OPTION AGREEMENT
OPTION AGREEMENT dated December 1, 1995, amended July 29, 1997
between ACTV, Inc., a Delaware corporation (the "Corporation") and Xxxxx Xxxxxxx
(the "Employee").
The Corporation desires to grant to the Employee the right and
option to purchase up to 201,000 shares (the "Option Shares") of Common Stock
(the "Common Stock"), of the Corporation, on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. Subject to Section 12 hereof, the Corporation hereby grants
to the Employee an option (the "Option") to purchase from the Corporation
201,000 Option Shares, at a purchase price of $1.50 per Option Share (the
"Option Price"). The Employee's right and option to purchase the Option Shares
shall vest annually commencing January 1, 1997 until January 1, 1999, with
respect to installments of 67,000 Option Shares at the Option Price, so long as
the Employee is employed by the Corporation. Said right shall be cumulative so
that as of January 1, 1999, Optionee shall have the fully vested right to
purchase 201,000 Option Shares. In the event that the Employee's employment with
the Corporation terminates prior to January 1 of any year, the Employee shall
not have the right or option to purchase any part of the installment of 67,000
Option Shares that would have otherwise vested on such January 1. With respect
to the Option, the "Option Period" shall commence on the date hereof and
terminate on December 31, 2003.
b. The Option may be exercised by the Employee by delivery to
the Corporation, at any time commencing one year from the date hereof, of a
written notice (the "Option Notice"), which Option Notice shall state the
Employee's intention to exercise the Option, the date on which the Employee
proposes to purchase the Option Shares (the "Closing Date") and the number of
Option Shares to be purchased on the Closing Date, which Closing Date shall be
no later than 30 days nor earlier than 10 days following the date of the Option
Notice. Upon receipt by the Corporation of an Option Notice from the Employee,
the Employee shall be obligated to purchase that number of Option Shares to be
purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired pursuant to
the terms of this Option Agreement shall be made on the Closing Date at the
offices of the Corporation. Delivery of the Stock certificate or other
instrument registered in the name of the Employee, evidencing the Option Shares
being purchased on the Closing
Date, shall be made by the Corporation to the holder of this Option on the
Closing Date against the delivery to the Corporation of a check in the full
amount of the aggregate purchase price therefor.
SECTION 2. Representations and Warranties of The Holder.
The Employee hereby represents and warrants to the Corporation that in the event
the Employee acquires any Option Shares, such Option Shares will be acquired for
his own account, for investment and not with a view to the distribution thereof.
The Employee understands that except as set forth in Section 6 hereof, the
Option Shares will not be registered under the Securities Act of 1933, as
amended (the "Securities Act"), by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act pursuant to
Section 4 (2) thereof and that they must be held indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or the
transaction is except from registration.
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any
time during the Option Period, there shall be any capital reorganization,
reclassification of Common Stock (other than a change in par value or from par
value to nor par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which the Employee
would have been entitled if the Employee had held shares of Common Stock
issuable upon the exercise hereof immediately prior to such reorganization,
reclassification, consolidation, merger or sale. The provisions of this Section
3 shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this Option during
the Option Period shall be cumulative as to all prior dates of calculation and
shall be adjusted for any stock dividend, subdivision, split-up or combination
of Common Stock.
b. If, at any time during the first 36 months of the Option
Period, the Corporation issues any previously unissued Common Stock as the
result of any financing, acquisition, joint venture or other business
transaction, then, during such period the number of shares subject to the Option
shall be adjusted such that the holder thereof shall have the right to exercise
the Option for the same percentage of the issued
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and outstanding Common Stock of the Corporation after giving effect to such
transaction (including the future conversion or exercise of any option or
warrants issued in such transaction during the term of the Option, but converted
thereafter) as he held options for immediately prior to such transaction.
c. The Option Price shall be subject to adjustment from time
to time as follows:
(1) If, at any time during the Option Period, the number of
shares of Common Stock outstanding is increased by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, immediately following the record date fixed for the determination
of holders of shares of Common Stock entitled to receive such stock dividend,
subdivision or split-up, the Option Price shall be appropriately decreased so
that the number of shares of Common Stock issuable upon the exercise hereof
shall be increased in proportion to such increase in outstanding shares.
(2) If, at any time during the Option Period, the number of
shares of Common Stock outstanding is decreased by a combination of outstanding
shares of Common Stock, then, immediately following the record date for such
combination, the Option Price shall be appropriately increased so that the
number of shares of Common Stock issuable upon the exercise hereof shall be
decreased in proportion to such decrease in outstanding shares.
