EXHIBIT 4.7
BET HOLDINGS II, INC.
RESTATED STOCK OPTION AGREEMENT
THIS RESTATED STOCK OPTION AGREEMENT, dated as of July 30, 1998, is
made between BET HOLDINGS II, INC. (the "Company") and Xxxxx X. Xxx (the
"Eligible Executive").
WITNESSETH:
WHEREAS, BET Holdings, Inc. has previously issued certain stock options
("Original Options") to the Eligible Executive to purchase shares of Class A
common stock of BET Holdings, Inc.; and
WHEREAS, the Company shall be the ultimate parent corporation in
connection with the Agreement and Plan of Merger among Xxxxxx X. Xxxxxxx
("Xxxxxxx"), Liberty Media Corporation ("Liberty"), BTV Acquisition Corporation
and BET Holdings, Inc.; and
WHEREAS, pursuant to such Agreement and Plan of Merger and this
Agreement, one-half of the outstanding Original Options held by the Eligible
Executive as of the effective date of the transactions contemplated in the
Agreement and Plan of Merger shall be cancelled and the Eligible Executive shall
become entitled to receive in respect thereof a cash payment, which cash payment
shall be determined by reference to the differential between (i) Sixty-Three
Dollars ($63.00) multiplied by the number of shares of common stock of BET
Holdings, Inc. which could otherwise have been purchased pursuant to the
exercise of such cancelled Original Options and (ii) the aggregate exercise
price attributable to all such cancelled Original Options; and
WHEREAS, the Original Options previously issued to the Eligible
Executive by BET Holdings, Inc. which are not so cancelled shall become options
("Company Options") to acquire Common Stock ("Common Stock") in the Company, as
the ultimate parent of the corporate group which previously included BET
Holdings, Inc., pursuant to the terms and conditions of this Restated Stock
Option Agreement, it being the intention of the parties to fully vest the
remaining Original Options, to cause the Options used to restate such Original
Options to have an initial value on the date of restatement equal to the
differential between (i) Sixty-Three Dollars ($63.00) multiplied by the number
of shares of Class A common stock of BET Holdings, Inc. which could otherwise
have been purchased pursuant to the exercise of such cancelled Original Options
and (ii) the aggregate exercise price attributable to all such cancelled
Original Options, to subject any stock acquired pursuant to the exercise of such
remaining Original Options to certain terms and conditions as more fully set
forth herein and to allow the restatement of such remaining Original Options
into Options hereunder in such manner as shall satisfy the requirements of
Section 424(a) of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, in consideration of the premises and of the covenants
and agreements herein set forth, the parties mutually covenant and agree as
follows:
1. Ratification of Outstanding Original Options. Pursuant to the
Agreement and Plan of Merger, outstanding options to purchase One Hundred
Nineteen Thousand Five Hundred and Fifty-Four (119,554) shares of Class A common
stock of BET Holdings, Inc. held by the
Eligible Executive shall be cancelled (the "Cancelled Options") and the Eligible
Executive shall become entitled to receive in respect of such Cancelled Options
a cash payment equal to the difference between (i) Sixty-Three Dollars ($63.00)
multiplied by the number of shares of Class A common stock which could have been
purchased by the Eligible Executive upon exercise of the Cancelled Options and
(ii) the aggregate exercise price of all Cancelled Options. The options to
purchase One Hundred Nineteen Thousand Five Hundred and Fifty-Four (119,554)
shares of Class A common stock which are not being cancelled (the "Remaining
Options") shall, pursuant to this Agreement and Plan of Merger, remain
outstanding following the merger. Such Remaining Options shall, by virtue of the
merger and the reorganization transactions following the merger, constitute
Company Options to purchase One Hundred Nineteen Thousand Five Hundred and
Fifty-Four (119,554) shares of Common Stock. The Company Options shall be deemed
to have been issued pursuant to the BET Holdings, Inc. 1991 Executive Stock
Option Plan, as amended and restated through July 30, 1998 in the form of the
BET Holdings II, Inc. 1998 Executive Stock Option Plan (the "Plan"), the
provisions of which are hereby incorporated by reference. The Plan is hereby
adopted and assumed by the Company and the Company hereby assumes the
obligations in respect of the Company Options. The exercise price per share, the
remaining term of each Company Option and the characteristic of each Company
Option as an Incentive Stock Option or as a Nonqualified Option are set forth
below:
Number of Company
Shares Subject to Exercise Price Per Incentive Stock Option (ISO) or
Company Options Company Option Expiration Date Nonqualified Stock Option (NQ)
------------------ ------------------ --------------- -------------------------------
o 29,220 $13.125 11/20/02 29,220 ISO
o 5,334 $12.800 04/22/04 5,334 NQ
o 85,000 $17.750 07/12/05 85,000 NQ
No portion of the above-referenced Company Options may be exercised prior to the
expiration of six (6) months from the date of this Restated Stock Option
Agreement, as set forth above.
