EXHIBIT 10.50
NTN COMMUNICATIONS, INC.
AMENDMENT TO NONQUALIFIED STOCK OPTION AGREEMENT
THIS AMENDMENT TO THE NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement")
dated as of March 1, 1997, is made as of May 14, 1997, by and between NTN
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxx, an individual (the "Optionee").
W I T N E S S E T H
WHEREAS, the Company's Board of Directors authorized the grant to the
Optionee of an option (the "Option") to purchase 250,000 shares of Common Stock,
$.005 par value, of the Company (the "Common Stock") upon the terms and
conditions hereinafter set forth; and
WHEREAS, the parties desire to amend the Agreement to read as hereinafter
provided;
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the Agreement is amended
to provide as follows:
1. Grant of Nonqualified Option. The Company hereby grants to the
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Optionee the right and option to purchase, in accordance with the terms and
conditions hereof, an aggregate of 250,000 shares (the "Shares") of Common Stock
at the price of $2.81 per share (the "Price"), exercisable from time to time,
prior to the close of business on March 1, 2002 (the "Expiration Date"). This
Option is not being granted pursuant to the Company's 1995 Stock Option Plan, as
amended, but pursuant to the Company's Special Stock Option Plan (the "Plan").
2. Vesting and Exercisability of Option. The Option will become vested
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and exercisable as to 1/24th of the Shares on the first day of each month
commencing April 1, 1997. The right to purchase any or all of the Shares will
be exercisable on or after February 28, 1999, and will terminate on the close of
business on March 1, 2002.
3. Change in Control Event.
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Notwithstanding Section 2 hereof, the Option shall become vested and
exercisable in full immediately upon a Change in Control Event. A "Change in
Control Event" shall mean:
(1) The acquisition by any individual entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (a "Person") of beneficial ownership of 50% or more
of the then outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the "Outstanding Voting Securities");
provided, however, that the following acquisitions shall not constitute a Change
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in Control Event: (A) any acquisition by the Corporation or (B) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation;
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(2) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual who becomes a director subsequent
to the date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board; but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board;
(3) Approval by the shareholders of the Corporation of a reorganization,
merger or consolidation (a "transaction"), unless, following such transaction in
each case, more than 50% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such transaction and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entitles who
were the beneficial owners, respectively, of the outstanding Common stock and
Outstanding Voting Securities immediately prior to such transaction;
(4) Approval by the shareholders of the Corporation of (A) a complete
liquidation or dissolution of the Corporation or (B) the sale or other
disposition of all or substantially all of the assets of the Corporation, unless
such assets are sold to a corporation and following such sale or other
disposition, the condition described in paragraph (3) above is satisfied.
4. Method of Exercise of Option and Payment of Purchase Price. Each
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exercise of the Option shall be by means of a written notice of exercise
delivered to the Company and specifying the number of whole shares with respect
to which the Option is being exercised, together with any written statements
required pursuant to Section 9 below and payment of the Price in full in cash or
by check payable to the order of the Company; provided that so-called cashless
exercises may be permitted in the discretion of the Committee administering the
Plan. The delivery of shares pursuant to an exercise of this Option will be
conditional upon payment by the Optionee of amounts sufficient to enable the
Company to pay all applicable federal, state and local withholding taxes.
5. Effect of Death of Optionee. The Option and all other rights
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hereunder, to the extent such rights shall not have been exercised, shall
terminate and become null and void at the end of twelve months following the
Optionee's death. During the twelve-month period after death, the Option may,
to the extent exercisable on the date of death (or earlier termination), be
exercised by the executor of the Optionee's will or the administrator of the
holder's estate; provided that in no event may the Option be exercised by any
person after the Expiration Date.
