EXHIBIT 10.2(a)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made as of the 21st day of December, 1998,
between Caribiner International, Inc., a Delaware corporation (hereinafter
called the "Corporation"), and Xxxxxxxxxxx X. Xxxxxxxx, the Corporation's
President and Chief Executive Officer (hereinafter called the "Participant").
WHEREAS, the Corporation desires to give the Participant an opportunity to
participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's common stock, par value $0.01
per share (the "Common Stock"), pursuant to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Grant of Option. Subject to the ratification and approval by the
stockholders of the Corporation, the Corporation hereby grants to the
Participant the right and option (hereinafter called the "Option") to
purchase an aggregate of up to Three Hundred Fifty Thousand (350,000)
shares (the "Shares") of Common Stock (such number being subject to
adjustment as provided in paragraph 7 hereof) on the terms and subject to
the conditions herein set forth. Such Option shall vest and become
exercisable as follows: (i) thirty-three and one-third percent (33 1/3%) of
the Option herein granted (for up to One Hundred Sixteen Thousand Six
Hundred Sixty-seven (116,667) shares) shall vest and may be exercised at
any time on or after the first anniversary of this Agreement (unless
terminated earlier pursuant to paragraph 6 hereof), (ii) thirty-three and
one-third percent (33 1/3%) of the Option herein granted (for up to One
Hundred Sixteen Thousand Six Hundred Sixty-seven (116,667) shares) shall
vest and may be exercised on or after the second anniversary of this
Agreement (unless terminated earlier pursuant to paragraph 6 hereof) and
(iii) the remaining thirty-three and one-third percent (33 1/3%) of the
Option herein granted (for up to One Hundred Sixteen Thousand Six Hundred
Sixty-six (116,666) shares) shall vest and may be exercised on or after the
third anniversary of this Agreement (unless terminated earlier pursuant to
paragraph 6 hereof). The Option granted hereby is not intended to be an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the Agreement shall be
construed and interpreted in accordance with such intention.
2. Exercise Price. The exercise price of the Shares covered by the
Option shall be the average of the high and low reported consolidated
trading sales price of the Company's Common Stock as reported on the New
York Stock Exchange on the date first set forth above, which is Eight
Dollars and Fifty-six and One Quarter Cents ($8.5625) per Share.
3. Term of Option. Subject to paragraph 8 hereof, the Option granted
hereby shall be exercisable in accordance with paragraph 1. The
Participant's right to exercise the aforementioned Option shall expire ten
(10) years from the date hereof (the "Expiration Date"). Unless terminated
earlier pursuant to paragraph 6 hereof, the Option may not be exercised
after the Expiration Date.
4. Nontransferability. The Option granted hereby shall not be
transferable otherwise than by will or the laws of descent and
distribution. More particularly (except as provided in the preceding
sentence), the Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of in any way, shall not be assignable
by operation of law, and shall not be subject to execution, attachment or
similar process. Any attempted sale, assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon
the Option, shall be null and void and without effect. The Option may be
exercised by the Participant only during his lifetime or following his
death pursuant to paragraph 6 hereof.
5. Disclosure and Risk.
(a) The Participant represents and warrants to the Corporation as
follows:
(i) The Participant acknowledges that (A) neither the Option nor
the Shares have been registered for resale under the Securities Act of
1933, as amended (the "Securities Act"), and (B) the Corporation is
under no obligation to effect the registration under the Securities Act
of the Option and/or the Shares.
(ii) The Shares will be acquired by the Participant for the
Participant's own account, for investment and not with a view to, or for
resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act.
(iii) The Corporation has made available to the Participant the
opportunity to ask questions of the officers and management of the
Corporation and to acquire information about the business and financial
condition of the Corporation and has, and at the time of exercise of the
Option will have, all information necessary for him to make an informed
investment decision.
(iv) He has received a copy of the Plan.
(b) Each certificate representing the Shares will be endorsed with the
following or a substantially similar legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT COVERING SUCH SECURITIES, OR (ii) THE CORPORATION
RECEIVES A WRITTEN OPINION FROM COUNSEL FOR THE HOLDER OF THESE
SECURITIES, REASONABLY SATISFACTORY TO THE CORPORATION, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION MAY BE MADE PURSUANT TO RULE 144 PROMULGATED UNDER THE
SECURITIES ACT OR IS OTHERWISE EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS."
