand registration
rights under subparagraph 3(g)(iv) above, and if on the date on
which such Additional Option Shares may for the first time be
sold by Executive without limitation (whether by means of an
effective registration for resale under the Securities Act or
otherwise) the "fair market value" of a share of Employer's
common stock is, with respect to any such Additional Option
Share, below the lesser of (A) the fair market value of such
Additional Option Share on the date Executive's notice of
election to exercise her registration rights was received by
Employer or (B) the fair market value of such Additional Option
Share on the date the certificate representing ownership in
registered form thereof was issued, Employer will promptly
compensate Executive with a bonus payment in an amount of cash or
registered shares (valued at their fair market value) equal to
the sum of the differences between the fair market value of a
share of Employer's common stock on the date on which such
registration statement is declared effective and the amount
determined to be, with respect to each Additional Option Share
described in this subparagraph 3(g)(vii), the lesser of the
amounts described in clauses (A) and (B) above. For purposes of
the foregoing, the term fair market value shall have the same
meaning as is ascribed to such term in Schedule A annexed hereto.
2. Paragraph 4(f) of the Agreement is hereby amended to provide in
its entirety as follows:
(f) Unless Executive gives Employer written notice not later than
five (5) business days prior to the effective date of a Change in
Control of Employer that she wishes to remain employed pursuant
to this Agreement following such effective date, Executive shall
be deemed to have served her written notice of Resignation For
Cause pursuant to subparagraph 4(c)(iv) hereof on the effective
date of such "Change in Control of Employer". Such resignation
shall terminate Executive's obligations under this Agreement
effective immediately following such Change in Control of
Employer, and Executive shall be entitled to the same amounts as
would be payable if Employer had terminated Executive pursuant to
subparagraph 4(b) hereof, except (i) that for purposes of
calculating such amounts, the remainder of the term of this
Agreement shall be deemed to be two (2) years, regardless of the
actual length of the then remaining term of this Agreement, and
(ii) payment of cash shall be accelerated to the effective date
of such Change in Control of Employer. Executive shall also be
entitled to any benefits accrued under this Agreement through the
date of such Change in Control of Employer or accruing pursuant
thereto, including without limitation any amounts payable
pursuant to Paragraph 3(c) hereof or any rights under any of
Paragraphs 3(e), 3(f) or 3(g) hereof, payable as of the effective
date of such Change in Control of Employer.
3. Paragraph 4(g) of the Agreement is hereby amended to provide in
its entirety as follows:
(g) Immediately upon the occurrence of a "Change in Control of
Employer", all restrictions imposed by this Agreement and
Exhibits (excluding those restrictions otherwise imposed by law)
on the transfer and sale of Value Incentive Shares, the Signing
Option Shares or the Additional Option Shares, as applicable,
shall cease to apply.
4. Schedule A and Exhibits A, B and C to the Agreement are hereby
amended and restated to conform to the provisions of this
Amendment and, as so amended and restated, are annexed hereto.
5. Subject to the Amendments effected hereby, the Agreement shall
remain in full force and effect.
6. This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.
Attest: LANCIT MEDIA ENTERTAINMENT, LTD.
/s/ XXXX X. XXXXXX By: /s/ XXXXXXXX X. XXXXXX
Secretary Xxxxxxxx X. Xxxxxx
/s/ XXXXX X. XXXXXXX
Xxxxx Xxxxxxx
Schedule A
CALCULATION AND PAYMENT OF VALUE INCENTIVE BONUS
1. Measurement in Units. Units shall be used solely as a device for
the measurement and determination of the amount to be paid to
XXXXX X. XXXXXXX ("Executive") as her "Value Incentive Bonus"
under the employment agreement to which this Schedule is annexed
(as amended by Amendment No. 1, dated as of June 20, 1997, and as
the same may be further amended, modified or otherwise
supplemented from time to time, the "Employment Agreement"). The
right to receive an amount equal to the appreciation in market
value of one (1) share of the common stock, par value $.001 per
share (the "Common Stock"), of LANCIT MEDIA ENTERTAINMENT, LTD.
(the "Employer"), is referred to herein as a "Unit". All amounts
at any time attributable to the Units shall be and remain the
sole property of the Employer and Executive's rights hereunder
are limited to the right to receive cash and/or Common Stock as
further provided below. The Value Incentive Bonus is and shall be
an employee benefit plan of the Employer.
2. Election to Receive Value Incentive Bonus. Executive may elect to
receive all or a portion of her Value Incentive Bonus at such
time or times as she may desire by electing to convert Units into
compensation as provided in this Schedule. No such election may
be made, however, prior to the earlier to occur of the
Shareholders Meeting (as defined in Paragraph 3(g)(ii) of the
Employment Agreement) or December 31, 1997, except as otherwise
provided in the Employment Agreement. From and after the date the
Units become convertible under the Employment Agreement, Units
may be converted in whole or from time to time in part at any
time before their expiration by giving advance written notice of
Executive's election to convert Units into compensation to the
Chief Financial Officer of the Employer in the form of Exhibit I
annexed to this Schedule A (an "Election Notice") prior to
midnight, New York City time, on March 31, 2007 (the "Expiration
Date"), specifying the number of Units (not to exceed, in the
aggregate, 255,000) being converted.
3. Determination of Value. Upon Executive's conversion of all or
part of the Units, Executive shall be entitled to receive the
economic value of the Units being converted. For each such Units,
that economic value shall be equal to the excess of (i) the "fair
market value" of one share of Common Stock on the date that the
Election Notice is received by the Employer's Chief Financial
Officer (the "Election Date") over (ii) $3.15625 (the "Measuring
Value"); subject, however, to adjustment pursuant to paragraph 6
of this Schedule A. The total economic value of all Units
converted by Executive pursuant to an individual Election Notice
shall be the economic value of each Unit as determined in the
preceding sentence multiplied by the number of Units converted.
For the purposes of this Schedule A, the term "fair market value"
as of any date of a share of Common Stock means the average of
the closing bid and ask quotation for a share of Common Stock as
reported on the principal national securities exchange on which
such shares are listed or, if not so listed, on the National
Association of Securities Dealers, Inc. Automated Quotation
System on the relevant date or, if no such shares were sold on
such date, on the next preceding date on which such shares were
sold or, if no sales shall have occurred within 10 business date
preceding such relevant date, fair market value shall be as
reasonably determined by the Board of Directors of the Employer
in good faith.
4. Payment and/or Issuance of Share Certificates. Full payment of
the aggregate economic value of all Units converted by Executive
pursuant to an individual Election Notice (the "Total Payment")
shall be made by the Employer, either in cash or in shares of
Common Stock or any combination thereof, as the Employer's Board
of Directors may determine in its sole discretion. If all or any
part of the Total Payment due in connection with any conversion
of Units hereunder is paid in shares of Common Stock ("Shares"),
the number of Shares that shall be issued will be determined by
dividing the Total Payment (of the part thereof to be paid in
Shares) by the fair market value of a share of Common Stock on
the Election Date; provided, however, that Executive shall
receive cash in lieu of any fraction of a share of Common Stock
issuable hereunder. Certificates for Shares, if any, issued
hereunder shall be delivered to Executive, subject to the
provisions of Paragraph 6 hereof, as promptly as practicable
thereafter. Employer may place an appropriate legend on any
certificates representing ownership of
Shares to assure compliance with the restrictions on Executive's
right to sell Shares contained in the Employment Agreement.
5. Expiration. Executive's right to elect to convert the Units shall
expire and become null and void in accordance with Paragraph
3(f)(vii) of the Employment Agreement, if applicable.
6. Recapitalization. If the outstanding shares of the Common Stock
of the Employer are subdivided, consolidated, increased,
decreased, changed into or exchanged for a different number or
kind of shares or securities of the Employer through
reorganization, merger, recapitalization, reclassification,
capital adjustment or otherwise, or if the Employer shall issue
Common Stock as a dividend or upon a stock split, then the number
of Units convertible by Executive and/or the Measuring Value
shall be proportionately adjusted. Adjustments under this
Paragraph shall be made by the Employer's independent public
accountants.
7. Wage, FICA and Withholding Taxes. Executive hereby agrees that
there shall be deducted from the payment of the economic value of
any Units converted hereunder the amount necessary to discharge
any Federal, state or local taxes (including any wage withholding
or stock transfer taxes) imposed upon the Employer in respect of
the Units or any payment upon conversion of the Units.
8. Captions. The captions or headings of the paragraphs of this
Schedule A are inserted only as a matter of convenience, and in
no way define, limit or in any other way describe the scope of
this Schedule A or the intent of any provisions hereof.