The purchase price of the shares of Common Stock to be acquired through
the exercise of any Company Option intending to be an Incentive Stock Option is
based upon the Fair Market Value of the Common Stock, as defined by the Plan, as
of the date on which the Company Option was originally granted. (The parties
agree that any Company Options previously issued which are not described above
have been cancelled and the Eligible Executive has received a cash payment equal
to the value of such cancelled Company Options.)
2. Terms and Conditions. In addition to the characteristics of the
Company Options set forth in the above chart, it is understood and agreed that
each Company Option is subject to the following terms and conditions in addition
to any terms and conditions of the Plan that are not restated herein (any such
terms being incorporated herein by reference):
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a. Sales of Stock.
i. Restrictions on Transferability. In addition to the voting
restrictions established pursuant to the BET Holdings II, Inc. Voting
Trust Agreement ("Voting Trust Agreement") referred to in Paragraph
2(f) below, the Eligible Executive understands and agrees that any
shares of Common Stock acquired pursuant to an exercise of a Company
Option shall be subject to the restrictions set forth in that certain
Stockholders' Agreement Term Sheet ("Stockholders' Agreement") and that
certain Letter Agreement dated September 11, 1997, both of which are
attached hereto as Exhibit A, and to which the Eligible Executive
consents and the Eligible Executive further acknowledges and agrees
that each of Xxxxxxx and Liberty shall be entitled to take any and all
actions determined in his or its sole discretion, including, but not
limited to, transactions involving Xxxxxxx and Liberty. More
specifically, the Eligible Executive acknowledges and agrees that
voting restrictions set forth in Section 2 of such Stockholders'
Agreement shall be applicable to the shares of Common Stock issuable
upon exercise of a Company Option during the term of such Stockholders'
Agreement, including, without limitation, following the date such stock
is released from the Voting Trust Agreement. In addition, the Eligible
Executive acknowledges and agrees to be bound by Section 3 of such
Stockholders' Agreement entitled "Fundamental Matters." The Eligible
Executive also acknowledges that she is not a party and has no rights
under the Stockholders' Agreement as in effect on July 30, 1998.
In lieu of the specific restrictions on transfer of shares of
Common Stock set forth in Section 4 of the above-referenced
Stockholders' Agreement, shares of Common Stock issued to the Eligible
Executive upon exercise of the Company Options shall have the rights
and be subject to the restrictions set forth below:
A. For a period of three (3) years commencing upon the
acquisition of any shares of Common Stock upon exercise of all or
any portion of this Company Option, the Eligible Executive may not
sell, transfer, assign, give, pledge, hypothecate or otherwise
dispose of, directly or indirectly (a "Transfer"), any such shares
of Common Stock other than in a Permitted Transfer. As a condition
to the completion of each Permitted Transfer, the person or entity
to whom the shares of Common Stock are Transferred shall be required
to execute a written instrument, reasonably satisfactory to the
Company, agreeing to become subject to the terms and conditions of
this Agreement.
B. A "Permitted Transfer" shall mean any of the following
Transfers:
(1) A Transfer by the Eligible Executive of shares of
Common Stock, without consideration, in any of the following
situations:
(a) A Transfer to, or in trust for the benefit of,
members of her immediate family (consisting of her
parents, spouse, siblings, children, and grandchildren)
or an entity wholly-owned by the Eligible Executive
and/or members of the Eligible Executive's immediate
family.
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(b) A Transfer to a legal representative in the
event the Eligible Executive is adjudicated mentally
incompetent.
(2) A Transfer of Common Stock consented to in writing
by the Company.