The Corporation need not allow a transfer of any of the Shares unless
one of the conditions specified in the foregoing legend is satisfied. The
Corporation may also instruct its transfer agent not to allow the transfer
of any of the Shares unless one of the conditions specified in the
foregoing legend is satisfied.
Any legend endorsed on a certificate pursuant to the foregoing
language and the stop transfer instructions with respect to such Shares
shall be removed, and the Corporation shall promptly issue a certificate
without such legend to the holder thereof if (i) the Shares are registered
under the Securities Act and a prospectus meeting the requirements of
Section 10 of the Securities Act is available and has been delivered or
(ii) the holder provides the Corporation with a written opinion from
counsel for such holder of the Shares, reasonably satisfactory to the
Corporation, to the effect that a sale, transfer, assignment, pledge,
hypothecation or other disposition of such Shares may be made without
registration.
6. Termination of Employment; Disability; Retirement; Death.
(a) In the event that the Participant shall cease to be an employee of
the Corporation for any reason other than death, Disability, Retirement,
termination with or without Cause, or resignation for Good Reason (each as
defined below), the Option may be exercised by the Participant (to the
extent that the Participant shall have been entitled to do so as of the
date of the termination of his employment with the Corporation) at any time
prior to the Expiration Date of the Option or within 30 days after
Participant shall so cease to be an employee of the Corporation, whichever
is earlier. So long as the Participant shall continue to be an employee of
the Corporation, the Option shall not be affected by any change of duties
or position. The provisions of this Section 6(a) shall be subject to the
provisions of Section 6(e) below.
(b) In the event of the Disability or Retirement of the Participant,
the unexercised portion of the Option that is held by the Participant on
the date of such Disability or Retirement, whether or not otherwise
exercisable on such date, shall be exercisable one (1) year from the date
of Disability or Retirement. "Disability" shall mean any termination of
employment with the Corporation or a subsidiary because of a long-term or
total disability, as determined by the Compensation Committee (the
"Committee") of the Board of Directors (the "Board") of the Corporation in
its sole discretion. "Retirement" shall mean a termination of employment
with the Corporation or a subsidiary either (i) on a voluntary basis by a
recipient who is at least 65 years of age or (ii) otherwise with the
written consent of the Committee in its sole discretion.
(c) During the lifetime of the Participant, the Option shall be
exercisable only by him (or by his legal guardian or representative). In
the event of the death of the Participant while he is an employee of the
Corporation or any subsidiary, the Option (or unexercised portion thereof)
which is held by the Participant at the date of death, whether or not
exercisable on the date of death, shall be exercisable in accordance with
the terms of this Agreement by the beneficiary designated by the
Participant for such purpose (the "Designated Beneficiary") or if no
Designated Beneficiary shall have been appointed or if the Designated
Beneficiary shall predecease the Participant, by the Participant's personal
representatives, heirs or legatees at any time for a period of one
(1) year after the date of the Participant's death and any portion of the
Option which is not exercised during such one (1) year period shall be
forfeited.
In the event of the death of the Participant following a termination
of employment due to Retirement or Disability, if such death occurs before
the Option (or any portion thereof) is exercised, the Option (or portion
thereof) that is held by the Participant on the date of termination of
employment, whether or not exercisable on such date, shall be exercisable
by such Participant's Designated Beneficiary or if no Designated
Beneficiary shall have been appointed or if the Designated Beneficiary
shall predecease the Participant, by the Participant's personal
representatives, heirs or legatees at any time for a period of one
(1) year after the date of the Participant's death and any portion of the
Option which is not exercised during such one (1) year period shall be
forfeited.
(d) In the event the Participant is terminated for Cause, the Option
shall be exercisable by the Participant (to the extent that the Participant
shall have been entitled to do so as of the date of the termination of his
employment with the Corporation for Cause) at any time prior to the
Expiration Date or within sixty (60) days after Participant's termination
for Cause, whichever is earlier. "Cause" shall have the meaning set forth
in Section 9(a) of that certain Employment Agreement by and between the
Corporation and the Participant, dated as of December 21, 1998.
(e) In the event the Participant is terminated without Cause or if
Participant resigns for Good Reason, automatically upon any such
termination or resignation, any unexercised portion of the Option shall
immediately vest and become fully exercisable (without regard to the
vesting provisions set forth in Paragraph 1 above), and the entire
unexercised portion of the Option shall thereafter be exercisable (in whole
or in part) at any time after such termination or resignation (as the case
may be) prior to the Expiration Date, or for a period of two years after
such termination or resignation (as the case may be), whichever is earlier.