EXHIBIT I
to Calculation and Payment of
Value Incentive Bonus Schedule A
ELECTION NOTICE
To: LANCIT MEDIA ENTERTAINMENT, LTD.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
I hereby elect to convert ______ Units in accordance with the terms and
conditions described in the Calculation and Payment of Value Incentive Bonus
Schedule to Employment Agreement, as amended by Amendment No. 1, dated as of
June 20, 1997, to which this Election Notice is attached as Exhibit I.
All share certificates that may be issued pursuant to this Election Notice
are to be issued and delivered as follows:
================================================
================================================
Date:______________ Signature: _________________________________
Exhibit A
Non-Qualified Stock Option for 495,000 Shares Dated: June 20, 1997
(the "Date of Grant")
This Option and the Shares issuable upon exercise of this Option are subject to
certain restrictions on transfer described in Sections 5 and 6 hereof, and the
holder of this Option agrees to be bond by such restrictions.
LANCIT MEDIA ENTERTAINMENT, LTD.
STOCK OPTION AGREEMENT
KNOW ALL PERSONS BY THESE PRESENTS, that LANCIT MEDIA ENTERTAINMENT, LTD.,
a New York corporation (the "Company"), acting by its Board of Directors (the
"Board"), hereby grants to XXXXX X. XXXXXXX, residing at 000 Xxxxxxx Xxxx Xxxx,
Xxx Xxxx, Xxx Xxxx 00000 ("Optionee"), pursuant to the 1990 Stock Option Plan
(the "Plan"), in consideration of services to be rendered to the Company, the
right and option (the "Option") to purchase FOUR HUNDRED NINETY- FIVE THOUSAND
(495,000) fully-paid and non-assessable shares (the "Shares") of the Company's
common stock, par value $.001 per share (the "Common Stock"), on the following
terms and conditions (as used throughout, the term "Optionee" shall refer only
to the original grantee of the Option, and shall not include subsequent
authorized holders thereof, such as legatees, personal representatives or
distributees of such grantee or transferees thereof pursuant to a "QDRO" (as
defined in Section 8 below), and the term "Holder" shall refer to any authorized
holder of the Option):
1. Time and Manner of Exercise. Except as hereinafter provided, the
Option granted hereby may not be exercised prior to October 1,
1997. From and after October 1, 1997 (or such earlier date as
this Option may become exercisable pursuant to Section 8(c)), the
Option may be exercised in whole or from time to time in part by
giving advance written notice of such exercise to the Chief
Financial Officer of the Company in the form of Exhibit I annexed
hereto at any time prior to midnight, New York City time, on
March 31, 2007 (the "Expiration Date"), specifying the number of
Shares to be purchased. In no event shall a fraction of a Share
be purchased or issued hereunder. Such notice must be accompanied
by full payment for the Shares to be purchased and any
withholding tax due. If the Company does not receive full payment
for the Shares to be purchased and any withholding tax due within
a reasonable period of time after notice of exercise has been
given by Optionee, the notice of exercise shall be deemed to have
been withdrawn and the Option shall remain in full force and
effect, exercisable in accordance with the terms of this
Agreement without any change in the number of Shares purchasable
upon exercise of the Option, as though such notice of exercise
had never been issued.
2. Exercise Price. The price of the Shares to be purchased pursuant
to the Option shall be $3.15625 per share (the "Exercise Price"),
subject to adjustment pursuant to Section 8 hereof. The aggregate
purchase price of the Shares to be purchased pursuant to any
exercise of the Option shall be equal to the product of the
number of Shares to be purchased multiplied by the Exercise
Price.
3. Payment and Issuance of Share Certificates. Full payment of the
aggregate purchase price for the Shares purchased by Holder and
any withholding taxes due thereon shall be made to the Company,
either in cash or by certified check, bank check, personal check
(in which case the Company reserves the right to withhold
issuance of such Shares until the funds have cleared) or by wire
transfer. If, and only if, the Shares issuable upon exercise of
the Option may not be immediately resold without restriction
under the Securities Act of 1933, as amended (the "Act"), prior
to the date such payment is due, then Holder may pay the full or
a partial amount of the purchase price, but not any withholding
taxes due, in shares of Common Stock of the Company (including
Shares previously issued upon exercise of the Option) valued at
the "fair market value" thereof on the date notice of exercise of
the Option to purchase such Shares is received by the Company.
Certificates for the Shares purchased shall be delivered to
Holder, subject to the provisions of Section 8 hereof, promptly
thereafter. No Shares shall be issued, and no certificates for
Shares shall be delivered, to Optionee until full payment
therefor and of
any withholding tax due thereon has been made. For the purposes
of this Agreement, the term "fair market value" shall have the
meaning assigned to it in the Plan.
4. Expiration. The Option shall expire and become null and void at
the earliest of:
a. the Expiration Date;
b. expiration of the Option pursuant to the provisions of
Section 8 hereof;
c. (i) six (6) months after the termination of Optionee's
employment pursuant to Optionee's employment agreement with
the Company dated as of March 31, 1997 (as amended by
Amendment No. 1, dated as of June 20, 1997, and as the same
may be further amended, modified or otherwise supplemented
from time to time, the "Employment Agreement") if such
termination occurs on or prior to March 31, 2001 other than
by reason of death or "permanent disability" (as defined in
the Employment Agreement);
(ii) one (1) year after the termination of Optionee's
employment pursuant to the Employment Agreement if such
termination occurs on or prior to March 31, 2001 by reason
of death or "permanent disability";
d. one (1) year after the termination of Optionee's employment
pursuant to the Employment Agreement if such termination
occurs for any reason whatsoever after March 31, 2001 and on
or prior to March 31, 2002;
e. two (2) years after the termination of Optionee's employment
pursuant to the Employment Agreement if such termination
occurs for any reason whatsoever after March 31, 2002 and on
or prior to March 31, 2003; or
f. three (3) years after the termination of Optionee's
employment pursuant to the Employment Agreement if such
termination occurs for any reason whatsoever after March 31,
2003.
In the event Optionee's employment is terminated within four (4) years of the
Effective Date of the Employment Agreement other than "For Cause" (as defined in
the Employment Agreement) or in the event Optionee effects a "Resignation For
Cause" (as defined in the Employment Agreement) then, notwithstanding any other
provisions of this or any other agreement dated of even date herewith or prior
hereto, the Option shall expire no earlier than the date which is two (2) years
from the Effective Date of the Employment Agreement with respect to 50% of the
Shares purchasable upon exercise of the Option, the date which is three (3)
years from the Effective Date of the Employment Agreement with respect to an
additional 25% of the Shares purchasable upon exercise of the Option, and the
date which is four (4) years from the Effective Date of the Employment Agreement
with respect to the remaining 25% of the Shares purchasable upon exercise of the
Option.
5. Securities Laws.
a. Optionee acknowledges that Optionee has been informed of, or
is otherwise familiar with, the nature and the limitations
imposed by the Securities Act of 1933, as amended (the
"Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder
(in particular, Rule 144 promulgated under the Act ("Rule
144") and Section 16 of the Exchange Act and Rule l6b-3
promulgated thereunder) and the securities ("Blue Sky") laws
of the state of Optionee's residence, concerning the Shares
issuable upon exercise of the Option and agrees to be bound
by the restrictions embodied in such laws, and the rules and
regulations promulgated thereunder. Unless the Shares to be
issued upon the exercise of the Option have been registered
for resale in accordance with a currently effective
registration statement under the Act (but without prejudice
to any obligations of the Company arising under the
Employment Agreement or the Registration Rights Agreement
referred to therein to register the Shares), the Board may
require, as a condition to the delivery of certificates
representing ownership of the Shares, that the Company
receive appropriate evidence that
Holder is acquiring the Shares for investment and not with a
view to the distribution or public offering of the Shares,
or any interest in the Shares, and a representation to the
effect that Holder shall make no sale or other disposition
of the Shares unless (a) the Company shall have received an
opinion of counsel satisfactory in form and substance to it
that the sale or other disposition may be made without
registration under the then applicable provisions of the Act
and the rules and regulations promulgated thereunder, or (b)
the Shares shall be included in a currently effective
registration statement under the Act. The Company reserves
the right to place a legend on any certificates representing
ownership of Shares to assure compliance with this
paragraph.
b. The Company acknowledges that the Employment Agreement
provides that the Company has registered the Shares under
the Act on a Form S-8 registration statement and will use
reasonable efforts to maintain same in effect. In connection
with such registration, the Company shall prepare and file
and thereafter maintain current and in effect a "reoffer
prospectus" under such registration statement registering
the resale of all the Shares by Optionee. The Company agrees
to use reasonable efforts to make timely filings of its
periodic reports and to take such other actions as may be
necessary or appropriate in order for the Company to remain
qualified to use Form S-8 and such reoffer prospectus as
herein contemplated. The Company's obligations under this
paragraph shall terminate upon the earliest to occur of (i)
the eleventh (11th) anniversary of the Date of Grant, or
(ii) the sale of all of the Shares by Optionee, or (iii) the
date Optionee receives an opinion of counsel (which may be
from counsel to the Company) reasonably acceptable to
counsel for the Optionee that all of the Shares may be sold
under the provisions of paragraph (k) of Rule 144
notwithstanding the fact that a portion of the Shares may
remain unregistered under the Act. Optionee is also entitled
to the benefit of the Registration Rights Agreement dated as
of March 31, 1997 between the Company and Optionee, in
accordance with its terms and the terms of the Employment
Agreement.
