AMENDED AND RESTATED
NONQUALIFIED STOCK OPTION AGREEMENT
FOR CORPORATE OFFICERS
AGREEMENT made as of the 10th day of September, 1997 between Telemundo
Group, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx
(the "Optionee").
WHEREAS, the Company has adopted the 1994 Stock Plan, as the same may
be amended from time to time (the "Plan") in order to provide additional
incentive to certain officers and employees of the Company and its Subsidiaries;
and
WHEREAS, the Optionee has entered into an employment agreement, dated
as of March 9, 1995, with the Company (the "Employment Agreement");
WHEREAS, the Committee responsible for administration of the Plan
granted an option to the Optionee, effective as of March 9, 1995 (the "Grant
Date"), pursuant to that certain Nonqualified Stock Option Agreement for
Corporate Officers (the "Original Agreement") dated as of the Grant Date;
WHEREAS, the Committee and the Optionee desire to amend and restate the
Original Agreement in its entirety, effective as of September 10, 1997, pursuant
to this Amended and Restated Nonqualified Stock Option Agreement for Officers
(the "Agreement") concurrently with the Company's amendment and restatement of
the Employment Agreement pursuant to that certain Amended and Restated
Employment Agreement (the "Amended Employment Agreement") between the Company
and Optionee dated concurrently herewith.
NOW, THEREFORE, the parties hereto agree that the Original Agreement
shall be amended and restated as follows:
1. OPTION.
1.1 This Agreement shall be construed in accordance and consistent
with, and subject to, the provisions of the Plan (the provisions of which are
incorporated herein by reference) and, except as otherwise expressly set forth
herein, the capitalized terms used in this Agreement shall have the same
definitions as set forth in the Plan.
1.2 The parties acknowledge and agree that pursuant to the Original
Agreement the Company has granted the Optionee the right and option (the
"Option") to purchase all or any part of an aggregate of 512,500 whole shares of
Stock and that they now desire for the Option to be subject to, and governed in
accordance with, the terms and conditions set forth in this Agreement.
1.3 The Option is not intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code.
2. PURCHASE PRICE.
The price at which the Optionee shall be entitled to purchase shares of
Stock upon the exercise of the Option shall be $10.00 per share.
3. DURATION OF OPTION.
Except as otherwise provided in this Agreement or the Plan, the Option
shall be exercisable to the extent and in the manner provided herein for a
period of ten years from the Grant Date (the "Exercise Term"); provided,
however, that the Option may be earlier terminated as provided in Section 7
hereof.
4. COMPENSATION COMMITTEE. The Company represents and warrants to the
Optionee that this Agreement has been approved by the Committee.
5. VESTING AND EXERCISABILITY OF OPTION.
5.1 Unless otherwise provided in this Agreement or the Plan,
the Option shall entitle the Optionee, in whole at any time or in part from time
to time, to exercise the Option for shares of Stock to the extent the Option has
become "vested". The parties acknowledge that the Option has fully vested and
become immediately exercisable as to 256,250 Shares in accordance with the
Original Agreement. The remaining provisions of Section 5 shall govern the
vesting and exercisability of the remaining 256,250 Shares that are subject to
the Option (the "Remaining Option Shares").
5.2 The Option shall "vest" and become exercisable as to all
of the Remaining Option Shares on February 28, 2004 if, but only if, Optionee is
employed with the Company on such vesting date.
5.3 The Option shall "vest" and become exercisable as to
32,032 of the Remaining Option Shares on the effective date of this Agreement.
5.4 In addition, to the extent that the Option shall not have
previously "vested" and become exercisable pursuant to Sections 5.3 or 7.3, the
Option shall "vest" and become exercisable with respect to 128, 125 of the
Remaining Option Shares on the day immediately after the date during the period
beginning on September 10, 1997 and ending on December 31, 1997 on which the
closing price of the Stock, on Nasdaq or the principal exchange on which shares
of Stock are then trading, has equaled or exceeded $32.00 per share for a period
of thirty (30) consecutive trading days, if, but only if, the Optionee is
employed with the Company on such vesting date.
5.5 In addition, to the extent that the Option shall not have
previously "vested" and become exercisable pursuant to Sections 5.3, 5.4 or 7.3,
the Option shall "vest" and become exercisable as to 32,032 of the Remaining
Option Shares on December 31, 1998, if, but only if, Optionee is employed with
the Company on such vesting date.
5.6 In addition, to the extent that the Option shall not have
previously "vested" and become exercisable pursuant to Sections 5.3, 5.4, 5.5 or
7.3, the Option shall "vest" and become exercisable as to 32,032 of the
Remaining Option Shares on December 31, 1999, if, but only if, Optionee is
employed with the Company on such vesting date.
