EXHIBIT 10.9
XXXX MEDIA CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
EFFECTIVE DATE: September 1, 1998
BETWEEN: Xxxx Media Corporation, an
Oregon corporation (the "Company")
AND: Xxxxx X. Xxxxx (the "Optionee")
0 Xxxxxxx Xxxxx, Xxxxxxx, XX 00000
Number of Option Shares: 125,000
Option Price per Share: 115,000 at $8.71
10,000 at $10.25
Vesting Schedule: Number of Number of Years After
Shares Vested Date of Agreement
------------- ---------------------
25,000 0 - Immediately Vested
27,500 1
27,500 2
27,500 3
17,500 4
The Shares at the $8.71 per Share price shall vest first.
The Company's Board of Directors (the "Board") has granted to the
Optionee an option to purchase shares of the Company's Common Stock, without par
value (the "Stock") upon and subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, the parties agree as follows:
1. GRANT; TERMS OF OPTION. Subject to the terms and conditions of this
Agreement, the Company grants to the Optionee the right and option (the
"Option") to purchase any part of an aggregate number of shares of the Company's
authorized but unissued Stock stated in the caption of this Agreement at the
price per share stated in the caption of this Agreement. It is the intent of the
Board that the Option not qualify as an "incentive stock option" under the tax
laws. The Option is granted upon the following terms and conditions:
(a) TERM OF OPTION. Subject to reductions in the Option term provided in
subparagraphs (c) and (e) below, the Option shall continue in effect
through the tenth anniversary of the date of this Agreement.
(b) TIMING OF RIGHT TO EXERCISE. Except as provided in subparagraph (c)
hereof, the Option may be exercised from time to time over the term of
the Option in the amounts specified in the vesting schedule set forth
in the caption of this Agreement. If the Optionee does not purchase in
any one year the full number of shares that the Optionee is then
entitled to purchase, the Optionee's rights shall be cumulative, and,
subject to the other provisions of this Agreement, the Optionee may
purchase those shares thereafter during the term of the Option.
(c) TERMINATION OF EMPLOYMENT. Except as provided in this subparagraph(c),
the Option shall not be exercised unless at the time of such exercise
the Optionee is in the employ of the Company or a Subsidiary and shall
have so served continuously since the effective date of this
Agreement. If the employment of the Optionee by the Company or
Subsidiary is terminated by Optionee prior to the third anniversary of
the date of this Option for any reason other than breach by the
Company of Optionee's Employment Agreement, the Option may be
exercised by the Optionee at any time prior to the expiration date of
the term of the Option, but only if and to the extent the Optionee was
entitled to exercise the Option at the date of such termination. If
the employment of the Optionee with the Company or Subsidiary
terminates for any other reason, the Option shall be deemed to be
fully vested and may be exercised by the Optionee at any time prior to
the expiration date of the term of the Option. To the extent that the
Option is not exercised within the applicable period, all further
rights to purchase shares pursuant to the Option shall cease and
terminate at the expiration of such period.
(d) MANNER OF EXERCISE. Shares may be purchased pursuant to the Option
only upon receipt by the Company of written notice from the Optionee
of the Optionee's desire to purchase, specifying the number of shares
the Optionee desires to purchase and the date on which the Optionee
desires to complete the purchase. The Option may not be exercised for
a fraction of a share. If required to comply with any applicable
federal or state securities laws, the notice also shall contain a
representation that it is the Optionee's intention to acquire the
shares for investment and not for resale. On the date specified for
completion of the
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purchase of the shares, the Optionee shall pay the Company the full
purchase price of the shares in cash or by such other method of
payment as shall be approved by the Board. No shares shall be
issued until full payment has been made, and the Optionee shall
have none of the rights of a shareholder until shares are issued.
Upon notification of the amount due and prior to or concurrently
with delivery of the certificate representing the shares, the
Optionee shall pay to the Company any amounts necessary to satisfy
applicable federal, state and local withholding tax requirements.