SECTION 5. Termination of the Options.
a. Termination of Options in General. Subject to subsections
(b) - (c) of this Section, the Option granted hereby shall terminate and the
Option shall no longer be exercisable after the earlier of December 31, 2003 or
one year after the date of termination of employment, except in the case of
death or disability.
b. Option Rights Upon Disability. If an Employee becomes
disabled while employed by the Corporation or any affiliate or subsidiary, the
Board of Directors or the Stock Option Committee of the Corporation, in its
discretion, may allow the Option to be fully exercised, to the extent that the
Employee was entitled to exercise the Option at the date of his disability.
c. Death of the Optionee. In the event that an Employee shall
die while he is an employee of the Corporation (or within one (1) year after the
termination of such employment) and prior to his complete exercise of the
Option, the Option may be exercised in whole or in part only: (i) by the
Employee's estate or on behalf of such person or persons to whom the Employee's
rights pass under his Will or by the laws of descent and distribution, (ii) to
the extent that the Employee was entitled to exercise the Option at the date of
his death, and (iii) prior to the expiration of the term of the Option, or
within one year after the date of death, whichever is earlier.
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SECTION 6. Piggyback Registration.
a. If, at any time commencing January 1, 1997 and expiring
December 31, 2003, the Corporation proposes to register any of its securities
under the Securities Act (other than in connection with a merger or pursuant to
Form S-8 or other comparable Form) it will give written notice by registered
mail, at least thirty (30) days prior to the filing of such registration
statement, to the Employee of its intention to do so. If the Employee notifies
the Corporation within ten (10) days after receipt of any such notice of his
desire to include any Option Shares, owned by him (on a fully vested basis) in
such proposed registration statement, the Corporation shall afford the Employee
the opportunity to have any of his Option Shares registered under such
registration statement, the Corporation shall afford the Employee the
opportunity to have any of his Option Shares registered under such registration
statement; provided that (i) such inclusion does not pose any significant legal
problem and (ii) if such registration statement is filed pursuant to an
underwritten public offering, the underwriter approves such inclusion.
b. Notwithstanding the provisions of this Section 6, the
Corporation shall have the right at any time after it shall have given written
notice pursuant to this Section 6 (irrespective of whether a written request for
inclusion of any Option Shares shall have been made) to elect not to file any
such proposed registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
c. Employee will cooperate with the Corporation in all
respects in connection with this Agreement, including, timely supplying all
information reasonably requested by the Corporation and executing and returning
all documents reasonably requested in connection with the registration and sale
of the Option Shares. In addition, Employee will comply with all applicable
provisions of state and federal securities laws, including rule 10b-6 and will
not, during the course of a distribution, purchase any of the securities being
distributed.
d. All expenses incurred in any registration of the Option
Shares under this Agreement shall be paid by the Corporation, including, without
limitation, printing expenses, fees and disbursements of counsel for the
Corporation, expenses of any audits to which the Corporation shall agree or
which shall be necessary to comply with governmental requirements in connection
with any such registration, all registration and filing fees for the Option
Shares under federal and state securities laws, and expenses of complying with
the securities or blue sky laws of any jurisdictions; provided, however, the
Corporation shall not be liable for (a) any discounts or commissions to any
underwriter; (b) any stock transfer taxes incurred with respect to Option Shares
sold in the offering or (c) the fees and expenses of counsel for Employee,
provided that the Corporation will pay, the costs and expenses of Employee's
counsel
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when the Corporation's counsel is representing all selling security holders.
SECTION 7. Transfer of Option; Successors And Assigns.
This Agreement (including the Option) and all rights hereunder shall not be
transferable at any time without the prior written consent of the Corporation.
This Agreement and all the rights hereunder shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns and
transferees.
SECTION 8. Notices. All notices or other communications
which are required or permitted hereunder shall be in writing and sufficient if
delivered personally or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
If the Corporation, to:
ACTV, Inc.
1270 Avenue of the Americas - Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Chief Executive Officer
With a copy to:
Xxx X. Xxxxxxxxx, Esquire
Xxxxxxx, Savage, Kaplowitz, Xxxxxxxxxx & Xxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Employee, to:
Xxxxx Xxxxxxx
000 Xxxx 00xx Xxxxxx, Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have been given on the
third business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. Governing Law. This Agreement shall be
governed by, and construed in accordance with the laws of the State of New York.
SECTION 10. Entire Agreement. This Agreement contains the
entire agreement between the parties hereto with respect to the transactions
contemplated herein and supersedes all previously written or oral negotiations,
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commitments, representations and agreement.
SECTION 11. Amendments and Modifications. This Agreement,
or any provision hereof, may not be amended, changed or modified without the
prior written consent of each of the parties hereto.
SECTION 12. Termination. In addition to the termination
provisions set forth in Section 1 hereof, the Option shall terminate and the
Option shall no longer be exercisable on December 31, 2002.
IN WITNESS WHEREOF, the parties hereto have caused this Option
Agreement to be executed and delivered as of the date first above written.
ACTV, Inc.
By:
---------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
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