Exhibit 10.21
Exhibit A
STOCK OPTION AGREEMENT
BETWEEN
XXXXXX XXXXXX-XXXXX
AND @ ENTERTAINMENT, INC.
This Stock Option Agreement ("Option Agreement") is made effective as
of June 8, 1998 (the "Effective Date"), by and between Xxxxxx Xxxxxx-Xxxxx
("Xxxxxx-Xxxxx") and @Entertainment, Inc., a Delaware corporation (the
"Company"), pursuant to the @Entertainment, Inc. 1997 Stock Option Plan, as
amended (the "Plan").
1. Grant of Option and Option Period.
a. The Company hereby grants Xxxxxx-Xxxxx an option (the
"Option") to purchase Two Hundred Thousand shares (200,000) (the "Shares") of
the Company's common stock ("Common Stock"), with a par value of $0.01 per
share, pursuant to the terms and conditions set forth in this Option Agreement.
The exercise price for the Option (the "Exercise Price") shall be Fourteen
Dollars and Thirty Cents (U.S. $14.30) per share.
b. The option to purchase Sixty-six Thousand Six Hundred
Sixty-seven (66,667) of these Shares will vest each year on the anniversary date
of the Effective Date beginning with the first anniversary of the Effective
Date, provided, however, that (i) the Option shall vest in full immediately (A)
on the date of change in control of the Company (for purposes of this clause,
the term "change in control" shall have the same meaning, except with respect to
the Company rather than Poland Communications, Inc. ("PCI") as that term has in
the Indenture dated as of October 31, 1996, between PCI and State Street Bank
and Trust Company as trustee with respect to those certain 9 7/8% Senior Notes
of the Company due 2003 (the "Indenture")), and (ii) no portion of the Option
shall vest after the date (the "Cut-Off Date") that is the earlier of (i) the
date that the Executive Employment Agreement (as described in Section 14 of this
Agreement) is terminated, and (ii) the date on which the Company sends
Xxxxxx-Xxxxx a notice referred to in 8(b) of the Executive Employment Agreement.
c. If Xxxxxx-Xxxxx'x employment with the Company, or any of
its affiliates, is terminated for any reason, Xxxxxx-Xxxxx shall have only sixty
(60) days after the Cut-Off Date to exercise that portion of the Option that has
vested as of the Cut-Off Date, and Xxxxxx-Xxxxx shall have no right to exercise
any portion of the Option that has not then vested.
d. Notwithstanding any other provision of this Option
Agreement, the Option shall expire and be of no further force or effect with
respect to any Shares on the earlier to occur of (i) the tenth anniversary of
the Effective Date or (ii) sixty days after the date that Xxxxxx-Xxxxx ceases
to be an employee of the Company, or any of its affiliates, for any reason
whatsoever
Exhibit A - Page 1
(including but not limited to Xxxxxx-Xxxxx'x death, disability, voluntary
termination or involuntary termination).
e. Each exercise of the Option shall reduce, by an equal
number, the total number of shares of Common Stock that may thereafter be
purchased by Xxxxxx-Xxxxx under the Option.
2. Manner of Exercise.
Subject to the conditions and restrictions contained in Section 3
below, the Option shall be exercised by delivering written notice of exercise to
the Secretary of the Company. Such notice shall be irrevocable and must be
accompanied by payment in cash, banker's draft or such other form of
consideration as the Company may approve, and a signed Subscription Agreement,
reasonably acceptable to both parties.
3. Non-transferability.
Neither this Option nor any interest therein may be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner (other than by
will or by the laws of descent and distribution during the option period
described in Section 1, or in a manner as may be established from time to time
by the Company's Stock Option Committee pursuant to the Plan ). This Option is
not assignable by operation of law or subject to execution, attachment or
similar process. During Xxxxxx-Xxxxx'x lifetime, the Option can only be
exercised by Xxxxxx-Xxxxx. Any attempted sale, pledge, assignment, hypothecation
or other transfer of the Option or any interest therein contrary to the
provisions hereof, or the levy of any execution, attachment or similar process
upon the Option or any interest therein shall be null and void and without force
or effect. No transfer of the Option by will or by the laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished written notice thereof executed by the personal
representative of the estate of Xxxxxx-Xxxxx which shall be accompanied by an
authenticated copy of the letters testamentary appointing such personal
representative, or such other evidence as the Company may deem reasonably
necessary to establish the validity of the transfer, and also evidence as the
Company may deem reasonably necessary to establish the acceptance by the
transferee or transferees of the terms and conditions of the Option. The terms
of the Option transferred by will or by the laws of descent and distribution
shall be binding upon the executors, administrators, heirs and successors of
Xxxxxx-Xxxxx.
4. Adjustment in the Event of Change in Stock.
In the event of any change in the outstanding Common Stock of the
Company due to stock dividends, recapitalizations, reorganizations, mergers,
consolidations, split-ups, rights offering, warrants, or exchange of shares, the
number and kind of the Shares and/or the purchase price per Share will be
appropriately adjusted, upwards or downwards, consistent with such change. The
reasonable determination of the Company regarding any adjustment will be final
and conclusive.
Exhibit A - Page 2
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of the Shares.
5. No Stock Rights.
Xxxxxx-Xxxxx shall not be entitled to vote, be deemed the holder of any
Shares, have the right to receive dividends with respect to any Shares, or
otherwise have any of the rights of a stockholder of the Company with respect to
any Shares, unless and until Xxxxxx-Xxxxx has exercised the Option with respect
to such Shares in accordance with the terms and conditions of this Option
Agreement.