(e) CHANGES IN CAPITAL STRUCTURE. Except as provided in the final sentence
of this subparagraph (e), if the outstanding shares of Stock are
increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company or of
another corporation by reason of any reorganization, merger,
consolidation, plan of exchange, recapitalization, reclassification,
stock split-up, combination of shares or dividend payable in shares,
the Board shall make appropriate adjustment in the number and kind of
shares as to which the Option, or portion thereof then unexercised,
shall be exercisable, the exercise price of the Option and all other
matters deemed appropriate by the Board, so that the Optionee's
proportionate interest shall be maintained as before the occurrence of
such event. Such adjustment in the Option shall be made without change
in the total price applicable to the unexercised portion of the Option
and with a corresponding adjustment in the option price per share. Any
such adjustment made by the Board shall be conclusive. In the event of
the dissolution of the Company or a merger, consolidation, plan of
exchange or similar transaction affecting the Company, in lieu of
adjusting the Option as described above or lieu of having the Option
continue unchanged, the Board may, in its sole discretion, provide a
30-day period immediately prior to such event during which the
Optionee shall have the right to exercise the Option in whole or in
part without any limitation on exercisability and upon the expiration
of such 30-day period any unexercised portion of the Option shall
immediately terminate.
2. CONDITIONS. The obligations of the Company under this Agreement shall
be subject to the approval of such state or federal authorities or agencies as
may have jurisdiction in the matter. The Company shall use its best efforts to
take such steps as may be required by state or federal law or applicable
regulations, including rules and regulations of the Securities and Exchange
Commission, any quotation system on which the Stock may then be traded and any
stock exchange on which the Stock may then be listed, in connection with the
issuance or sale of any shares acquired pursuant to this Agreement or the
trading or listing of such shares on any such system or exchange. The Company
shall not be obligated to issue or deliver shares under this Agreement if, upon
advice of its legal counsel, such issuance or delivery would violate state or
federal securities laws.
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3. NONTRANSFERABILITY.
(a) RESTRICTION. The Option is not transferable other than by will or
the laws of descent and distribution and, during the Optionee's
lifetime, may be exercised only by the Optionee.
(b) EXERCISE BY LEGAL REPRESENTATIVE OR SUCCESSOR. Whenever the word
"Optionee" is used in any provision of this Agreement under
circumstances when the provision should logically be construed to
apply to the Optionee's guardian, legal representative, executor,
administrator, or the person or persons to whom the Option may be
transferred by testamentary disposition or by the laws of descent
and distribution, the word "Optionee" shall be deemed to include
such person or persons.
4. LEGENDS. Certificates representing the shares subject to this
Agreement shall bear such legends as the Board shall deem appropriate to reflect
any restrictions on transfer imposed by federal or applicable state securities
laws.
5. CONTINUING RELATIONSHIP. Nothing in this Agreement shall confer upon
the Optionee any right to continue as an employee of the Company or any
Subsidiary or interfere in any way with the right of the Company or Subsidiary
to terminate the Optionee's employment at any time for any reason, with or
without cause.
6. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of any successor of the Company, but, except as provided above,
the Option shall not be assigned or otherwise disposed of by the Optionee.
7. ADMINISTRATION OF AGREEMENT BY COMMITTEE. At such time as a committee
of the Board is appointed to administer this Agreement, all decisions relating
to this Agreement shall be made by such committee and all references in this
Agreement to the Board shall mean and refer to such committee.
8. NOTICES. Parties to this Agreement shall give all notices to the
other parties concerning this Agreement by personal delivery, by telecopier or
by registered or certified mail, return receipt requested, addressed as follows:
If to the Company: Xxxx Media Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
If to Optionee: at Optionee's address stated in the caption
of this Agreement, or such other address as
Optionee, by notice to the Company, may
designate in writing from time to time.
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Any party may, by written notice to the other parties, designate a new address
to which notices shall thereafter be delivered. Notice hereunder shall be deemed
effective upon the earlier of actual receipt or three days after being sent by
registered or certified mail.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date stated above.
XXXX MEDIA CORPORATION
By /s/ Xxxxx X. Xxxx
-------------------------------------
Xxxxx X. Xxxx
President and Chief Executive Officer
OPTIONEE
/s/ Xxxxx X. Xxxxx
-------------------------------------
Xxxxx X. Xxxxx
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