Exhibit 17
(Xxxxxx X. Xxxxxxx)
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of July 13, 1998 is made by and between Xxxxx X.
Xxxxxxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxxx X. Xxxx (each, a "Stockholder and
collectively, the "Stockholders") and Xxxxxx X. Xxxxxxx (the "Optionee").
WHEREAS, the Stockholders desire to grant an option to Optionee to purchase
shares of common stock, without par value ("Video Stock"), of Video Services
Corporation ("Video"), upon the terms and conditions set forth herein, and
Optionee desires to accept such option;
NOW, THEREFORE, the Stockholders and Optionee agree as follows:
Section 1. Grant of Option.
Section 1.1 Grant; Grant Date
Each Stockholder hereby grants to Optionee the right to purchase from such
Stockholder all or any part of the number of shares of Video Stock set forth
opposite his name in the table below (the "Option") under the caption "Video
Stock", comprising an aggregate of 100,000 shares of Video Stock, upon the terms
and conditions set forth in this Agreement. The grant date of the Option shall
be the date of this Agreement. Optionee hereby accepts the Option, and agrees to
be bound by all the terms and provisions of this Agreement.
Number of Shares
Name of Video Stock
Xxxxx X. Xxxxxxxxxx 48,720
Xxxxxx X. Xxxxxxxx 48,720
Xxxxxx X. Xxxx 2,560
Section 1.2 Adjustments in Option
In the event that after the date hereof the outstanding shares of Video
Stock subject to the Option are changed into or exchanged for a different number
or kind of shares or securities of the Company, or of another corporation, by
reason of reorganization, merger or other subdivision, consolidation,
recapitalization, reclassification, stock split, stock dividend or combination
of shares or similar event, the Stockholders shall make an appropriate and
equitable adjustment in the number
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of shares that may be purchased upon exercise of such Option and the applicable
purchase price. Any adjustment made by the Stockholders shall be final and
binding upon Optionee and all other interested parties.
Section 1.3 Option Terms
The Option granted under this Agreement shall be subject to the following
terms and conditions:
(a) Price. The exercise price for the Video Stock subject to the Option
shall be $2.6250 per share.
(b) Term. The Option shall expire on the fifth anniversary of the date
hereof.
(c) Vesting. The Option is fully vested and shall become exercisable on the
first day (the "Commencement Date") following the expiration of 366 days from
the date hereof.
(d) Exercise. The Option may be exercised in whole or in part at any time
after the Commencement Date and prior to its expiration or termination, by
providing written notice to each Stockholder of the number of shares of Video
Stock as to which the Option is being exercised, and enclosing payment for the
shares of Video Stock with respect to which the Option is being exercised. Such
payment shall be made in cash. Partial exercise shall be for whole shares of
Video Stock only. Notation of any partial exercise shall be made by the
Stockholders on Schedule I hereto. Any exercise shall be allotted among the
Stockholders in the following ratios:
Percentage of Exercise
Stockholder Applied to his Shares (the "Ratio")
Xxxxx X. Xxxxxxxxxx 48.720%
Xxxxxx X. Xxxxxxxx 48.720%
Xxxxxx X. Xxxx 2.560%
(e) Rights as a Stockholder. The Optionee will have no rights as a
Stockholder or otherwise with respect to any shares of Video Stock covered by
the Option until it has been exercised and any such shares are acquired as a
result thereof.
Section 1.4 Nontransferability
Prior to the expiration of one year from the date hereof, the Option
shall not be transferable other than by will or the applicable laws of descent
and distribution, and no transfer so effected shall be effective to bind the
Stockholders unless the Stockholders have been furnished with written notice
thereof and such evidence as the Stockholders may deem necessary to establish
the validity of the
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transfer and the acceptance by the transferee or transferees of the terms and
conditions of the Option.