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5.7 In addition, to the extent that the Option shall not have
previously "vested" and become exercisable pursuant to Sections 5.3, 5.4, 5.5,
5.6 or 7.3, the Option shall "vest" and become exercisable as to 32,029 of the
Remaining Option Shares on December 31, 2000, if, but only if, Optionee is
employed with the Company on such vesting date.
5.8 In addition, to the extent the Option shall not have
previously "vested" and become exercisable pursuant to Sections 5.3, 5.4, 5.5,
5.6, 5.7 or 7.3, all of the Remaining Option Shares which have not previously
"vested" pursuant to such provisions, shall become "vested" and exercisable
immediately prior to the time at which a "Change of Control Transaction" occurs
if, but only if, Optionee is employed with the Company immediately prior to the
occurrence of such Change of Control Transaction. A "Change of Control
Transaction" means any one or more of the following events: (A) an event or
series of events after the date of the Original Agreement as a result of which
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) who did not own at least 500,000 shares of the Company's
Series B Common Stock on September 1, 1997 becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more
than 50% of the aggregate voting power of all of the capital stock of the
Company normally entitled to vote in the election of directors or (B) a sale,
transfer, conveyance or other disposition, directly or indirectly, in any single
transaction or series of related transactions, no matter how accomplished, which
results in more than 50%, in value, of (1) the capital stock (or other equity
interest in) or operating assets of Telemundo Network, Inc., a wholly-owned
subsidiary of the Company or (2) the aggregate capital stock (or other equity
interest in) or operating assets of all of the Company's subsidiaries (other
than Telemundo Network, Inc.), which currently comprise the Company's owned and
operated station group (including any special purpose license subsidiaries),
being owned (which term shall include "beneficial ownership" within the meaning
of Rule 13d-3 under the Exchange Act), directly or indirectly, by any "person"
or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) who did not own at least 500,000 shares of the Company's Series B Common
Stock on September 1, 1997 or (C) a transaction or series of related
transactions leading to at least an 80% reduction in the number of outstanding
shares of Stock held by "unaffiliated persons" (meaning any person other than
Xxxxxxxxx Partners, Apollo Partners, L.P. or Bastion Capital Fund, L.P. or any
of their respective affiliates (as this term is defined in Rule 12b-2 under the
Exchange Act) on the date of this Agreement.
5.9 In the event of a subdivision or combination of the
outstanding shares of Stock (whether by stock split, stock dividend, reverse
stock split or otherwise), the per share prices specified in Sections 5.4, and
5.8 shall be proportionately adjusted.
6. MANNER OF EXERCISE AND PAYMENt.
6.1 Subject to the terms and conditions of this Agreement and
the Plan, the Option may be exercised by delivery of written notice to the
Company at its principal
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executive office. Such notice shall state that the Optionee is electing to
exercise the Option and the number of shares of Stock in respect of which the
Option is being exercised and shall be signed by the person or persons
exercising the Option. If requested by the Committee, such person or persons
shall (i) deliver this Agreement to the Secretary of the Company who shall
endorse thereon a notation of such exercise and (ii) provide satisfactory proof
as to the right of such person or persons to exercise the Option.
6.2 The notice, of exercise described in Section 6.1 shall be
accompanied by the full purchase price for the shares of Stock in respect of
which the Option is being exercised and by the Withholding Taxes, in cash, by
check or, in the discretion of the Committee, by transferring shares of Stock to
the Company held by the Optionee for more than six months and having a Fair
Market Value on the day preceding the day of exercise equal to the cash amount
for which such shares of Stock are substituted. Notwithstanding the preceding
sentence, the parties agree that, to the extent permitted by law, and to the
extent it would not, in the Company's judgment, result in any adverse legal,
financial or tax implications for the Company, it is their intention that
Optionee be able to effect a simultaneous exercise of this Option and sale of
shares of Stock issuable upon such exercise in the over-the-counter market or
any securities exchange on which the Stock is then listed, without Optionee
bearing any commission or brokerage expense (a "concurrent transaction"). To
this end, the Company and Optionee shall jointly agree upon a securities broker
to be used in such transactions and further to adopt such additional procedures
as may be necessary or advisable to accomplish concurrent transactions. In any
concurrent transaction, the Company shall not be required to deliver a share
certificate upon exercise of this Option unless it receives concurrent payment
of the exercise price and Withholding Taxes. The Company shall bear all
commission and brokerage expense associated with concurrent transactions, which
shall be treated as an adjustment in the purchase price of shares subject to
this Option.
6.3 Upon receipt of notice of exercise and full payment for
the shares of Stock in respect of which the Option is being exercised and of the
Withholding Taxes, the Company shall, subject to Section 14 of the Plan,
promptly take such action as may be necessary to effect the transfer to the
Optionee of the number of shares of Stock as to which such exercise was
effective, including issuing and delivering such shares of Stock and entering
the Optionee's name as a stockholder of record on the books of the Company
provided, that full payment of the exercise price and Withholding Taxes may be
made concurrently with such transfer and delivery in the case of a concurrent
transaction provided for in Section 6.2.