6. Non-Transferability; Death or Disability.
a. The Option is granted in recognition of the personal
services of Optionee and Optionee hereby agrees that
Optionee will not directly or indirectly sell, assign,
transfer, pledge, hypothecate, dispose of, encumber or
otherwise grant any interest in the Option other than (i) by
will or by the laws of descent and distribution or (ii)
pursuant to a "Qualified Domestic Relations Order" ("QDRO")
as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), or Title I of the Employee Retirement Income
Security Act of 1974, as amended. The Option may be
exercised during the lifetime of Optionee only by Optionee
or by Optionee's guardian or other legal representative or
by a transferee thereof pursuant to a QDRO (a "Permitted
Transferee").
b. Optionee acknowledges that the Employment Agreement contains
certain restrictions on Optionee's right to sell Shares and
hereby agrees that the Company may place an appropriate
legend on any certificates representing ownership of Shares
to assure compliance with such restrictions.
c. If Optionee shall die, the Option may be exercised by
Optionee's executor, administrator or other legal
representative, or by a Permitted Transferee to whom the
Option was lawfully transferred, if any, at any time prior
to the expiration of the Option pursuant to Section 4
hereof.
d. If Optionee's employment pursuant to the Employment
Agreement is terminated by reason of "permanent disability"
(as defined in the Employment Agreement) the Option may be
exercised by Optionee or by Optionee's guardian or legal
representative, or by a Permitted Transferee to whom the
Option was lawfully transferred, if any, at any time prior
to the expiration of the Option pursuant to Section 4
hereof.
7. Holder Not a Shareholder. The Option shall not entitle Holder to
any dividend, voting or other rights as a shareholder of the
Company or to any notice of proceedings of the Company in respect
of any Shares issuable upon exercise of the Option unless and
until the certificates representing the Shares have been issued
to Holder.
8. Recapitalization and Reorganization.
a. If the outstanding shares of the Common Stock of the Company
are subdivided, consolidated, increased, decreased, changed
into or exchanged for a different number or kind of shares
or securities of the Company through reorganization, merger,
recapitalization, reclassification, capital adjustment or
otherwise, or if the Company shall issue Common Stock as a
dividend or upon a stock split, then the number and kind of
shares then purchasable upon exercise of the Option and the
Exercise Price hereunder shall be proportionately adjusted.
However, no such adjustment shall change the total purchase
price of a complete exercise of the unexercised portion of
the Option. Adjustments under this Section shall be made by
the Company's independent public accountants. In computing
any such adjustments, any fractional share which might
otherwise become subject to the Option shall be eliminated
and paid in cash.
b. In the event of (i) the dissolution or liquidation of the
Company or (ii) a merger or consolidation in which (A) the
Company does not survive as a publicly owned corporation
with securities registered under the Exchange Act and (B)
the agreements governing such merger or consolidation do not
provide for the issuance of substitute options with
substantially equivalent terms as determined by the Board in
lieu of the Option or for the express assumption (within the
meaning of Section 424(a) of the Code) of the Option by the
surviving corporation, the Board shall declare that the
Option shall terminate as of a date to be fixed by the Board
(the "Termination Date"), provided that the Board shall
cause to be delivered not less than thirty (30) days before
the Termination Date written notice of the Termination Date
to Holder and Holder shall have the right, during the Period
between the receipt of the written notice and the
Termination Date to exercise the Option, in whole or in
part, whether or not all or any part of the Option would not
otherwise be exercisable; provided, however, that unless
Optionee shall deliver to the Company written notice to the
contrary at least three (3) business days prior to the
Effective Date, the Optionee and every Holder shall be
deemed to have delivered to the Company a notice of exercise
of the Option, in whole, on the Effective Date. To the
extent that the Option is not exercised in its entirety on
or prior to the Termination Date, the Option and any and all
rights then remaining hereunder shall expire and terminate
as of the Termination Date.
c. Upon a "Change in Control of Employer" (as defined in the
Employment Agreement), the Option, if not already
exercisable in accordance with its terms, shall become
immediately exercisable in whole or in part.
d. In the event of a "Change in Control of Employer" pursuant
to which substitute options are offered to Optionee in place
of the Option herein granted or the surviving corporation
offers to assume the Option, the Board shall cause to be
delivered not less than thirty (30) days before the
effective date of such "Change in Control of Employer" (the
"Effective Date") written notice of the Effective Date to
Optionee and Optionee shall have the right to elect to
accept such substitute options or assumption or to exercise
the Option, in whole or in part, prior to the Effective Date
(and such notice shall so state); provided, however, that
unless Optionee shall deliver to the Company written notice
to the contrary at least three (3) business days prior to
the Effective Date, the Optionee and every Holder shall be
deemed to have rejected any substitute options offered to
Optionee and any offer to assume the Option and to have
delivered to the Company a notice of exercise of the Option,
in whole, on the Effective Date.
9. Reservation of Shares. The Company will at all times reserve and
keep available out of its authorized shares of Common Stock,
solely for issuance upon the exercise of the Option and other
similar options, at least such number of its shares of Common
Stock as shall be issuable upon the exercise of the Option and
all other similar options at the time outstanding.
10. Subject to Plan. The Option has been issued under the Plan. In
addition to the provisions of this Agreement, the Option will be
subject to the power of the Board to interpret the Plan, correct
any defect, supply any omission and reconcile any inconsistency
in the Plan, prescribe, amend and rescind rules and regulations,
forms, notices and agreements relating to it and make all
determinations necessary or advisable for its administration and
to alter, suspend or discontinue the Plan at any time, except
that no such action of the Board may, without the consent of the
Holder alter the terms of, or impair the rights of the Holder
under this Agreement or the Employment Agreement, except pursuant
to Section 8 above. The power of the Board to construe and
administer any options granted prior to the termination or
suspension of the Plan shall nevertheless continue after and
survive such termination or during such suspension.
11. No Employment Agreement. Nothing contained in this Agreement
shall confer upon Optionee the right to be continued as an
employee or as a director of or as a consultant or advisor to the
Company or any subsidiary or affiliate of the Company or shall
interfere in any way with the right of the Company or any
subsidiary or affiliate of the Company lawfully to terminate
Optionee's employment at any time, and no such termination shall
in any way affect any of the rights of the Company set forth in
this Agreement. Nothing herein contained shall in any way affect
the rights of the Company or Optionee arising under the
Employment Agreement.
12. Wage, FICA and Withholding Taxes. Holder hereby agrees that
Holder will make such arrangements as the Company may reasonably
deem necessary to discharge any Federal, state or local taxes
(including any wage withholding or stock transfer taxes) imposed
upon the Company in respect of this Agreement, the Option covered
hereby or the Shares purchasable hereunder. Shares of Common
Stock may not be used to discharge Holder's tax obligations.
Holder may, however, discharge Holder's tax obligations with
respect to any purchase of Shares pursuant to the exercise of the
Option by (i) agreeing to sell the Shares so purchased within the
thirty (30) day period immediately following such purchase, which
period shall be extended by such number of days, if any, during
which such sale cannot be affected by reason of the failure or
inability of the Company to register such Shares under the Act
(as so extended, the "Sale Period") and (ii) delivering to the
Company Optionee's promissory note payable upon the earlier to
occur of (A) such sale of Shares and (B) the expiration of the
Sale Period.
13. Entire Agreement. This Agreement contains the entire agreement of
the parties relative to the subject matter hereof, superseding
and terminating all prior agreements or understandings, whether
oral or written, between the parties hereto relative to the
subject hereof, and this Agreement may not be extended, amended,
modified or supplemented without the written consent of the
parties hereto.