6. Non-Assignability of Option. The Option and the rights and privileges
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conferred hereby are not transferable or assignable and may not be offered,
sold, pledged, hypothecated or otherwise disposed of in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment, garnishment, levy or similar process. During the Optionee's
lifetime, the Option may be exercised only by the Optionee, or, subject to the
provisions of Section 4, within twelve months after his death by the executor of
his will or the administrator of his estate, and not otherwise, regardless of
any community property or other interest therein
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of the Optionee's spouse or such spouse's successor in interest. In the event
that the spouse of the Optionee shall have acquired a community property
interest in the Option, the Optionee, or such transferees, may exercise it on
behalf of the spouse of the Optionee or such spouse successor in interest.
7. Adjustments and Other Rights. The rights of the Optionee hereunder
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will be subject to adjustments and modifications in certain circumstances and
upon occurrence of certain events including a reorganization, merger,
combination, recapitalization, reclassification, stock split, reverse stock
split, stock dividend or stock consolidation.
8. Optionee Not A Stockholder. Neither the Optionee nor any other person
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entitled to exercise the Option shall have any of the rights or privileges of a
shareholder of the Company as to any shares of Common Stock not actually issued
and delivered to him. No adjustment will be made for dividends or other rights
for which the record date is prior to the date on which such stock certificate
or certificates are issued even if such record date is subsequent to the date
upon which notice of exercise was delivered and the tender of payment was
accepted.
9. Application of Securities Laws. No shares of Common Stock may be
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purchased pursuant to the Option unless and until any then applicable
requirements of the Securities and Exchange Commission, the California
Department of Corporations and any other regulatory agencies, including any
other state securities law commissioners having jurisdiction over the Company or
such issuance, and any exchanges upon which the Common Stock may be listed,
shall have been fully satisfied. The Optionee represents, agrees and certifies
that:
(a) If the Optionee exercises the Option in whole or in part at a
time when there is not in effect under the Securities Act of 1933, as amended
(the "Act"), a registration statement relating to the Common Stock issuable upon
exercise and available for delivery to him a prospectus meeting the requirements
of Section 10(a)(3) of the Act, the Optionee will acquire the Common Stock
issuable upon such exercise for the purpose of investment and not with a view to
resale or distribution and that, as a condition to each such exercise, he or she
will furnish to the Company a written statement to such effect, satisfactory in
form and substance to the Company, which statement also acknowledges that the
Option shares have not been registered under the Act and are "restricted
securities" within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer; and
(b) If and when the Optionee proposes to publicly offer or sell the
Common Stock issued to him upon exercise of the Option, the Optionee will notify
the Company prior to any such offering or sale and will abide by the opinion of
counsel to the Company as to whether and under what conditions and
circumstances, if any, he may offer and sell such shares, but such procedure
need not be followed if a Prospectus was delivered to the Optionee with the
shares of Common Stock and the Common Stock was and is listed on the New York
Stock Exchange or the American Stock Exchange.
The Optionee understands that the certificate or certificates representing
the Common Stock acquired pursuant to the Option may bear a legend referring to
the foregoing matters and any limitations under the Act and state securities
laws with respect to the transfer of such Common Stock, and the Company may
impose stop transfer instructions to implement such limitations, if applicable.
Any person or persons entitled to exercise the Option under the
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provisions of Section 4 above shall be bound by and obligated under the
provisions of this Section 8 to the same extent as is the Optionee.
10. Notices. Any notice to be given under the terms of this Amendment
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shall be in writing and addressed to the Secretary of the Company at its
principal office and any notice to be given to the Optionee shall be addressed
to him at the address given beneath the Optionee's signature hereto, or at such
other address as either party may hereafter designate in writing to the other
party. Any such notice shall be deemed to have been duly given when enclosed in
a properly sealed envelope addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States Government.
11. Effect of Amendment. This Amendment shall be assumed by, be binding
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upon and inure to the benefit of any successor or successors of the Company.
12. Laws Applicable to Construction. The Option has been granted,
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executed and delivered as of the day and year first above written in Carlsbad,
California, and the inter pretation, performance and enforcement of the Option
and this Amendment shall be governed by the internal laws of the State of
California.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed on
its behalf by a duly authorized officer and the Optionee has hereunto set his
hand as of the day and year first above written.
NTN COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxx, Xx.
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Title: President
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OPTIONEE
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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