Exhibit 6(c)(vii)
[OPTIONEE]
OPTION GRANT AGREEMENT
OPTION AGREEMENT dated March 10, 1997 between The CineMasters Group, Inc.,
a New York corporation (the "Company") and [OPTIONEE], an executive of the
Company (the "Executive").
Pursuant to the Company's 1997 Stock Option and Long Term Incentive Plan (
the "Stock Option Plan"), the Company desires to make available shares of its
Common Stock, par value $.01 per share (the "Common Stock"), for purchase by the
Executive, and thereby to provide an additional incentive to him to continue in
the employ of the Company or its subsidiaries and give him a greater interest as
a shareholder in the success of the Company.
NOW, THEREFORE, in accordance with the mutual covenants hereinafter set
forth and for good and valuable consideration, the parties hereby agree as
follows:
1. GRANT OF OPTIONS. The Company hereby grants, on the terms and
conditions set forth herein, to the Executive as a matter of separate agreement
and not in lieu of salary or any other compensation for services, the right and
option to purchase all or any part of an aggregate of ________ shares of Common
Stock (the "Option").
2. PURCHASE PRICE. The purchase price of shares of Common Stock subject to
the Option shall be $3.00 per share, being not less than 85% of the "market
value" (as defined in Section 8 of the Stock Option Plan) of the Common Stock on
the date of the grant of the Option.
3. TERM OF OPTION. The term of the Option shall be ten years from the date
hereof, subject to the provisions of the Stock Option Plan with respect to
termination of employment, death or disability of the Executive. Any portion of
the Option not exercised prior to the termination of the Option shall thereupon
become null and void.
4. ACCRUAL OF OPTION. Subject to the provisions of Section 5 hereof, the
Option shall become vested and exercisable as follows:
20% - effective immediately upon execution of this Option Agreement; 40%
- effective March 10, 1998; 60% - effective March 10, 1999; 80% -
effective March 10, 2000; and
100% - effective March 10, 2001.
5. ACCELERATED VESTING AND EXERCISE PROVISIONS.
(a) Effective immediately upon the effective date of a "Change of Control"
of the Company, all shares of Common Stock subject to the outstanding Option
shall automatically become fully vested and exercisable, and the Executive shall
have the right to purchase all or any portion of the shares of Common Stock
subject to the Option that have not been previously purchased.
(b) For all purposes of this Option Agreement and the Stock Option Plan, a
"Change of Control" of the Company shall be deemed to have occurred upon the
happening of any of the following events: (i) approval by the stockholders of
the Company of a transaction that would result in the reorganization, merger, or
consolidation of the Company with one or more other "Persons" within the meaning
of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
("Securities Act"), other than a transaction following which:
(A) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the
same relative proportions by Persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the outstanding equity ownership interests in the
Company; and
(B) at least 51% of the securities entitled to vote generally
in the election of directors of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in substantially the same relative proportions by Persons who,
immediately prior to such transaction, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities
entitled to vote generally in the election of directors of the Company;
(ii) the acquisition of all or substantially all of the assets of the
Company;
(iii) a complete liquidation or dissolution of the Company, or
approval by the stockholders of the Company of a plan for such liquidation or
dissolution;
(iv) the occurrence of any event if, immediately following such event,
at least 50% of the members of the Board of Directors of the Company do not
belong to any of the following groups:
(A) individuals who were members of the Company's Board of Directors
on the date hereof; or
(B) individuals who first became members of the Board of Directors
after the date hereof:
(I) upon election to serve as a member of the Board of Directors of
the Company by affirmative vote of three-quarters of the members of such Board,
or of a nominating committee thereof, in office at the time of such first
election; or
(II) upon election by the stockholders of the Company to serve as a
member of the Board of Directors of the Company, but only if nominated for
election by affirmative vote of three-quarters of the members of the Board of
Directors of the Company, or of a nominating committee thereof, in office at the
time of such first nomination; provided, however, that such individual's
election or nomination did not result from an actual or threatened election
contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or
consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) other than by or on behalf of the Board of Directors of the
Company.
Notwithstanding the provisions of subsection 5(b)(i) through (iv) above,
for purposes of this Option Agreement, a "Change of Control" of the Company
shall not be deemed to have occurred with respect to the Executive in the event
that the Executive approves or votes, either in his capacity as a member of the
Board of Directors or as a stockholder of the Company, in favor of the
transaction or event resulting in a "Change of Control" of the Company under
subsection 5(b)(i), (ii), (iii) or (iv) above provided that such "Change of
Control" was contested by a majority of the Board of Directors of the Company.
6. STOCKHOLDER APPROVAL OF THE STOCK OPTION PLAN The Option is subject to
the terms of the Stock Option Plan (copy attached hereto) and, to the extent
necessary, contingent upon the approval of the Stock Option Plan by the
stockholders of the Company on or prior to the date of the 1997 annual meeting
of such stockholders. The Company hereby covenants and agrees that it will
promptly, and in any event no later than by the date of the 1997 annual meeting,
obtain stockholder approval of the Stock Option Plan, it being understood and
agreed that the Company's delivery of such stockholder approval constitutes a
material condition of this Option Agreement. Accordingly, the Company covenants
and agrees that if, for any reason, stockholder approval of to the Stock Option
Plan is not obtained in a timely manner, the Company shall take any and all
actions necessary, including, but not limited to, paying additional compensation
to the Executive, in order to place the Executive in the same financial position
(determined on a net after-tax basis) that he would have been in had stockholder
approval to the Stock Option Plan been obtained in a timely manner.
7. WITHHOLDING TAX LIABILITY. The Executive agrees to deposit with the
Escrow Agent, if so requested by the Company at its sole discretion, an amount
sufficient to satisfy any withholding tax liability imposed as a result of the
exercise of all or any portion of the Option granted hereunder.
8. REGISTRATION OF SECURITIES. In accordance with the applicable
provisions and rules of the Securities Act of 1933, as amended ("Securities Act
"), and, in any event, as soon as practicable, the Company shall file or cause
to be filed a registration statement on SEC Form S-8 providing for the
registration under the Securities Act of the shares of the Company's Common
Stock underlying the Option. In addition, as soon as the Company becomes
eligible under the applicable provisions and rules of the Securities Act to file
a re-offer prospectus on SEC Form S-3 (or on any successor form thereto) with
respect to the Option, it shall, to the extent necessary, promptly file or cause
to be filed pursuant to Rule 462(b) of the Securities Act a post-effective
amendment to the SEC Form S-8 then on file with the Securities and Exchange
Commission providing for the registration of the shares of Common Stock covered
by the Option for re-offer or re-sale by the Executive.
9. RIDERS. Riders, if any, attached hereto shall also form a part of the
terms and conditions of this Option Agreement.
IN WITNESS WHEREOF, the Company and the Executive have duly executed this
Option Agreement, all as of the day and year first above written.
THE CINEMASTERS GROUP, INC.
By: ____________________________
Xxxx Xxxxxx
President & Chief Executive Officer
By: _____________________________
[OPTIONEE]
Executive