14. Waiver, Modification, Amendment. Except where specific time
limits are herein provided, no delay on the part of either party
hereto in exercising any power or right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of
any power or right hereunder preclude other or further exercise
thereof or the exercise of any other power or right. No waiver,
modification or amendment of this Agreement or any provision
hereof, shall be enforceable against either party hereto unless
in writing, signed by the party against whom such waiver,
modification or amendment is claimed, and with regard to any
waiver, shall be limited solely to the one event.
15. Governing Law. This Agreement and all amendments or charges
relating hereto shall be deemed to have been entered into
pursuant to, and shall be governed by, the laws of the State of
New York.
16. Notices. Notices pursuant hereto shall be given in writing, in
person (against receipt therefor only if requested) or by retired
or certified mail, return receipt requested, and shall be deemed
delivered upon delivery in person or four (4) days after deposit
in the United States mail, postage prepaid, addressed as follows:
If to the Company: LANCIT MEDIA ENTERTAINMENT, LTD.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Financial Officer
If to Optionee: XXXXX X. XXXXXXX
000 Xxxxxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
or to such other address as either party hereto shall designate
to the other party by written notice given in accordance with
this Section.
17. Injunctive Relief. In addition to any other rights or remedies
available to the Company as a result of any breach of Optionee's
covenants under Section 5 hereof, the Company shall be entitled
to enforcement of such covenants by seeking an injunction or a
decree of specific performance from a court of competent
jurisdiction.
18. Captions. The captions or headings of the Sections are inserted
only as a matter of convenience, and in no way define, limit or
in any other way describe the scope of this Agreement or the
intent of any provisions hereof.
19. Optionee Information and Knowledge. Holder hereby certifies that
Holder has read the above Agreement, and understands and agrees
to all of the terms, conditions and statements contained therein,
accepting this Agreement as of the Date of Grant first above
written.
ATTEST: LANCIT MEDIA ENTERTAINMENT, INC.
By:
[Assistant] Secretary Xxxxxxxx X. Xxxxxx, President
XXXXX X. XXXXXXX
EXHIBIT I
to Stock Option Agreement - Exhibit A
EXERCISE NOTICE
To: LANCIT MEDIA ENTERTAINMENT LTD. (the "Company")
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
I hereby elect to purchase __________ shares of Common Stock ("New Shares")
in accordance with the terms and conditions of the Stock Option Agreement to
which this Exercise Notice is attached as Exhibit I (the "Agreement"), and
hereby tender herewith full payment of the purchase piece and all applicable
withholding taxes in the amount of $____________, either in cash or by certified
check, bank check, personal check (in which case the Company reserves the night
to withhold issuance of such New Shares until the funds have cleared) payable to
the order of LANCIT MEDIA ENTERTAINMENT, LTD., or by wire transfer of funds, or,
but only if I am permitted to do so under the Agreement, and only with regard to
the full or partial amount of the purchase price, in negotiable certificates1
for outstanding shares, of Common Stock of the Company ("Old Shares"), valued at
the "fair market value" (as defined in the Agreement) thereof as of the date
this Exercise Notice is received by the Company.
I further request that if the stock certificate(s) for Old Shares being
tendered herewith (if any) is for more shares of Common Stock than are needed to
pay the purchase price, that a new stock certificate for the extra shares
represented by the certificate(s) delivered herewith be issued and delivered to
me.
All share certificates issued pursuant to this Exercise Notice are to be
issued and delivered as follows:
Date:________________ Signature___________________________________________
1 To be negotiable, certificates must be endorsed to LANCIT MEDIA
ENTERTAINMENT, LTD., or in blank, or be accompanied by a stock
power so endorsed.
2 The signature on this notice must correspond with Holder's name
as written on the face of the Agreement in every particular,
without alteration or enlargement or any change whatsoever.
Exhibit B
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, dated as of March 31, 1997 (as amended and restated as of
June 20, 1997, the "Agreement"), between LANCIT MEDIA ENTERTAINMENT, LTD., a New
York corporation (the "Company"), and XXXXX X. XXXXXXX, an individual
("Executive").
W I T N E S S E T H
WHEREAS, the Company and Executive have entered into an employment
agreement dated March 31, 1997 (as amended by Amendment No. 1, dated as of June
20, 1997, and as the same may be further amended, modified, or supplemented from
time to time, the "Employment Agreement"), pursuant to which Executive has been
awarded stock options under the Company's 1990 Stock Option Plan (the "1990 Plan
Options"), stock options under the Company's 1997 Incentive Stock Plan, which is
subject to shareholder approval (the "1997 Plan Options"), and an incentive
value bonus ("IVB") pursuant to which the Executive may receive, in the sole
discretion of the Company, either cash or shares of common stock, par value
$.001 per share (the "Common Stock"), of the Company in satisfaction of the
obligations of the Company with respect to the IVB; and
WHEREAS, the Company has agreed to register such shares of Company Common
Stock as may be issued to Executive upon her exercise of the 1990 Plan Options
or the 1997 Plan Options or in satisfaction of the IVB ("New Shares"), in
accordance with the terms and conditions hereof;
NOW, THEREFORE, the parties hereto agree as follows:
1. Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, all capitalized terms used in this
Agreement shall have the meanings ascribed to such terms in the
Employment Agreement.
2. Registration Rights.
a. Although the Company is under no existing obligation under
the Securities Act of 1933, as amended (the "Securities
Act") or any other domestic or foreign law applicable to the
sale or transfer of securities (collectively, the
"Securities Laws") to file a registration statement or
otherwise resister any New Shares for any purpose, the
Company agrees that if, and only if, the Company (i) has not
registered the New Shares issuable pursuant to the 1997 Plan
Options or the IVB under the Securities Act on Form S-8
within the one hundred seventy (170) day period following
the date of this Agreement, or (ii) thereafter fails or is
unable to maintain such registration statement or the
registration statement covering the 1990 Plan Options in
effect, as contemplated by the Employment Agreement, or
(iii) fails or is unable to file or thereafter maintain in
effect a reoffer prospectus under such registration
statements, as contemplated in the Employment Agreement,
then unless any such failure or inability is the consequence
of a failure on Executive's part to cooperate with the
Company in a reasonable manner, such as (by way of
illustration and not by way of limitation) by failing to
provide information or undertakings reasonably required to
prepare and file a reoffer prospectus, upon the written
request of Executive with respect to all (but not less than
all) of the New Shares which shall have theretofore been
issued to Executive and which are not then covered by a
currently effective registration statement and reoffer
prospectus, the Company will, subject to the limitations set
forth below, use reasonable efforts to cause such New Shares
(herein referred to as the "Securities") to be registered
under the Securities Act for the purposes of permitting the
sale or other disposition by the Executive of all or part of
the Securities to be so registered (a "Holder's Offering");
provided, however, that under no circumstances shall the
Company be required to effect more than three (3) Holder's
Offerings under this Agreement per calendar year; and
provided, further, that neither the provisions of this
Agreement nor the registration of any Securities pursuant
hereto shall waive, or release Executive from, any
restrictions on the sale, transfer, pledge, hypothecation or
other disposition or encumbrance of the New Shares contained
in the Employment Agreement or, in any other way, waive,
modify or amend any provision of the Employment Agreement.
b. The provisions of paragraph (a) above notwithstanding, if
the Board of Directors of the Company (the "Board")
determines in good faith that the filing or effectiveness
of, or sales pursuant to any registration statement
otherwise required to be prepared, filed and made and kept
effective by it pursuant to this Agreement would materially
impede, delay or interfere with any financing, offer or sale
of securities, acquisition, corporate reorganization, share
repurchase, listing or qualification of any of the
Company's securities on any national securities exchange, or
other significant transaction involving the Company or any
of its affiliates or require disclosure of material
information which the Company has a bona fide business
purpose for preserving as confidential, the Company shall be
entitled to postpone, for a reasonable period of time, the
filing or effectiveness of, or suspend the right of
Executive to make sales pursuant to, such registration
statement; provided, however, that the duration of such
postponement or suspension may not exceed ninety (90) days
after the cessation of the circumstances upon which such
postponement or suspension is based. If the Company shall so
postpone the filing or effectiveness of a registration
statement it shall, as promptly as possible, notify
Executive to withdraw the request for registration by giving
written notice to the Company within ten (10) days after
receipt of such notice. Any Holder's Offering as to which
the withdrawal election referred to in the preceding
sentence has been effected shall not be counted for purposes
of determining whether the Company has effected a Holder's
Offering pursuant to paragraph (a) above during such
calendar year.
c. The Company's obligations under Section 3 below shall be
subject to the obligations of the Executive to furnish all
information and materials and to take any and all actions as
may be required under applicable Federal and state
securities laws and regulations requirements of the
Securities and Exchange Commission (the "SEC" or
"Commission") and to obtain acceleration of the effective
date of a registration statement.