The above-referenced three (3) year restriction shall apply
separately with respect to each share of Common Stock acquired in
connection with the exercise of any portion of the Company Options
ratified herein.
ii. Right of First Refusal. In lieu of the "Right of First
Refusal" set forth in Section 5 of the above-referenced Stockholders'
Agreement, the Eligible Executive shall be subject to a Right of First
Refusal as set forth below and shall not be permitted to transfer any
shares of Common Stock (other than through a transfer which is a
"Permitted Transfer" as defined above) except pursuant to a Third
Party Offer, as described below, with respect to which the following
procedures have been followed:
A. If an Eligible Executive has received a bona fide offer
from an unaffiliated third party (a "Third Party Offer") to purchase
for cash all or any portion consisting of a least ten percent (10%)
of her shares of Common Stock, which offer the Eligible Executive
desires to accept, the Eligible Executive shall notify each of the
Company, Liberty and Xxxxxxx of such Third Party Offer to purchase
such shares of Common Stock for cash and the material terms thereof.
Such notice (the "Offer Notice") shall constitute an offer (the
"Offer") by the Eligible Executive to the Company, Liberty and
Xxxxxxx to purchase all, but not less than all, of the shares of
Common Stock which the Eligible Executive desires to sell for the
same consideration as such Third Party Offer.
B. If any of the Company, Liberty or Xxxxxxx desires to accept
such Offer, such person or entity (an "Accepting Offeree") shall
notify the Eligible Executive and each other offeree of its or his
acceptance within thirty (30) days of the date of delivery of the
Offer Notice. Thereafter, the Company, Xxxxxxx and Liberty shall
make the allocations provided for in Section 2(b) and deliver a
subsequent notice to the Eligible Exective specifying the number of
shares to be purchased by each such Accepting Offeree. Such notice
shall constitute the Accepting Offeree's agreement, subject to the
receipt of any applicable governmental consent or approval, to
purchase such shares of Common Stock for the consideration contained
in the Offer Notice. The closing of any such purchase shall occur on
the 30th day following the delivery of the original notice of
acceptance.
(1) In payment for the shares being purchased, each
Accepting Offeree shall execute a promissory note with the
principal thereof payable in a single balloon amount payable
upon the earlier to occur of ten (10) years from the date of
such note or ten (10) days from the date of closing of any
initial public offering involving the Common Stock. The
promissory note shall bear interest at a rate equal to one
percent (1%) in
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excess of the prime rate of interest in effect on the date of
execution of the promissory note, as published in The Wall
Street Journal on the Friday preceding the date of execution
and may be prepaid at any time without penalty. Interest shall
be payable on a quarterly basis. Each Accepting Offeree's
promissory note shall be the sole obligation of the maker
thereof.
(2) In connection with the determination of the relative
rights of the members or within the group constituting the
Company, Liberty and Xxxxxxx, the following principles shall
apply:
(a) The Company shall have the initial right to
accept the offer in its entirety and may assign any
portion of such right to any qualified retirement plan
then in existence on behalf of employees of the Company
or its affiliates. In the event that the Company does
not choose to accept the offer in its entirety, any
shares of Common Stock which are not acquired by the
Company shall be made available to Liberty and Xxxxxxx,
each of whom shall have a right to purchase one-half
(1/2) of the shares of Common Stock not purchased by the
Company. If either Liberty or Xxxxxxx does not choose to
purchase all of the shares of Common Stock then made
available to Liberty or Xxxxxxx, as the case may be, the
other party shall have the right to purchase any such
shares not so purchased by such party.
(b) If none of the Company, Liberty and Xxxxxxx
accept such Offer, the Eligible Executive shall be
entitled to sell such offered shares of Common Stock
pursuant to such Third Party Offer, provided that (i)
the closing of such transaction occurs within 120 days
of the date of delivery of the Offer Notice and (ii) the
terms and conditions of such sale (including price) are
no less favorable to the Eligible Executive than the
terms and conditions set forth in the Offer Notice. An
unaffiliated third party purchaser acquiring shares of
Common Stock in accordance with the foregoing procedures
shall acquire such shares free and clear of any
obligations, and shall have no rights under this
Agreement. Upon any sale of shares pursuant to the Right
of First Refusal set forth herein, the Eligible
Executive shall provide customary representations and
warranties to the Accepting Offerees as to the ownership
of the shares being sold and that such shares are free
and clear of all liens, pledges, security interests and
other encumbrances.