6.4 The Optionee shall not be deemed to be the holder of, or
to have any of the rights of a holder with respect, to any shares of Stock
subject to the option until (i) the Option shall have been exercised pursuant to
the terms of this Agreement and the Optionee shall have paid the full purchase
price for the number of shares of Stock in respect of which the Option was
exercised, (ii) the Company shall have issued and delivered the shares of Stock
to the Optionee, and (iii) the Optionee's name shall have been entered as a
stockholder
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of record on the books of the Company, whereupon the Optionee shall have full
voting and other ownership rights with respect to such shares.
6.5 If and when requested by Optionee, the Company shall file
a registration statement (on Form S-8 or any successor form) under the
Securities Act of 1933 (the "Act") covering the shares of Stock subject to this
Option and shall use its best efforts to cause the same to become effective and
in addition shall register or qualify such shares under all applicable State
securities laws (including in connection with a concurrent transaction). In
addition, the Company will use its reasonable efforts to permit such shares to
be registered in a "piggy back" registration in connection with a registration
of shares of stock to be issued by the Company pursuant to Form X-0, X-0, X-0 or
S-8 under the Act, on such customary terms and conditions as the Company shall
reasonably specify. Upon the Optionee's written request, if he desires to sell
shares of Stock that cannot be resold by him for any reason without registration
under the Act, the Company will (i) promptly cause a registration statement to
be filed under the Act covering the resale of such shares and use its best
efforts to cause the same to become effective as promptly as practicable (the
Company being under no obligation to effect more than one such registration) or
(ii) repurchase such shares and, to the extent requested by the Optionee, the
number of such vested shares subject to this Option from Optionee at their
market value. The Optionee shall, in a manner customary for such a registration,
cooperate with the Company, as reasonably requested by it, in connection with
such registration and resale. The Company shall, by written notice to the
Optionee within 10 days after receipt of such request, elect whether the Company
will effect such registration or repurchase Optionee's shares of Stock. For this
purpose, "market value" of (i) outstanding shares shall mean the product of the
number of shares to be repurchased multiplied by the arithmetic average of the
closing prices of the Stock, as reported by Nasdaq or the principal exchange on
which the Stock is listed, during the five trading days immediately prior to the
Optionee giving a written request to the Company to register the shares, and
(ii) vested shares subject to this Option shall mean the value of the number of
such vested shares, determined in accordance with the preceding clause (i) as if
they were outstanding, reduced by the aggregate exercise price of the number of
vested shares to be repurchased. To the extent the Company provides registration
rights to effective officers pursuant to benefit or stock plans of the Company,
Optionee will be provided with similar rights as are provided to other executive
officers.
7. TERMINATION OF EMPLOYMENT.
7.1 TERMINATION UNDER SECTION 9(A) OF AMENDED EMPLOYMENT
AGREEMENT. If the employment of the Optionee is terminated pursuant to Section
9(a) of the Amended Employment Agreement, the Optionee (or his personal
representative) may at any time within one year after such termination (but in
no event after the expiration of the Exercise Term) exercise the Option to the
extent, but only to the extent, that the Option or portion thereof was vested on
the date of such termination and the remainder of the Option, if any, shall
terminate.
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7.2 TERMINATION UNDER SECTION 9(B) OF AMENDED EMPLOYMENT
AGREEMENT. If the employment of the Optionee is terminated for Cause or if the
Optionee resigns from his employment pursuant to a resignation that is without
Good Reason and is not a Specified Resignation, in either case as provided in
Section 9(b) of the Amended Employment Agreement, as finally determined pursuant
to the provisions of said Section 9(b), the Optionee (or his personal
representative) may at any time within one year after such termination or
resignation (but in no event after the expiration of the Exercise Term) exercise
the Option to the extent, but only to the extent, that the Option or portion
thereof was vested on the date of such termination or resignation and, subject
to Section 7.3, the remainder of the Option, if any, shall terminate.
7.3 TERMINATION UNDER SECTIONS 9(C) OR 9(D) OF THE AMENDED
EMPLOYMENT AGREEMENT. If the Optionee's employment is terminated pursuant to
Section 9(c) or 9(d) of the Amended Employment Agreement, the Option, to the
extent it has not vested with respect to any Remaining Option Shares, shall
immediately vest and become exercisable. The Optionee may at any time within one
year after the date of such termination of employment (but in no event after the
expiration of the Exercise Term) exercise any or all of the Option to the extent
not previously exercised.
8. NON-TRANSFERABILITY.
The Option shall not be transferable other than by will or by the laws
of descent and distribution. During the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee.