3. Company Obligations. If and whenever the Company is required by
the provisions of Section 2 above to effect the registration of
Securities under the Securities Act, the Company will use
reasonable efforts to:
a. Prepare and file with the Commission a registration
statement with respect to such Securities and to cause such
registration statement to become effective and (by preparing
and filing with the SEC such amendments to such registration
statement and supplements to the prospectus, if any,
contained therein as may be necessary) to remain effective
during the period required for the distribution of the
Securities covered by such registration statement; provided,
however, that the Company may deregister any of such
Securities which have not been sold after the earlier to
occur of (i) the date the Executive receives an opinion of
counsel (which may be from counsel to the Company) that all
such securities may be sold under the provisions of SEC Rule
144(k) and (ii) the later to occur of (A) the third
anniversary of the effective date of the registration
statement and (B) the ninety-first (91st) day after the
expiration of any suspension of the right of Executive to
make sales pursuant to such registration statement, if any,
subject, however, to the requirements of Section 2, above;
b. Furnish to the Executive in connection with a Holder's
Offering such reasonable number of copies of the
registration statement, summary plan description,
preliminary prospectus, final prospectus and other documents
as may reasonably be requested in order to facilitate the
marketing of such Securities;
c. Register or qualify such Securities under the securities or
"blue sky" laws of such jurisdiction within the United
States as the Executive may reasonably request; provided
that the Company shall not be required to consent to general
service of process for all purposes in any jurisdiction
where it is not then qualified to do business as a foreign
corporation;
d. Promptly notify the Executive, promptly after the Company
shall receive notice thereof, of the time when such
registration statement has become effective or a supplement
to any prospectus forming a part of such registration
statement has been filed;
e. Notify the Executive, during any period during which
Securities may be distributed pursuant to a Holder's
Offering and a prospectus relating to such registration
statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then
in effect, if any, includes an untrue statement of a
material fact or omits to state a material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances then existing, not
misleading, and at the request of the Executive prepare and
furnish to the Executive a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers
of such Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a
material fact required to be stated
therein or necessary to make the statements therein, in
light of the circumstances then existing, not misleading;
f. In the case of an underwritten offering, enter into and
perform its obligations under an underwriting agreement with
the managing underwriter of such offering, in usual and
customary form, including, without limitation, customary
indemnification and contribution obligations, and in the
case of any non-underwritten offering, provide to
broker-dealers participating in any distribution of
Securities reasonable indemnification substantially similar
to that provided by Section 6 hereof whenever requested to
do so;
g. Promptly notify the Executive (or, in the event of an
underwritten offering, the managing underwriters) of the
issuance by the SEC of any stop order or other suspension of
effectiveness of the registration statement, and make every
reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement
at the earliest possible time;
h. Permit counsel for the Executive to review the registration
statement and all amendments and supplements thereto for a
reasonable period of time prior to their filing with the
SEC, and not to file any document in a form to which such
counsel reasonably objects;
i. Make generally available to its security holders as soon as
practical, but not later than 90 days after the close of the
period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the
Securities Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter
next following the effective date of the registration
statement;
j. Make available for inspection by the Executive, any
underwriter participating in any disposition pursuant to the
registration statement, and any attorney, accountant, or
other agent retained by the Executive or any such
underwriter (collectively, the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents
and properties of the Company, as shall be reasonably
necessary to enable each Inspector to exercise its due
diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably
required by any such Inspector in connection with the
registration statement;
k. Use reasonable efforts either to (i) cause all the
Securities covered by the registration statement to be
listed on a national exchange and on each additional
national securities exchange on which similar securities
issued by the Company are then listed, if any, if the
listing of such Securities is then permitted under the rules
of such exchange or (ii) secure designation of all the
Securities covered by the registration statement as a Nasdaq
"National Market Security" within the meaning of Rule 11a2-1
of the SEC and the quotation of the Securities on the Nasdaq
National Market System;
l. Provide a transfer agent and registrar, which may be a
single entity, for the Securities not later than the
effective date of the registration statement;
m. Cooperate with the Executive and the managing underwriter or
underwriters, if any, in a reasonable manner to facilitate
the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing Securities to
be sold pursuant to the registration statement and enable
such certificates to be in such denominations or amounts, as
the case may be, and registered in such names as the
managing underwriter or underwriters, if any, or the
Executive may reasonably request; and
n. Take all other reasonable actions necessary and appropriate
for the Company to take to expedite and facilitate
disposition by the Executive of the Securities pursuant to
the registration statement.
4. Executive's Obligations. The Executive's right to have the
Securities included in a registration statement pursuant to the
provisions of Section 2 above shall be subject to the following
further conditions:
a. The Executive shall have furnished to the Company in writing
such information, agreements and documents regarding the
Executive and any distribution of New Shares proposed by her
as the Company, the managing underwriter(s) of any proposed
issuance of securities by or on behalf of the Company, if
any, and its counsel may reasonably request; and
b. The Executive shall have executed and delivered to the
Company such written undertakings as the Company and its
counsel may reasonably require in order to assure full
compliance with Applicable provisions of the Securities Act
and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which may include, without limitation,
undertakings not to buy any securities of the same class as
the Securities or to solicit such purchases by others until
Executive's distribution of Securities is completed and
otherwise to comply with the SEC's anti-manipulation rules,
and to inform any exchange upon which the Company's Common
Stock may be traded and the managing underwriter(s) or
broker(s) participating in Executive's distribution of New
Shares of the substance, of the foregoing undertakings and
of the restrictions on Executive's right to sell Shares
contained in the Employment Agreement.
5. Fees and Costs.
a. All fees and costs relating to each Holder's Offering shall
be borne by the Company, except that the Executive shall
bear all brokerage and underwriting fees, commissions and
discounts attributable to the New Shares offered for sale
for the account of the Executive.
b. The fees and costs of registration to be borne by the
Company as provided above, shall include, without
limitation, all registration, filing and NASD fees, printing
expenses, fees and disbursements of counsel and accountants
for the Company, legal fees and disbursements and other
expenses of complying with the state securities or "blue
sky" laws of the jurisdiction in which the Securities to be
offered are to be registered or qualified, and premiums and
other costs of policies of insurance, if any, against
liability arising out of such public offering.
6. Indemnification and Contribution.
a. In connection with any Holder's Offering, the Company will,
to the extent permitted by law, indemnify and hold harmless
the Executive from and against, and will reimburse the
Executive with respect to, any and all losses, damages,
costs and expenses the Executive may suffer, insofar as such
losses, damages, costs or expenses arise out of or are based
upon any untrue or alleged untrue statement of any material
fact contained in any such registration statement, any
prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading and shall reimburse the Executive for
any legal or any other expenses reasonably incurred in
connection with investigating or defending any such loss,
damage, cost or expense; provided, however, that the Company
will not be liable in any such case to the extent that any
such loss, damage, cost or expense arises out of or is based
upon an untrue statement or alleged untrue statement of
material fact or omission or alleged omission to state a
material fact made in conformity with information furnished
to the Company by the Executive. Such indemnity shall remain
in full force and effect regardless of any investigation
made by or on behalf of the Executive and shall survive the
transfer of such securities by such Executive.
b. Promptly after receipt by an indemnified party under the
provisions of this Section of notice of the commencement of
any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim
thereof is to be made against the indemnifying party
pursuant to the provisions of this Section, notify the
indemnifying party of the commencement thereof, but the
failure of any indemnified party to provide such notice
shall not relieve the indemnifying party of its obligations
under this Section 6 except to the extent that the
indemnifying party is materially prejudiced thereby, and
shall not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise than
under this Section 6. In case such action is brought against
any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it
may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party,
and if, but only if, such counsel will not be required to
represent parties with actual differing interests, and,
after notice from the indemnifying party to such
indemnifying party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expense
subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable
costs of investigation; provided, however, than an
indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel
for the indemnified party, representation of such
indemnified party by the counsel retained by the indemnified
party would be inappropriate due to actual or potential
differing, interests between such indemnified party and any
other party represented by such counsel in such proceedings.