(3) The Right of First Refusal procedure set forth
herein shall expire on the date of consummation of the initial
public offering of the Common Stock (the "IPO").
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iii. Registration Rights. The Eligible Executive shall have
piggyback registration rights in connection with any initial public
offering of the shares of Common Stock subject to any requirements
imposed by the underwriters.
iv. Tag-Along Requirement. In the event of a sale to a third
party by Xxxxxxx and Liberty of all of their ownership interests in
shares of Common Stock prior to the date of the IPO, any shares of
Common Stock acquired by the Eligible Executive pursuant to the
prior exercise of the Company Options and any remaining Company
Options shall be sold to the same third party, on comparable and
appropriate economic terms and conditions.
b. Expiration Date. Except as otherwise provided in the Plan
and this Agreement, the Company Options ratified hereby may be
exercised by the Eligible Executive in whole or in part from time to
time, during the period beginning on the expiration of six (6) months
from the date of this Agreement and ending on the earlier of (i) the
expiration date set forth in Section 1 above or (ii) three (3) months
after the date on which the Eligible Executive ceases to be employed
by the Company or any Subsidiary Company as such term is defined in
the Plan (the "Option Period"). The Company Options shall expire at
the end of the Option Period.
c. Exercise of Company Option. Any exercise shall be
accompanied by a written notice to the Company specifying the number
of shares of Common Stock as to which the Company Option is being
exercised. Such written notice shall be substantially in the form of
Exhibit B attached hereto. Notation of any partial exercise shall be
made by the Compensation Committee of the Board of Directors of the
Company (the "Committee") on Schedule I hereto.
d. Payment of Purchase Price Upon Exercise. At the time of any
exercise and within the discretion of the Committee, the purchase
price of the shares of Common Stock shall be paid by the Eligible
Executive to the Company in cash or with shares of Common Stock
(including shares acquired pursuant to the exercise of a Company
Option) having a total Fair Market Value, as determined by the
Committee, equal to the purchase price, or a combination of cash and
shares of Common Stock having a total fair market value equal to the
purchase price.
e. Nontransferability. The Company Options ratified hereby
shall not be transferable other than by will or by the laws of descent
and distribution. During the lifetime of the Eligible Executive, the
Company Options shall be exercisable only by the Eligible Executive.
f. No Rights as Shareholder and Agreement to Enter into Voting
Trust Agreement. The Eligible Executive shall have no rights as a
shareholder with respect to any shares of Common Stock subject to the
Company Options ratified hereby prior to the date of issuance to her
of a certificate or certificates for such shares. In addition, the
Eligible Executive agrees that any shares of Common Stock acquired
before the earlier of (i) July 30, 2008 or (ii) the date of the IPO,
shall be reissued in the name of the then current Voting Trustee,
under the Voting Trust Agreement attached hereto as Exhibit C
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and that as a condition to the ratification of the Company Options
hereunder, the Eligible Executive shall execute such Voting Trust
Agreement.
g. Investment Representation. The Committee may require the
Eligible Executive (or such other person to whom the Company Option
may be transferred in accordance with the terms of this Agreement and
the Plan) to deliver to the Committee at the time the Company Options
ratified hereby or any portion of such Company Options is exercised, a
written representation that the shares of Common Stock to be acquired
upon such exercise are to be acquired for investment and not for
resale or with a view to distribution thereof and/or that Eligible
Executive or such other person will comply with such restrictions as
may be necessary to satisfy the requirements of the federal or state
securities law. Delivery of the representation required by this
section shall be a condition precedent to the right of the Eligible
Executive or such other person to purchase any shares of Common Stock
under this Agreement.
3. Eligible Executive Bound by Plan and Legended Stock Certificates.
The Eligible Executive hereby acknowledges receipt of a copy of the Plan and the
Stockholders' Agreement and agrees to be bound by all the terms and provisions
thereof, including the terms and provisions adopted after the ratification of
these Company Options but prior to the complete exercise thereof. In addition,
the Eligible Executive acknowledges that any shares of Common Stock issued in
connection with the exercise of a Company Option ratified herein shall be marked
with a restrictive legend which references the conditions and limitations
imposed on such shares of Common Stock by this Agreement.