As used herein, the term "Good Reason" shall have the meaning set forth in
Section 9(d) of that certain Employment Agreement by and between the
Corporation and the Participant, dated as of December 21, 1998.
7. Changes in Capital Structure. If all or any portion of the Option
shall be exercised subsequent to any stock dividend, stock split,
recapitalization, merger, consolidation, combination or exchange of shares,
separation, spin-off, reorganization, liquidation or the like occurring
after the date hereof, as a result of which shares of any class shall be
issued in respect of outstanding Common Stock or shares of Common Stock
shall be changed into the same or a different number of shares of the same
or another class or classes, the person or persons exercising the Option
shall receive, for the aggregate price paid upon such exercise,
the aggregate number and class of shares which, if the Shares (as
authorized at the date hereof) had been purchased at the date hereof for
the same aggregate price (on the basis of the price per share set forth in
paragraph 2 hereof) and had not been disposed of, such person or persons
would be holding at the time of such exercise as a result of such purchase
and all such share dividends, stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
spin-offs, reorganizations, liquidations or the like; provided, however,
that no fractional shares shall be issued upon any such exercise, and the
aggregate price paid shall be appropriately reduced on account of any
fractional share not issued. In no event shall any adjustments be made to
the Option as a result of the issuance or redemption of securities of the
Corporation for cash or other consideration, or upon the exercise of any
conversion rights of any securities of the Corporation.
8. Method of Exercising Option. Subject to the terms and conditions
of this Agreement, the Option may be exercised in whole or in part by
giving written notice to the Secretary of the Corporation, at the address
set forth below the Corporation's signature to this Agreement or such other
location as may be designated by the Secretary of the Corporation. Such
notice shall state the Participant's election to exercise the Option and
the number of Shares in respect of which it is being exercised, and shall
be signed by the person or persons so exercising the Option. Payment for
the Shares may be made (i) in cash or (ii) at the option of the Committee,
or, in absence of the Committee, the Board, by delivery of Common Stock
already owned by the Participant and having an aggregate Market Price (as
defined in the Plan) on the date of such delivery equal to the aggregate
exercise price of the shares so purchased or (iii) at the option of the
Committee, or, in absence of the Committee, the Board, by delivery of a
combination of cash and Common Stock having an aggregate Market Price on
the date of such delivery equal to the aggregate exercise price of the
shares so purchased. The Corporation shall deliver a certificate or
certificates representing the shares of Common Stock so purchased as soon
as practicable after the notice of election has been received. In the event
the Option shall be exercised by any person or persons other than the
Participant, the notice of election shall be accompanied by appropriate
proof of the right of such person or persons to exercise the Option. All
shares of Common Stock that shall be purchased upon the exercise of the
Option as provided herein shall be fully paid and nonassessable.
9. Change of Control.
(a) As long as Participant is an employee of the Corporation, a
"Change of Control" of the Corporation shall cause the Option (or the
unexercised portion thereof), whether or not currently exercisable, to
become immediately exercisable, in whole or in part, as of the effective
date of such Change of Control without regard to any vesting provisions or
condition precedent which may be contained in paragraph 1 of this
Agreement. For purposes of this paragraph, a "Change of Control" shall be
deemed to have occurred if (i) any person or "group" (other than Warburg,
Xxxxxx Investors, L.P. or any affiliate thereof) acquires, in a single
transaction or series of related transactions, 50% or more of the
outstanding Common Stock; (ii) during any period of two consecutive years,
individuals that at the beginning of such period constitute the Board cease
for any reason to constitute a majority thereof, unless the election, or
the nomination for election by the stockholders, of each such new director
was approved by a vote of at least two-thirds of the directors then still
in office which were directors at the beginning of the period; or
(iii) the sale of all or substantially all of the assets of the Corporation
(other than to a wholly-owned subsidiary of the Corporation).