9. NO RIGHT TO CONTINUED EMPLOYMENT.
Nothing in this Agreement or the Plan shall be interpreted or construed
to confer upon the Optionee any right with respect to continuance of employment
by the Company, nor shall this Agreement or the Plan interfere in any way with
the right of the Company to terminate the Optionee's employment at any time,
subject to all terms and conditions of the Amended Employment Agreement.
10. ADJUSTMENTS.
In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments to the number and class of
shares of Stock subject to the Option and the purchase price for such shares of
Stock. The Committee's adjustment shall be made in accordance with the
provisions of Section 4.5 of the Plan and shall be effective and final, binding
and conclusive for all purposes of the Plan and this Agreement. Notwithstanding
either of the preceding two sentences, the vesting and exercisability provisions
in Sections 5 and 7.3 and the rights of the Optionee under Sections 6.5 and 11
shall not be adversely affected by any Change in Capitalization.
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11. CERTAIN EVENTS.
Except as otherwise expressly provided herein, upon the effective date
of (i) the liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the Option shall continue in
effect in accordance with its terms and the Optionee shall be entitled to
receive in respect of all shares of Stock subject to the Option, upon exercise
of the Option, the same number and kind of stock, securities, cash, property or
other consideration that each holder of shares of Stock was entitled to receive
in the Transaction. In addition, if circumstances are such that unvested
Remaining Option Shares would vest under more than one provision of this
Agreement, the Optionee shall have the right to select the provision under which
the vesting occurs.
12. WITHHOLDING OF TAXES.
At such times as an Optionee recognizes taxable income in connection
with the receipt of shares of Stock, securities, cash or property hereunder (a
"Taxable Event"), the Optionee shall pay to the Company an amount equal to the
federal, state and local income taxes and other amounts as may be required by
law to be withheld by the Company in connection with the Taxable Event (the
"Withholding Taxes") prior to the issuance, or release from escrow, of such
shares of Stock or securities or the payment of such cash or such property. The
Company shall have the right to deduct from any payment of cash to an Optionee
or Grantee an amount equal to the Withholding Taxes in satisfaction of the
obligation to pay Withholding Taxes. In satisfaction of the obligation to pay
Withholding Taxes to the Company, the Optionee may make a written election (the
"Tax Election"), which may be accepted or rejected in the discretion of the
Committee, to have withheld a portion of the shares then issuable to him having
an aggregate Fair Market Value, on the date preceding the date of such issuance,
equal to the Withholding Taxes.
13. OPTIONEE BOUND BY THE PLAN.
The Optionee hereby acknowledges receipt of a copy of the Plan as in
effect on the date hereof and agrees to be bound by all the terms and provisions
of the Plan.
14. MODIFICATION OF AGREEMENT.
This Agreement may be modified, amended, suspended or terminated, and
any terms or conditions may be waived, but only by a written instrument executed
by the parties hereto.
15. SEVERABILITY.
Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holding and shall
continue in full force in accordance with their terms.
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16. GOVERNING LAW.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without giving
effect to the conflicts of laws principles thereof.
17. SUCCESSORS IN INTEREST.
This Agreement shall inure to the benefit of and be binding upon any
successor to the Company. This Agreement shall inure to the benefit of the
Optionee's legal representatives. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee's heirs, executors, administrators and
successors.
18. RESOLUTION OF DISPUTES.
Any dispute or disagreement which may arise under, or as a result of,
or in any way relate to, the interpretation, construction or application of this
Agreement shall be determined by binding arbitration. The parties may agree to
submit the matter to a single arbitrator or to several arbitrators, may require
that arbitrators possess special qualifications or expertise or may agree to
submit a matter to a mutually acceptable firm of experts for decision. In the
event the parties shall fail to thus agree upon terms of arbitration within
twenty (20) days from the first written demand for arbitration, then such
disputed matter shall be settled by arbitration under the Rules of Employment
Arbitration of the American Arbitration Association, by three arbitrators
appointed in accordance with such Rules. Such arbitration shall be held in Los
Angeles, California. Once a matter has been submitted to arbitration pursuant to
this section, the decision of the arbitrators reached and promulgated as a
result thereof shall be final and binding upon all parties. The cost of
arbitration shall be shared equally by the parties and each party shall pay the
expenses of his/its attorneys, except that the arbitrators shall be entitled to
award the costs of arbitration, attorneys and accountants' fees, as well as
costs, to the party that they determine to be the prevailing party in any such
arbitration.
19. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
TELEMUNDO GROUP, INC.
By: /s/ XXXXX XXXXXXX
--------------------------------
Name: Xxxxx Xxxxxxx
Title: Chairman of the
Compensation Committee
/s/ XXXXXX X. XXXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxxx
