EXHIBIT 10.23
MEDIA & ENTERTAINMENT HOLDINGS, INC.
STOCK OPTION AGREEMENT
AGREEMENT (this "Agreement") dated as of the 25 day of April, 2006 (the
"Date of Grant"), by and between MEDIA & ENTERTAINMENT HOLDINGS, INC., a
Delaware corporation having offices at 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxx
00000 (the "Company"), and XXXXXX X. XXXXXX, an individual residing at 0 Xxxxx
Xxxxx Xxxx, Xxxxxxxx, XX 00000 (the "Optionee");
W I T N E S S E T H:
WHEREAS, simultaneous with the execution and delivery of this Agreement,
the Optionee has agreed to serve on the Board of Directors of the Company as an
"independent" director; and
WHEREAS, in order to incentivize the Optionee by providing him the
opportunity to participate in any future growth of the Company, the Company has
determined to grant to the Optionee an option to purchase shares of common stock
of the Company, par value $.0001 per share ("Common Stock"), subject to and in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. GRANT OF STOCK OPTION.
Subject to the terms and conditions of this Agreement, the Company
hereby grants to the Optionee the right and option (the "Option") to purchase up
to one hundred thousand (100,000) shares of Common Stock (the "Option Shares")
at a price of $8.00 per share (the "Exercise Price").
2. VESTING OF OPTION.
(a) The Option may not be exercised unless it has vested in
accordance with the provisions of this Section 2.
Option Shares, upon consummation of the Company's initial business combination,
provided and on condition that the Optionee has remained as a director of the
Company throughout the period from April 2006 through and including the date of
the Company's initial business combination,
(ii) as to an additional one-third of the Option Shares, on the first
anniversary of the Company's initial business combination, provided and on
condition that the Optionee has remained as a director of the Company throughout
the period from April 2006 through and including the first anniversary of the
Company's initial business combination, and (iii) as to the final one-third of
the Option Shares, on the second anniversary of the Company's initial business
combination, provided and on condition that the Optionee has remained as a
director of the Company throughout the period beginning on April 2006 and ending
on the second anniversary of the Company's initial business combination.
3. DURATION OF OPTION.
The Option shall expire and all rights to purchase shares pursuant
hereto (to the extent not previously exercised) shall cease and terminate on
that date which is the day before the fifth (5th) anniversary of the Date of
Grant set forth above (the "Expiration Date").
4. EXERCISE OF OPTION.
A person entitled to exercise the Option may exercise the Option (if
and to the extent then vested in accordance with Section 2 above) in whole at
any time, or in part from time to time, by delivering to the Company at its
office first set forth above (or any other office hereafter designated by the
Company for the purpose), directed to the attention of the Chief Financial
Officer of the Company (or any other officer hereafter designated by the Company
for the purpose), written notice specifying the number of shares of Common Stock
with respect to which the Option (if and to the extent then vested in accordance
with Section 2 above) is being exercised, together with payment in full of the
Exercise Price for such shares. Such payment shall be made in cash or by
certified check or bank draft to the order of the Company; PROVIDED, HOWEVER,
that the Company may, in its sole discretion, authorize and permit such payment,
in whole or in part, in any other form, including payment by personal check or
by the exchange of shares of Common Stock of the Company then owned of record by
the person entitled to exercise the Option and having a fair market value on the
date of exercise equal to the price for which the shares of Common Stock may be
purchased pursuant to the Option.
5. ADJUSTMENTS.
(a) The number of shares of Common Stock covered by the Option,
and the Exercise Price, shall be proportionately adjusted for any increase or
decrease in the number of issued and/or outstanding shares of Common Stock
resulting from a stock split, combination of shares, recapitalization or other
subdivision or consolidation of shares or other capital adjustment, or the
payment of a stock dividend in respect of the Common Stock; provided, however,
that any fractional shares resulting from any such adjustment shall be
eliminated.
(b) From time to time as and when any adjustments may be required
pursuant to this Section 5, the Company shall endeavor to give written notice to
the Optionee of the event requiring such adjustment, which notice shall further
set forth the Company's calculation of the required adjustment to the number of
shares of Common Stock covered by the Option, and the Exercise Price therefor.
6. MERGER, CONSOLIDATION, ETC.
In the event that the Company shall, pursuant to action by its Board
of Directors, at any time propose to merge into, consolidate with, or sell or
otherwise transfer all of its assets to, another corporation and provision is
not made pursuant to the terms of such transaction for (a) the assumption by the
surviving, resulting or acquiring corporation of the Option, (b) the
substitution of a new option therefor, or (c) the payment of cash or other
consideration in respect thereof, then the Company shall give written notice of
the proposed transaction to the Optionee not less than thirty (30) days prior to
the anticipated effective date of the proposed transaction. On a date which the
Company shall specify in such notice, which date shall not be less than ten (10)
days prior to the anticipated effective date of the proposed transaction, the
Option shall (to the extent then in effect) become fully (100%) vested and the
Optionee shall have the right to exercise the Option to purchase any or all
shares then subject to the Option; and if the proposed transaction is
consummated, the Option, to the extent not previously exercised prior to the
effective date of the transaction, shall terminate on such effective date. If
the proposed transaction is abandoned or otherwise not consummated, then to the
extent that the portion of the Option not exercised prior to such abandonment
shall have vested solely by operation of this Section 6, such vesting shall be
annulled and be of no further force or effect and the vesting periods set forth
in Section 2 above shall be reinstituted as of the date of such abandonment;
provided, however, that nothing herein contained shall be deemed to
retroactively affect or impair any exercise of any such vested Option prior to
the date of such abandonment.
7. NON-TRANSFERABILITY.
(a) The Option shall not be transferable other than (i) to any
transferee who is a member of the immediate family (i.e., spouse, child, natural
parent, brother or sister) of the original Optionee hereunder, or (ii) by will
or the laws of descent and distribution.
(b) In no event and under no circumstances shall the Optionee or
any other person entitled to exercise the Option pledge, hypothecate, or xxxxx x
xxxx upon or security interest in any interest in this Agreement or the Option.
8. NO RIGHTS AS STOCKHOLDER.
The Optionee shall not have any rights as a stockholder of the
Company with respect to any shares covered by the Option prior to the date of
issuance to the Optionee of the certificate or certificates for such shares.
9. ISSUANCE OF SHARES; RESTRICTIONS.
(a) Subject to the conditions, restrictions and other
qualifications provided in this Section 9, the Company shall, within thirty (30)
business days after the Option has been duly exercised in whole or in part,
deliver to the person who exercised the Option one or more certificates,
registered in the name of such person, for the number of shares of Common Stock
with respect to which the Option has been exercised. The Company may legend any
stock certificate issued hereunder to reflect any restrictions provided for in
this Section 9, including but not limited to a "stop transfer" legend pursuant
to Section 9(b) below.
(b) Unless the shares subject to the Option have been registered
under the Securities Act of 1933, as amended (the "Act") (and, if the person
exercising the Option may be deemed an "affiliate" of the Company as such term
is defined in Rule 405 under the Act, such shares have been registered under the
Act for resale by such person), or the Company has determined that an exemption
from registration under the Act is available, (i) any exercise of the Option
shall be deemed a confirmation by the person effecting such exercise that he or
she is acquiring the subject Option Shares for his or her own account for
investment, and not with a view to the resale or distribution of all or any part
thereof, and (ii) the Company may require, prior to and as a condition of the
issuance of any shares of Common Stock pursuant to such exercise, that the
person exercising the Option furnish the Company with a further written
representation in a form prescribed by the Company to the effect that (A) such
person is acquiring such shares solely with a view to investment for such
person's own account and not with a view to the resale or distribution of all or
any part thereof, and (B) such person will not dispose of any of such shares
otherwise than in accordance with the provisions of Rule 144 under the Act
unless and until either the sale or distribution of such shares is registered
under the Act or the Company is satisfied that an exemption from such
registration is available.
(c) Anything herein contained to the contrary notwithstanding, the
Company shall not be obliged to sell or issue any shares of Common Stock
pursuant to the exercise of the Option unless and until the Company is satisfied
that such sale or issuance complies with all applicable provisions of the Act
and all other laws and/or regulations by which the Company is bound or to which
the Company or such shares are subject; and the Company reserves the right to
delay the delivery of Option Shares for such period of time as may be required
in order to effect compliance with the applicable provisions of the Act and all
other applicable laws and/or regulations as aforesaid.
10. RESERVATION OF COMMON STOCK.
The Company shall at all times reserve and keep available for
issuance upon the exercise of the Option such number of shares of Common Stock
(whether unissued or treasury or both) as shall be sufficient to permit the full
exercise of the Option.
11. EXPENSES.
The Company shall pay any and all expenses, transfer taxes and other
charges, including all costs associated with the preparation, issuance and
delivery of stock certificates, that may be incurred in respect of the issuance
or delivery of Option Shares upon any exercise of the Option.
12. MISCELLANEOUS.
(a) No provision hereof, in the absence of affirmative action by
the Optionee (or other person entitled to exercise the Option at such time) to
effect any exercise hereunder, shall give rise to any liability of the Optionee
(or any such other person) for the Exercise Price or as a stockholder of the
Company, regardless of whether such liability is asserted by the Company or by
any creditor or creditors of the Company.
(b) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified, except with the written consent of
the Company and the Optionee.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(d) The captions and Section headings used in this Agreement are
for convenience of reference only, and shall not affect or be referred to in
connection with any interpretation or construction hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Date of Grant first set forth above.
MEDIA & ENTERTAINMENT HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Chief Operating Officer
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
Optionee Social Security No.:
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