4. Notices. Any notice hereunder to the Company shall be addressed to
it at its office, 0000 X Xxxxx, X.X., Xxxxxxxxxx X.X. 00000, Attention: General
Counsel, any notice hereunder to the Eligible Executive shall be addressed to
her at ____________________, any notice hereunder to Liberty shall be addressed
to it at 0000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention:
President, and any notice hereunder to Xxxxxxx shall be addressed to him at his
office, 0000 X Xxxxx, X.X., Xxxxxxxxxx, X.X. 00000, subject to the right of any
such person or entity to designate at any time hereafter in writing some other
address.
5. Counterparts. The Agreement has been executed in two counterparts
each of which shall constitute one and the same instrument.
6. Headings. Any headings preceding the text of the sections of this
Agreement are inserted for convenience of reference only, and shall neither
constitute a part of this Agreement nor affect its meaning, construction or
effect.
7. Interpretations. Any dispute or disagreement which may arise under
or as a result of or pursuant to this Agreement shall be determined by the
Committee in its sole discretion, and any interpretation by the Committee of the
terms of this Agreement shall be final, binding and conclusive. All rights under
this Agreement shall be governed and construed in accordance with the laws of
the state of Delaware.
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IN WITNESS WHEREOF, BET Holdings II, Inc. has caused this Agreement to
be executed by an appropriate officer and the Eligible Executive has executed
this Agreement, both as of the day and year first above written.
BET HOLDINGS II, INC.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Title: Senior Vice President and
Chief Administrative Officer
/s/ Xxxxx X. Xxx
------------------------------------
Eligible Executive
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SCHEDULE I -- NOTATIONS AS TO PARTIAL EXERCISE
----------------------------------------------
Balance of Shares
-----------------
Number of
Date of Purchased Incentive Non-Qualified Authorized Notation
Exercise Shares Stock Option Option Total Signature Date
-------- ------ ------------ ------ ----- --------- ----
Exhibit B
---------
BET HOLDINGS II, INC.
0000 X Xxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention:
------------------------
Notice of Exercise of Stock Option
and Record of Stock Transfer
I hereby exercise the identified portion of the Option ratified by BET
Holdings II, Inc. (the "Company") in a Restated Stock Option Agreement dated
July 30, 1998, subject to all the terms and provisions thereof and of the BET
Holdings II, Inc. 1998 Executive Stock Option Plan referred to therein, and
notify you of my desire to purchase _____ shares of Common Stock of the Company
("Common Stock") which were offered to me pursuant to said Restated Stock Option
Agreement, as follows:
Number of Option Price Incentive Stock Option
Shares Per Share or Nonqualified
[Enclosed is my [certified] check in the sum of _____ in full payment for such
shares.] [Enclosed are certificates of Common Stock having a fair market value,
as determined by the Compensation Committee of the Board of Directors of BET
Holdings II, Inc., equal to the purchase price of such shares.]
I hereby represent that the _____ shares of Common Stock to be
delivered to me pursuant to the above-mentioned exercise of the Restated Stock
Option on __________ are being acquired by me as an investment and not with a
view to, or for sale in connection with, the distribution of any thereof and
that such shares shall bear an appropriate legend reflecting the conditions and
limitations set forth in the Restated Stock Option Agreement. I further
understand that such
shares shall be subject to a Voting Trust Agreement and I agree to execute such
documents as may be necessary to effectuate such result.
DATED: , 19 .
----------------------- -----
--------------------------
Employee's Signature
Receipt is hereby acknowledged of the delivery to me by BET Holdings
II, Inc. on __________ of stock certificates for __________ shares of Common
Stock of BET Holdings II, Inc. purchased by me pursuant to the terms and
conditions of the BET Holdings II, Inc. 1998 Executive Stock Option Plan
referred to above (the "Plan"), which shares were transferred to me on the
Company's stock record books on __________. [I hereby direct that such stock
certificates be reissued in the name of Xxxxxx X. Xxxxxxx, as Voting Trustee of
the Voting Trust established in accordance with the Plan in accordance with the
terms of my Restated Stock Option Agreement.]
--------------------------
Employee
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