(b) Notwithstanding the provisions of paragraph 9(a), in the case that
the Corporation is merged or consolidated with another corporation, or the
assets or stock of the Corporation is acquired by another corporation, or a
separation, reorganization or liquidation of the Corporation occurs, the
Board, or the Board of Directors of any corporation assuming the
obligations of the Corporation hereunder, shall make appropriate provisions
for the protection of the Option by substitution on an equitable basis of
appropriate stock of the Corporation, or appropriate stock of the merged,
consolidated or otherwise reorganized corporation, provided that only the
excess of the aggregate Market Price of the shares subject to the Option
immediately after such substitution over the aggregate exercise price
thereof is not less than the excess of the aggregate Market Price of the
shares subject to the Option immediately before such substitution over the
aggregate exercise price thereof.
10. Optionee Not a Stockholder. The Participant shall not have any
rights as a stockholder with respect to any shares of Common Stock subject
to the Option prior to the date on which he is recorded as the holder of
such shares on the records of the Corporation.
11. Taxes. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number
of shares of Common Stock otherwise deliverable, based upon their fair
market value on the date of exercise, to permit deduction of the amount of
any such withholding taxes from the amount otherwise payable under this
Agreement; (ii) deducting the amount of any such withholding taxes from any
other amount then or thereafter payable to the Participant; or
(iii) requiring the Participant, Designated Beneficiary or legal
representative to pay to the Corporation the amount required or desirable
to enable it to satisfy its withholding obligations as a condition of
releasing the Common Stock.
12. General Provisions.
(a) The Corporation shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of this Option Agreement, shall pay all fees and
expenses necessarily incurred by the Corporation in connection therewith,
and shall use its best efforts to comply with all laws and regulations
which, in the reasonable opinion of counsel to the Corporation, are
applicable thereto.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of
conflicts of laws.
(c) Any notice to be given hereunder by either party to the other
shall be in writing and shall be given either by personal delivery,
facsimile or by mail, registered or certified, postage prepaid, return
receipt requested, or by overnight delivery addressed to the other party at
the respective addresses or facsimile numbers set forth below their
signatures to this Agreement, or at any other address or facsimile number
as such party may hereafter specify in writing.
(d) No amendments or modifications to this Agreement shall be binding
unless made in writing and signed by the parties hereto.
(e) The waiver by either party of a breach of any term or provision of
this Agreement shall not operate or be construed as a waiver of a
subsequent breach of the same provision or of the breach of any other term
or provision of this Agreement.
(f) As used herein, the masculine gender shall include the feminine
and the neuter genders, the neuter shall include the masculine and the
feminine genders, the singular shall include the plural, and the plural
shall include the singular.
(g) The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or
interpretation of this Agreement.
(h) The invalidity or enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(i) NEITHER THE PLAN NOR THIS AGREEMENT SHALL BE (1) CONSTRUED AS
GIVING THE PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE
CORPORATION OR ANY SUBSIDIARY THEREOF OR TO BE ENTITLED TO ANY REMUNERATION
OR BENEFITS NOT SET FORTH IN THE PLAN OR THIS AGREEMENT OR (2) INTERFERE
WITH OR LIMIT THE RIGHT OF THE CORPORATION OR ANY SUBSIDIARY THEREOF TO
MODIFY THE TERMS OF OR TERMINATE THE PARTICIPANT'S EMPLOYMENT AT ANY TIME
WITH OR WITHOUT CAUSE.
13. Incorporation by Reference. Reference is hereby made to the
Corporation's 1996 Stock Option Plan, as amended as of February 27, 1998
(the "Plan"). Although it is expressly understood and agreed that
the Options granted herein are not subject to the Plan, the following
provisions of the Plan are hereby incorporated herein by reference and
shall be deemed to be a part hereof as is set forth fully herein:
Article 3 (Administration) of the Plan; Section 5.6 (Exercise and Payment)
of the Plan; Section 5.8 (Rights as a Stockholder) of the Plan;
Section 5.9 (General Restrictions) of the Plan; Article 6
(Nontransferability of Options) of the Plan; Section 7.6 (Leave of Absence)
of the Plan; Article 8 (Adjustment Upon Changes in Capitalization) of the
Plan and Article 11 (Miscellaneous Provisions) of the Plan. In the event
the Plan is terminated for any reason whatsoever, notwithstanding such
termination, the foregoing provisions shall remain applicable to the terms
and conditions of the Options herein granted as if such Plan had not been
terminated.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
PARTICIPANT
/s/ XXXXXXXXXXX X. XXXXXXXX
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Name: Xxxxxxxxxxx X. Xxxxxxxx
Address:
Facsimile:
CARIBINER INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXX
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Address: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