No indemnifying party shall be liable to an indemnified
party for any settlement or compromise of any action or
claim to which the indemnifying party has not consented. The
indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage
or liability is incurred and is due and payable.
c. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in
this Section is for any reason held to be unenforceable
although applicable in accordance with its terms, then the
Company agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under
this Section 6 to the fullest extent permitted by law, and
the Executive shall be liable for contribution only to the
extent that any costs, expenses or judgments described
herein (after deducting any contribution, if any, received
by the Company from persons other than the Executive who may
also be liable for contribution) are determined by a court
(or the parties to any settlement) to have arisen out of or
to have been based upon any untrue or alleged untrue
statement of any material fact contained in a registration
statement, any prospectus contained therein or any amendment
or supplement thereto, or upon the omission to state therein
a material fact required to be stated therein or necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading,
made in reliance upon and in conformity with written
information furnished to the Company by the Executive
specifically stating that it is for use in such registration
statement, prospectus, amendment or supplement or document
incorporated by reference into any of the foregoing.
Notwithstanding the foregoing, the liability of the
Executive shall be limited to the aggregate offering price
of the Securities sold by Executive under such registration
statement pursuant to Section 2 hereof.
d. The Company and the Executive agree that it would not be
just and equitable if contribution pursuant to paragraph (c)
above were determined by pro rata allocation or by any other
method of allocation inconsistent with the equitable
considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages,
liabilities, or judgments referred to in the immediately
preceding paragraphs shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the
meanings of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
7. Termination. This Agreement and the rights granted under Section
2 hereof shall terminate on the earliest to occur of (i) the
eleventh (11th) anniversary of the date hereof or (ii) the sale
of all of the New Shares by the Executive, or (iii) the date the
Executive receives an opinion of counsel (which may be from
counsel to the Company) reasonably acceptable to counsel for the
Executive that all of the New Shares may be sold under the
provisions of SEC Rule 144(k) notwithstanding the fact that a
portion of the New Shares may remain unregistered under the
Securities Act; provide, however, that the Company may elect, in
its sole discretion, to include any remaining unregistered New
Shares in one or more subsequently filed registration statements
registering securities of the Company upon such terms and
conditions upon which the Company and the Executive shall then
mutually agree.
8. Miscellaneous.
a. Notices. All notices under this Agreement shall be in
writing and shall be effective (i) upon personal delivery
against receipt therefor, or (ii) if sent by mail three (3)
business days after deposit in the United States, Postal
Service, first-class, postage prepaid, registered or
certified, return receipt requested. All notices given
hereunder shall be addressed:
(i) in the case of the Company to:
Lancit Media Entertainment, Ltd.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Financial Officer
with a copy to:
Rubin, Bailin, Ortoli, Mayer, Xxxxx & Xxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx, Esq.
or
(ii) in the case of Executive, to:
Xxxxx X. Xxxxxxx
000 Xxxxxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxx
KLS Professional Advisors Group, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address or to such other person as the
Company or Executive shall have last designated by notice to
the other parties hereto.
b. Integration and Modification. This Agreement contains the
entire agreement among the parties hereto with respect to
the transactions contemplated hereby and there are no
agreements, warranties or representations which are not set
forth herein. All prior negotiations, agreements and
understandings are superseded hereby. This Agreement may not
be modified or amended except by an instrument in writing,
signed by or on behalf of the parties hereto.
c. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the
State of New York, without giving effect to the principles
of conflicts of laws thereof.
d. Binding Effect; Successor's Undertakings. This Agreement
shall be binding upon the parties and inure to the benefit
of the successors, legal representatives and assigns of the
parties hereto. Neither this Agreement nor all or any part
of the rights granted hereunder may be assigned by the
Executive without the prior written consent of the Company,
except to a "permitted transferee" (as defined in the
agreements covering the 1990 Plan Options and the 1997 Plan
Options or the IVB, as applicable); provided, however, that
no assignment shall require the Company to effect more
Holder's Offerings than are permitted pursuant to Section 2
above during the term of this Agreement regardless of the
number of persons to whom the Executive may have assigned
part of her rights hereunder following receipt of the
Company's consent thereto. Each successor, legal
representative and assignee of the Executive shall, as a
condition to the extension of the rights of Executive
hereunder to such successor, legal representative or assign,
execute a written undertaking, in form and substance
satisfactory to the Company and its counsel, to observe and
perform all of the obligations of Executive under this
Agreement and in all other respects to be bound hereby.
e. Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed
an original but all of which together shall constitute one
and the same instrument.
f. Headings. The Section and Paragraph headings in this
Agreement are for convenience of reference only and shall
not be deemed to alter or affect any provision hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
LANCIT MEDIA ENTERTAINMENT, LTD.
By:
Xxxxxxxx X. Xxxxxx, President
Xxxxx X. Xxxxxxx
Exhibit C
Non-Qualified Stock Option for 255,000 Shares Dated: June 20, 1997
(the "Date of Grant")
This Option and the Shares issuable upon exercise of this Option are subject to
certain restrictions on transfer described in Sections 5 and 6 hereof, and the
holder of this Option agrees to be bond by such restrictions.
LANCIT MEDIA ENTERTAINMENT, LTD.
STOCK OPTION AGREEMENT
KNOW ALL PERSONS BY THESE PRESENTS, that LANCIT MEDIA ENTERTAINMENT, LTD.,
a New York corporation (the "Company"), acting by its Board of Directors (the
"Board"), hereby grants to XXXXX X. XXXXXXX, residing at 000 Xxxxxxx Xxxx Xxxx,
Xxx Xxxx, Xxx Xxxx 00000 ("Optionee"), pursuant to the Company's 1997 Incentive
Stock Plan (the "Plan"), in consideration of services to be rendered to the
Company, the right and option (the "Option") to purchase TWO HUNDRED FIFTY-FIVE
THOUSAND (255,000) fully-paid and non-assessable shares (the "Shares") of the
Company's common stock, par value $.001 per share (the "Common Stock"), on the
following terms and conditions (as used throughout, the term "Optionee" shall
refer only to the original grantee of the Option, and shall not include
subsequent authorized holders thereof, such as legatees, personal
representatives or distributees of such grantee, and the term "Holder" shall
refer to any authorized holder of the Option):
1. Time and Manner of Exercise. The Option herein granted is subject
to approval or ratification by the Company's shareholders in
compliance with Section 505 of the Business Corporation Law of
the State of New York on or prior to December 31, 1997, and may
not be exercised unless such approval or ratification has been
obtained on or prior to such date. The Option may not be
exercised prior to October 1, 1997, except as hereinafter
provided. From and after the later to occur of October 1, 1997
(or such earlier date as this Option may become exercisable
pursuant to Section 8(c)) and the receipt of such shareholder
approval or ratification, the Option may be exercised in whole or
from time to time in part by giving advance written notice of
such exercise to the Chief Financial Officer of the Company in
the form of Exhibit I annexed hereto at any time prior to
midnight, New York City time, on March 31, 2007 or such earlier
date as may be specified under Section 4 hereof (the "Expiration
Date"), specifying the number of Shares to be purchased. In no
event shall a fraction of a Share be purchased or issued
hereunder. Such notice must be accompanied by full payment for
the Shares to be purchased and any withholding tax due. If the
Company does not receive full payment for the Shares to be
purchased and any withholding tax due within a reasonable period
of time after notice of exercise has been given by Optionee, the
notice of exercise shall be deemed to have been withdrawn and the
Option shall remain in full force and effect, exercisable in
accordance with the terms of this Agreement without any change in
the number of Shares purchasable upon exercise of the Option, as
though such notice of exercise had never been issued.
2. Exercise Price. The price of the Shares to be purchased pursuant
to the Option shall be $3.15625 per share (the "Exercise Price"),
subject to adjustment pursuant to Section 8 hereof. The aggregate
purchase price of the Shares to be purchased pursuant to any
exercise of the Option shall be equal to the product of the
number of Shares to be purchased multiplied by the Exercise
Price.
3. Payment and Issuance of Share Certificates. Full payment of the
aggregate purchase price for the Shares purchased by Holder and
any withholding taxes due thereon shall be made to the Company,
either in cash or by certified check, bank check, personal check
(in which case the Company reserves the right to withhold
issuance of such Shares until the funds have cleared) or by wire
transfer. If, and only if, the Shares issuable upon exercise of
the Option may not be immediately resold without restriction
under the Securities Act of 1933, as amended (the "Act"), prior
to the date such payment is due, then Holder may pay the full or
a partial amount of the purchase price, but not any withholding
taxes due in shares of Common Stock of the Company (including
Shares previously issued upon exercise of the Option) valued at
the "fair market value" thereof on the date notice of exercise of
the Option to purchase such Shares is received by the Company.
Certificates for the Shares purchased shall be delivered to
Holder, subject to the provisions of Section 8 hereof, promptly
thereafter. No Shares shall be issued, and no certificates for
Shares shall be delivered, to Optionee until full payment
therefor and of
any withholding tax due thereon has been made. For the purposes
of this Agreement, the term "fair market value" shall have the
meaning assigned to it in the Plan.
4. Expiration. The Option shall expire and become null and void at
the earliest of:
a. the adjournment of the first meeting of the Company's
shareholders to be held after the date first above written
unless the Option is approved or ratified by the
shareholders at such meeting;
b. January 1, 1998 (or such later date as may be mutually
agreed in writing by the Company and Optionee), unless the
Option or the Plan is ratified or approved by the Company's
shareholders at a meeting held prior to such date;
c. March 31, 2007;
d. expiration of the Option pursuant to the provisions of
Section 8 hereof;
e. (i) six (6) months after the termination of Optionee's
employment pursuant to Optionee's employment agreement with
the Company dated as of March 31, 1997 (as amended by
Amendment No. 1, dated as of June 20, 1997, and as the same
may be further amended, modified or otherwise supplemented
from time to time, the "Employment Agreement") if such
termination occurs on or prior to March 31, 2001 other than
by reason of death or "permanent disability" (as defined in
the Employment Agreement);
(ii) one (1) year after the termination of Optionee's
employment pursuant to the Employment Agreement if such
termination occurs on or prior to March 31, 2001 by reason
of death or "permanent disability";
f. one (1) year after the termination of Optionee's employment
pursuant to the Employment Agreement if such termination
occurs for any reason whatsoever after March 31, 2001 and on
or prior to March 31, 2002;
g. two (2) years after the termination of Optionee's employment
pursuant to the Employment Agreement if such termination
occurs for any reason whatsoever after March 31, 2002 and on
or prior to March 31, 2003; or
h. three (3) years after the termination of Optionee's
employment pursuant to the Employment Agreement if such
termination occurs for any reason whatsoever after March 31,
2003.
In the event Optionee's employment is terminated within four (4)
years of the Effective Date of the Employment Agreement other
than "For Cause" (as defined in the Employment Agreement) or in
the event Optionee effects a "Resignation For Cause" (as defined
in the Employment Agreement) then, notwithstanding any other
provisions of this or any other agreement dated of even date
herewith or prior hereto, the Option shall expire no earlier than
the date which is two (2) years from the Effective Date of the
Employment Agreement with respect to 50% of the Shares
purchasable upon exercise of the Option, the date which is three
(3) years from the Effective Date of the Employment Agreement
with respect to an additional 25% of the Shares purchasable upon
exercise of the Option, and the date which is four (4) years from
the Effective Date of the Employment Agreement with respect to
the remaining 25% of the Shares purchasable upon exercise of the
Option.
5. Securities Laws.
a. Optionee acknowledges that Optionee has been informed of, or
is otherwise familiar with, the nature and the limitations
imposed by the Securities Act of 1933, as amended (the
"Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder
(in particular, Rule 144 promulgated under the Act ("Rule
144") and Section 16 of the Exchange Act and Rule l6b-3
promulgated thereunder) and the securities ("Blue Sky") laws
of the state of Optionee's residence, concerning the Shares
issuable upon exercise of the Option and agrees to be bound
by the restrictions embodied in such laws, and the rules and
regulations promulgated thereunder. Unless the Shares to be
issued upon the exercise of the Option have been registered
for resale in
accordance with a currently effective registration statement
under the Act (but without prejudice to any obligations of
the Company arising under the Employment Agreement or the
Registration Rights Agreement referred to therein to
register the Shares), the Board may require, as a condition
to the delivery of certificates representing ownership of
the Shares, that the Company receive appropriate evidence
that Holder is acquiring the Shares for investment and not
with a view to the distribution or public offering of the
Shares, or any interest in the Shares, and a representation
to the effect that Holder shall make no sale or other
disposition of the Shares unless (a) the Company shall have
received an opinion of counsel satisfactory in form and
substance to it that the sale or other disposition may be
made without registration under the then applicable
provisions of the Act and the rules and regulations
promulgated thereunder, or (b) the Shares shall be included
in a currently effective registration statement under the
Act. The Company reserves the right to place a legend on any
certificates representing ownership of Shares to assure
compliance with this paragraph.
b. The Company acknowledges that the Employment Agreement
provides that the Company will seek to register the Shares
under the Act on a Form S-8 registration statement and
thereafter use reasonable efforts to maintain same in
effect. In connection with such registration, the Company
shall prepare and file and thereafter maintain current and
in effect a "reoffer prospectus" under such registration
statement registering the resale of all the Shares by
Optionee. The Company agrees to use reasonable efforts to
make timely filings of its periodic reports and to take such
other actions as may be necessary or appropriate in order
for the Company to remain qualified to use Form S-8 and such
reoffer prospectus as herein contemplated. The Company's
obligations under this paragraph shall terminate upon the
earliest to occur of (i) the eleventh (11th) anniversary of
the Date of Grant, or (ii) the sale of all of the Shares by
Optionee, or (iii) the date Optionee receives an opinion of
counsel (which may be from counsel to the Company)
reasonably acceptable to counsel for the Optionee that all
of the Shares may be sold under the provisions of paragraph
(k) of Rule 144 notwithstanding the fact that a portion of
the Shares may remain unregistered under the Act. Optionee
is also entitled to the benefit of the Registration Rights
Agreement dated as of March 31, 1997 between Optionee and
the Company, in accordance with its terms and the terms of
the Employment Agreement.
6. Non-Transferability; Death or Disability.
a. The Option is granted in recognition of the personal
services of Optionee and Optionee hereby agrees that
Optionee will not directly or indirectly sell, assign,
transfer, pledge, hypothecate, dispose of, encumber or
otherwise grant any interest in the Option other than by
will or by the laws of descent and distribution. The Option
may be exercised during the lifetime of Optionee only by
Optionee or by Optionee's guardian or other legal
representative (a "Permitted Transferee").
b. Optionee acknowledges that the Employment Agreement contains
certain restrictions on Optionee's right to sell Shares and
hereby agrees that the Company may place an appropriate
legend on any certificates representing ownership of Shares
to assure compliance with such restrictions.
c. If Optionee shall die, the Option may be exercised by
Optionee's executor, administrator or other legal
representative, or by a Permitted Transferee to whom the
Option was lawfully transferred, if any, at any time prior
to the expiration of the Option pursuant to Section 4
hereof.
d. If Optionee's employment pursuant to the Employment
Agreement is terminated by reason of "permanent disability"
(as defined in the Employment Agreement) the Option may be
exercised by Optionee or by Optionee's guardian or legal
representative, or by a Permitted Transferee to whom the
Option was lawfully transferred, if any, at any time prior
to the expiration of the Option pursuant to Section 4
hereof.
7. Holder Not a Shareholder. The Option shall not entitle Holder to
any dividend, voting or other rights as a shareholder of the
Company or to any notice of proceedings of the Company in respect
of any Shares issuable upon exercise of the Option unless and
until the certificates representing the Shares have been issued
to Holder.
8. Recapitalization and Reorganization.
a. If the outstanding shares of the Common Stock of the Company
are subdivided, consolidated, increased, decreased, changed
into or exchanged for a different number or kind of shares
or securities of the Company through reorganization, merger,
recapitalization, reclassification, capital adjustment or
otherwise, or if the Company shall issue Common Stock as a
dividend or upon a stock split, then the number and kind of
shares then purchasable upon exercise of the Option and the
Exercise Price hereunder shall be proportionately adjusted.
However, no such adjustment shall change the total purchase
price of a complete exercise of the unexercised portion of
the Option. Adjustments under this Section shall be made by
the Company's independent public accountants. In computing
any such adjustments, any fractional share which might
otherwise become subject to the Option shall be eliminated
and paid in cash.
b. In the event of (i) the dissolution or liquidation of the
Company or (ii) a merger or consolidation in which (A) the
Company does not survive as a publicly owned corporation
with securities registered under the Exchange Act and (B)
the agreements governing such merger or consolidation do not
provide for the issuance of substitute options with
substantially equivalent terms as determined by the Board in
lieu of the Option or for the express assumption (within the
meaning of Section 424(a) of the Code) of the Option by the
surviving corporation, the Board shall declare that the
Option shall terminate as of a date to be fixed by the Board
(the "Termination Date"), provided that the Board shall
cause to be delivered not less than thirty (30) days before
the Termination Date written notice of the Termination Date
to Holder and, provided the Option has theretofore been
approved or ratified by the Company's shareholders as
contemplated by the provisions of Section 1 above, Holder
shall have the right, during the Period between the receipt
of the written notice and the Termination Date to exercise
the Option, in whole or in part, whether or not all or any
part of the Option would not otherwise be exercisable;
provided, however, that unless Optionee shall deliver to the
Company written notice to the contrary at least three (3)
business days prior to the Effective Date, the Optionee and
every Holder shall be deemed to have delivered to the
Company a notice of exercise of the Option, in whole, on the
Effective Date. To the extent that the Option is not
exercised in its entirety on or prior to the Termination
Date, the Option and any and all rights then remaining
hereunder shall expire and terminate as of the Termination
Date.
c. Provided the Option or the Plan has been approved or
ratified by the Company's shareholders as contemplated by
the provisions of Section 1 above, upon a "Change in Control
of Employer", the Option, if not already exercisable in
accordance with its terms, shall become immediately
exercisable in whole or in part.
d. In the event of a "Change in Control of Employer" pursuant
to which substitute options are offered to Optionee in place
of the Option herein granted or the surviving corporation
offers to assume the Option, the Board shall cause to be
delivered not less than thirty (30) days before the
effective date of such "Change in Control of Employer" (the
"Effective Date") written notice of the Effective Date to
Optionee and provided the Option has theretofore been
approved or ratified by the Company's shareholders as
contemplated by the provisions of Section 1 above, Optionee
shall have the right to elect to accept such substitute
options or assumption or to exercise the Option, in whole or
in part, prior to the Effective Date (and such notice shall
so state); provided, however, that unless Optionee shall
deliver to the Company written notice to the contrary at
least three (3) business days prior to the Effective Date,
the Optionee and every Holder shall be deemed to have
rejected any substitute options offered to Optionee and any
offer to assume the Option and to have delivered to the
Company a notice of exercise of the Option, in whole, on the
Effective Date.
9. Reservation of Shares. The Company will at all times reserve and
keep available out of its authorized shares of Common Stock,
solely for issuance upon the exercise of the Option and other
similar options, at least such number of its shares of Common
Stock as shall be issuable upon the exercise of the Option and
all other similar options at the time outstanding.
10. Subject to Plan. The Option has been issued under the Plan. In
addition to the provisions of this Agreement, the Option will be
subject to the power of the Board or the Committee, as the case
may be, to interpret the Plan, correct any defect, supply any
omission and reconcile any inconsistency in the Plan, prescribe,
amend and rescind rules and regulations, forms, notices and
agreements relating to it and make all determinations necessary
or advisable for its administration and to alter, suspend or
discontinue the Plan at any time, except that no such action of
the Board or the Committee, as the case may be, may, without the
consent of the Holder alter the terms of, or impair the
rights of the Holder under this Agreement or the Employment
Agreement, except pursuant to Section 8 above. The power of the
Board or the Committee, as the case may be, to construe and
administer any options granted prior to the termination or
suspension of the Plan shall nevertheless continue after and
survive such termination or during such suspension.
11. No Employment Agreement. Nothing contained in this Agreement
shall confer upon Optionee the right to be continued as an
employee or as a director of or as a consultant or advisor to the
Company or any subsidiary or affiliate of the Company or shall
interfere in any way with the right of the Company or any
subsidiary or affiliate of the Company lawfully to terminate
Optionee's employment at any time, and no such termination shall
in any way affect any of the rights of the Company set forth in
this Agreement. Nothing herein contained shall in any way affect
the rights of the Company or Optionee arising under the
Employment Agreement.
12. Wage, FICA and Withholding Taxes. Holder hereby agrees that
Holder will make such arrangements as the Company may reasonably
deem necessary to discharge any Federal, state or local taxes
(including any wage withholding or stock transfer taxes) imposed
upon the Company in respect of this Agreement, the Option covered
hereby or the Shares purchasable hereunder. Shares of Common
Stock may not be used to discharge Holder's tax obligations.
Holder may, however, discharge Holder's tax obligations with
respect to any purchase of Shares pursuant to the exercise of the
Option by (i) agreeing to sell the Shares so purchased within the
thirty (30) day period immediately following such purchase, which
period shall be extended by such number of days, if any, during
which such sale cannot be affected by reason of the failure or
inability of the Company to register such Shares under the Act
(as so extended, the "Sale Period") and (ii) delivering to the
Company Optionee's promissory note payable upon the earlier to
occur of (A) such sale of Shares and (B) the expiration of the
Sale Period.
13. Entire Agreement. This Agreement contains the entire agreement of
the parties relative to the subject matter hereof, superseding
and terminating all prior agreements or understandings, whether
oral or written, between the parties hereto relative to the
subject hereof, and this Agreement may not be extended, amended,
modified or supplemented without the written consent of the
parties hereto.
14. Waiver, Modification, Amendment. Except where specific time
limits are herein provided, no delay on the part of either party
hereto in exercising any power or right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of
any power or right hereunder preclude other or further exercise
thereof or the exercise of any other power or right. No waiver,
modification or amendment of this Agreement or any provision
hereof, shall be enforceable against either party hereto unless
in writing, signed by the party against whom such waiver,
modification or amendment is claimed, and with regard to any
waiver, shall be limited solely to the one event.
15. Governing Law. This Agreement and all amendments or charges
relating hereto shall be deemed to have been entered into
pursuant to, and shall be governed by, the laws of the State of
New York.
16. Notices. Notices pursuant hereto shall be given in writing, in
person (against receipt therefor only if requested) or by retired
or certified mail, return receipt requested, and shall be deemed
delivered upon delivery in person or four (4) days after deposit
in the United States mail, postage prepaid, addressed as follows:
If to the Company: LANCIT MEDIA ENTERTAINMENT, LTD.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Financial Officer
If to Optionee: XXXXX X. XXXXXXX
000 Xxxxxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
or to such other address as either party hereto shall designate
to the other party by written notice given in accordance with
this Section.
17. Injunctive Relief. In addition to any other rights or remedies
available to the Company as a result of any breach of Optionee's
covenants under Section 5 hereof, the Company shall be
entitled to enforcement of such covenants by seeking an
injunction or a decree of specific performance from a court of
competent jurisdiction.
18. Captions. The captions or headings of the Sections are inserted
only as a matter of convenience, and in no way define, limit or
in any other way describe the scope of this Agreement or the
intent of any provisions hereof.
19. Optionee Information and Knowledge. Holder hereby certifies that
Holder has read the above Agreement, and understands and agrees
to all of the terms, conditions and statements contained therein,
accepting this Agreement as of the Date of Grant first above
written.
ATTEST: LANCIT MEDIA ENTERTAINMENT, INC.
______________________________________ By: ______________________________
[Assistant] Secretary Xxxxxxxx X. Xxxxxx, President
------------------------------
XXXXX X. XXXXXXX
EXHIBIT I
to Stock Option Agreement - Exhibit C
EXERCISE NOTICE
To: LANCIT MEDIA ENTERTAINMENT LTD. (the "Company")
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chief Financial Officer
I hereby elect to purchase __________ shares of Common Stock ("New Shares")
in accordance with the terms and conditions of the Stock Option Agreement to
which this Exercise Notice is attached as Exhibit I (the "Agreement"), and
hereby tender herewith full payment of the purchase piece and all applicable
withholding taxes in the amount of $____________, either in cash or by certified
check, bank check, personal check (in which case the Company reserves the night
to withhold issuance of such New Shares until the funds have cleared) payable to
the order of LANCIT MEDIA ENTERTAINMENT, LTD., or by wire transfer of funds, or,
but only if I am permitted to do so under the Agreement, and only with regard to
the full or partial amount of the purchase price, in negotiable certificates1
for outstanding shares, of Common Stock of the Company ("Old Shares"), valued at
the "fair market value" (as defined in the Agreement) thereof as of the date
this Exercise Notice is received by the Company.
I further request that if the stock certificate(s) for Old Shares being
tendered herewith (if any) is for more shares of Common Stock than are needed to
pay the purchase price, that a new stock certificate for the extra shares
represented by the certificate(s) delivered herewith be issued and delivered to
me.
All share certificates issued pursuant to this Exercise Notice are to be
issued and delivered as follows:
Date:______________ Signature________________________________
--------
1 To be negotiable, certificates must be endorsed to LANCIT MEDIA ENTERTAINMENT,
LTD., or in blank, or be accompanied by a stock power so endorsed.
2 The signature on this notice must correspond with Holder's name as written on
the face of the Agreement in every particular, without alteration or
enlargement or any change whatsoever.