6. Reservation and Issuance of Shares.
a. The Company will at all times have authorized, and reserve
and keep available, free from preemptive rights, the number of shares of Common
Stock that is sufficient for the purpose of enabling it to satisfy any
obligation to issue the shares of Common Stock upon exercise of the Option.
b. The Company covenants that all Shares will, upon issuance
in accordance with the terms of this Agreement, be duly authorized, fully paid
and non-assessable.
7. Lock-up Agreement
During the term of this Option Agreement, Xxxxxx-Xxxxx if requested by
the Company and the lead underwriter of any public offering of the Common Stock
or other securities of the Company (the "Lead Underwriter"), hereby irrevocably
agrees not to sell, contract to sell, grant any option to purchase, transfer the
economic risk of ownership in, make any short sale of, pledge or otherwise
transfer or dispose of any interest in any Common Stock or any securities
convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock (except Common Stock included in such public
offering or acquired on the public market after such offering) during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act of 1933, as amended, or such shorter
period of time as the Lead Underwriter shall specify. Xxxxxx-Xxxxx further
agrees to sign such documents as may be requested by the Lead Underwriter to
effect the foregoing and agrees that the Company may impose stop-transfer
instructions with respect to such Common Stock or such other securities subject
until the end of such period. The Company and Xxxxxx-Xxxxx acknowledge that each
Lead Underwriter of a public offering of the Company's stock, during the period
of such offering and for the 180-day period thereafter, is an intended
beneficiary of this Section 7.
8. Representations and Warranties of Xxxxxx-Xxxxx. In order to induce
the Company to accept this Option Agreement, Xxxxxx-Xxxxx hereby represents and
warrants to the Company as follows:
Exhibit A - Page 3
a. If in the future Xxxxxx-Xxxxx desires to offer or dispose
of the Option or any the Shares or any interest therein, he will do so only in
compliance with applicable securities laws and this Option Agreement.
x. Xxxxxx-Xxxxx acknowledges that there may be restrictions
under the securities laws of the jurisdiction(s) in which he resides on the sale
of the Shares he obtains on exercise of the Option, and that he should seek
legal assistance before proceeding with the purchase or sale of said Shares.
x. Xxxxxx-Xxxxx agrees that the representations and warranties
of Xxxxxx-Xxxxx set forth in this Section 8 shall survive the exercise of the
Option and the termination or expiration of this Option Agreement for a period
of six months.
9. Governing Law.
This Option Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to the principles
of conflicts of laws or choice of law.
10. Benefit.
This Option Agreement shall be binding upon the Company, Xxxxxx-Xxxxx,
their heirs, executors, administrators, legal representatives, successors, and
permitted assigns, and Xxxxxx-Xxxxx in furtherance thereof may execute a will
directing Xxxxxx-Xxxxx'x executor to perform this Option Agreement and to
execute all documents necessary to effectuate the purposes of this Option
Agreement, but the failure to execute such a will shall not affect the rights of
the Company or the obligations of Xxxxxx-Xxxxx'x estate as provided in this
Option Agreement. Nothing in this Option Agreement, expressed or implied, is
intended to confer upon any person, other than the parties hereto, any rights or
remedies under or by reason of this Option Agreement.
11. Specific Performance.
The parties to this Option Agreement hereby agree that an award of
damages alone is inadequate to remedy a breach of terms of this Option Agreement
and that specific performance, injunctive relief or other equitable remedy is
the only way by which the intent of this Option Agreement may be adequately
realized upon breach by one or more of the parties. Such remedy shall, however,
be cumulative and not exclusive, and shall be in addition to any other remedy
which the parties may have.
12. Waiver.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions of this Option Agreement shall not be deemed a waiver of
such terms, covenants or conditions, nor
Exhibit A - Page 4
shall any waiver or relinquishment of any right or power hereunder at any one
time or more times be deemed a waiver or relinquishment of such right or power
at any other time or times.
13. Notice.
a. All notices required to be given under the terms of this
Agreement or which any of the Parties may desire to give hereunder shall be in
writing and delivered personally or sent by express delivery, by facsimile, or
by registered or certified mail with proof of receipt, postage and expenses
prepaid and with return receipt requested addressed as follows:
If to the Company:
@ Entertainment, Inc.
xx. Xxxxxxxxxxx 0X
Xxxx X
00-000 Xxxxxx, Xxxxxx
Facsimile: (00-00) 000-0000
Attention: Xxxxxxxxxx Xxxxx
With a copy to:
Xxxx X. Xxxx
Xxxxx & XxXxxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
U. S. A.
Facsimile: (000) 000-0000
If to Xxxxxx-Xxxxx:
Xxxxxx Xxxxxx-Xxxxx
00 Xx. Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Facsimile: (00-000) 000 0000
b. Notice given in accordance with this Section 13 shall be
deemed to have been given when delivered personally, or when received if sent
via express delivery, facsimile, or registered or certified mail, postage
prepaid and return receipt requested.
Exhibit A - Page 5
c. Any party may change its address for notices by
communicating its new address in writing to the other party.
14. Entire Agreement.
This Option Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by writing executed by all of the parties.
15. Severability.
The invalidity or unenforceability of any provisions of this Option
Agreement shall in no way affect the validity or enforceability of any other
provision hereof.
16. Headings.
The headings to the sections of this Option Agreement are used for
reference only and are not to be construed as limiting or extending the
provisions hereof.
17. Counterparts.
This Option Agreement may be executed in any number of counterparts,
each of which shall be considered an original but all of which shall constitute
the Option Agreement by and among the parties.
IN WITNESS THEREOF, the undersigned have executed this Option Agreement
effective as of the date first above written.
@ ENTERTAINMENT, INC.,
a Delaware corporation
By: ___________________________
Its: __________________________
________________________________
Exhibit A - Page 6
Xxxxxx Xxxxxx-Xxxxx
Exhibit A - Page 7