Section 1.5 FCC Approval
The parties to this Agreement understand, acknowledge and agree that any
transfer of all or any part of the shares underlying the Options shall be
subject to the requirements of the Communications Act of 1934, as amended, and
the rules and regulations of the Federal Communications Commission ("FCC") as
may be in effect at the time of such transfer, and that before certain rights
provided for in this Agreement are exercised, it may be necessary to obtain any
approval of the FCC required under applicable law.
Section 1.6 Right of First Refusal
In the event of any of the following: (i) the Optionee gives written notice
to all Stockholders that it desires to exercise the Option in whole or in part;
(ii) the Optionee gives written notice to all Stockholders that it desires to
enter into an agreement pursuant to which some or all of the shares of Video
Stock underlying the Option (or purchased by the exercise thereof) would be sold
to a third party; (iii) the death of the Optionee; or (iv) the Optionee's
employment with Video is terminated, the Stockholders and their designees are
hereby granted (pro rata in accordance with the Ratios) the right to purchase at
Fair Market Value such shares or in the case of clause (i) and (at the election
of each Stockholder) the option to be exercised or the shares acquired as a
result thereof. The Optionee (or its estate) shall give the Stockholders ten
(10) days prior written notice of any event contemplated in clauses (i) and (ii)
above and the estate of any deceased Optionee shall give the Stockholders ten
(10) days written notice following any event contemplated in clause (iii) above.
"Fair Market Value" as used herein shall mean (A) the fair market value of a
share of or option as determined by an appraiser which shall be selected by two
accounting firms one of which shall have been chosen by the Stockholders and one
by the Optionee (or his estate) or (B) in the event the share underlying the
Option is traded on a national securities exchange or other stock market, the
closing sales price of such share on the date of the event contemplated in the
first sentence of this Section 1.6. Each Stockholder shall have a period equal
to: (x) five business days from the date he receives written notice from the
appraiser of the Fair Market Value, or (y) if Fair Market Value is to be
determined pursuant to clause (i) above, ten (10) days following the occurrence
of any event specified in clauses (i) through (iv) above to exercise his right
to purchase such shares or option from the Optionee under this Section 1.6. Such
Stockholder shall provide written notice to the Optionee of its intent to
purchase and the number of shares of Video Stock or options which it intends to
purchase. Thereafter, the Stockholder shall pay for the shares of Video Stock or
options within ten calendar days from the date he gives notice to the Optionee
of his intent to purchase pursuant to this Section 1.6 and the Optionee shall
transfer the same to such Stockholder, free and clear of all liens, claims and
encumbrances.
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Section 2. Miscellaneous.
Section 2.1 Entire Agreement: Amendment
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof. Any term or provision of this
Agreement may be waived at any time by the party which is entitled to the
benefit thereof, and any term or provision of this Agreement may be amended or
supplemented at any time by the mutual consent of the parties hereto, except
that any waiver of any term or condition, or any amendment, of this Agreement
must be in writing.
Section 2.2 Governing Law
The laws of the State of New York shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflict of laws.
Section 2.3 Successors
This Agreement shall be binding upon and inure to the benefit of the
successors, assigns and heirs of the respective parties.
Section 2.4 Notices
All notices or other communications made or given in connection with
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by registered or certified mail, return receipt
requested, to those listed below at their following respective addresses or at
such other address as each may specify by notice to the others:
To Optionee:
Xxxxxx X. Xxxxxxx
00 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
To the Stockholders:
Xxxxx X. Xxxxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
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Xxxxxx X. Xxxxxxxx
c/o Video Services Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
All notices to the Stockholders shall also be sent to:
Xxxxxx Xxxxxx Butowsky Xxxxxxx Shalov & Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Fax Number: (000) 000-0000
Section 2.5 Waiver
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver thereof or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
Section 2.6 Titles; Construction
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Xxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxx
Optionee:
Xxxxxx X. Xxxxxxx
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SCHEDULE I
Notations As to Partial Exercise
Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
