OPTION AGREEMENT
SFX ENTERTAINMENT, INC.
This Agreement, effective as of March 20, 1998, between SFX ENTERTAINMENT,
INC., a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxx ("Grantee").
WHEREAS, Company has agreed to employ Grantee; and
WHEREAS, the Company desires to provide an incentive to Grantee to
encourage stock ownership and to remain an employee of the Company; and
WHEREAS, the achievement of these goals will be assisted by the grant of
a non-qualified option to purchase shares of the Company's Class A Common
Stock, $.01 par value (the "Class A Common Stock");
NOW, THEREFORE, the parties agree as follows:
1. Grant of Option. The Company hereby grants to Grantee, subject to the
terms and conditions herein set forth, the right and option to purchase from
the Company all or any part of an aggregate of 6,500 shares of Class A Common
Stock at the purchase price of $13.33 per share representing the fair market
value as of the date hereof, such option to be exercisable as hereinafter
provided.
2. Terms and Conditions. The option evidenced hereby is subject to the
following terms and conditions:
(a) Expiration Date. The option shall expire on March 20, 2008.
(b) Exercise of Option. The option is fully, completely and
unconditionally vested as of the date of this Agreement and may
be exercised, in whole or in part, at any time (from time to
time) before the expiration date of the option as provided in
paragraph (a) above. Any exercise shall be accompanied by a
written notice to the Company specifying the number of shares as
to which the option is being exercised. If Grantee shall so
request, shares of the Class A Common Stock purchased upon
exercise of an option may be issued in the name of Grantee or
another person.
(c) Payment of Purchase Price. At the time of any exercise, Grantee
shall deliver to the Company, together with the notice provided
in paragraph (b) above, the full amount of the purchase price
therefor either by bank cashier's check or certified check
payable to the Company or in Class A Common Stock
delivered by Grantee valued at the Closing Price of the Class A
Common Stock, or any combination of cash or Class A Common Stock.
The term "Closing Price" shall be the last sale price on the date
of the exercise of the option or, in the case no sale takes place
on such date, the average of the high and low sales prices on the
next preceding trading day, in either case as reported by NASDAQ,
or if the shares of Class A Common Stock are not listed or
admitted to trading on NASDAQ, the average high bid and low asked
prices on the principal National Securities Exchange in which the
Class A Common Stock is listed or admitted to trading. If the
Class A Common Stock is not traded such that the Closing Price can
be determined in accordance with the preceding sentence, the
Closing Price shall mean the fair market value of the Class A
Common Stock as of the last day of the measuring period as
determined by an independent investment banker approved by the
Company and Grantee.
(d) Exercise Upon Termination of Employment. Any option granted
hereunder may be exercised by Grantee, his heirs, devises,
legatees, legal representative or assigns at any time up to and
including March 20, 2008, whether or not Grantee shall cease to
be an employee of the Company for any reason, including, without
limitation, termination by voluntary resignation, by action of
the Company, for cause, without cause, or by reason of death or
disability.
(e) Transferability of Option and Shares Acquired Upon Exercise of
Option. This option shall be transferable only by will or the
laws of descent and distribution; provided Grantee may transfer
the option with the consent of the Company. Except as limited by
applicable securities laws, shares of Class A Common Stock
acquired upon exercise of this option hereunder shall be freely
tradeable.
(f) Adjustment of the Changes in the Stock. (i) In the event the
shares of Class A Common Stock, as presently constituted, shall
be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another
corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise) or if the number of such
shares of Class A Common Stock shall be increased through the
payment of a stock dividend, then there shall be substituted for
or added to each share of Class A Common Stock theretofore
appropriated or thereafter subject or which may become subject to
an option, the number and kind of shares of stock or other
securities into which each outstanding share of Class A Common
Stock shall be so changed, or to which each such share shall be
entitled, as the case may be. Outstanding options shall also be
appropriately amended as to price and other terms as may be
necessary to reflect the foregoing events. In the event there
shall be any other change in the number or kind of the
outstanding shares of the Class A Common Stock, or of any stock
or other securities into
which such Class A Common Stock shall have been changed, or for
which it shall have been exchanged, then, if the Board of
Directors shall, in its sole discretion, determine that such
change equitably requires an adjustment in any option theretofore
granted, such adjustments shall be made in accordance with such
determination. Fractional shares resulting from any adjustment in
options may be settled in cash or otherwise as the Committee
shall determine. Notice of any adjustment shall be given by the
Company to each holder of an option which shall have been so
adjusted and such adjustment (whether or not such notice is
given) shall be effective and binding.
(ii) Further, in the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares,
consolidation, merger (other than a merger or consolidation which
does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares), any sale or transfer by the
Company of all or substantially all of its assets or any tender
offer or exchange offer for or the acquisition, directly or
indirectly, by any person or group of all or a majority of the
then outstanding voting securities of the Company, rights
offering, or any other change in the corporate structure or
rights with respect to any shares of the Company, adjustments
shall be made to the number or type of stock subject to this
Agreement and, in order to prevent dilution or enlargement of the
rights of Grantee, to the number of shares of Class A Common
Stock subject to the option, and the type and option price of
the Class A Common Stock subject to the then outstanding option.
(g) Withholding. Grantee may elect that shares of the Class A Common
Stock valued at the Closing Price be applied towards the payment
of withholding taxes.
(3) Registration. The Company shall register all the shares underlying
the option on a Registration Statement with the Registration Statement filed
for the shares underlying the Company's 1998 Stock Option and Restricted Stock
Plan (the "Plan") or on Form S-8 as soon as reasonably practical after the
filing of the Registration Statement for the Plan, but in no event later than
120 days after the date the Class A Common Stock shall first be traded on
NASDAQ (on other than a when issued basis). If the shares underlying the option
granted hereunder have not been registered by the Company by the date of
exercise of the option, the Company shall cause such shares to be registered on
Form S-3 upon Grantee's exercise of the option.
(4) Non-Qualified Stock Options. The Company and Grantee acknowledge the
stock options granted hereunder shall be treated as non-qualified stock options
for U.S. federal income tax purposes.
(5) Grantee to Have No Rights as a Stockholder. With regard to the stock
underlying the option (from time to time) Grantee shall not have the rights of
a stockholder until Grantee has timely exercise the option relating to such
stock and paid in full the option price relating thereto.
6. Notice. Notice to the Company shall be deemed given if in writing and
mailed to the Secretary of the Company at its principal executive offices by
first class, certified mail at the then principal office of the Company.
7. Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of Delaware.
8. Binding Agreement. This Agreement constitutes the binding agreement of
the parties with respect to the grant of options to Grantee. The Company
represents and warrants to Grantee that this Agreement and the grant of options
hereunder has been duly authorized pursuant to any necessary corporate action.
This Agreement may not be modified except by the mutual agreement of the
parties in writing. In the event of any overlap, inconsistency, contradiction
or any other conflict between this Agreement and any other agreement, option
plan, policy or other statement, this Agreement shall be controlling.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year written above.
SFX ENTERTAINMENT, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Vice President
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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