EXHIBIT 10.28
THE 1995 STOCK OPTION PLAN OF
IMPRINT RECORDS, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement"), made as of
this 30th day of July, 1996, by and between IMPRINT RECORDS, INC. (formerly
known as Veritas Music Entertainment, Inc.) (the "Company"), a Tennessee
corporation with its principal executive office at Cummins Station, 000 00xx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, and XXXX XXXXXX, an
employee of the Company or one of its subsidiaries (a "Subsidiary"), residing at
0000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (the "Optionee"):
W I T N E S S E T H:
WHEREAS, the Optionee is an employee of the Company or a Subsidiary,
which Subsidiary is a "subsidiary corporation" of the Company, within the
meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, the Company has determined to grant stock options to attract
and retain the best available talent and to encourage the highest level of
performance, all in accordance with the 1995 Stock Option Plan of Imprint
Records, Inc. (the "Plan");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and other good and valuable consideration, the
parties hereto hereby agree as follows:
1. Subject to the terms and conditions of the Plan and this
Agreement, the Company hereby grants to the Optionee the right (the "Option") to
purchase all or any part of an aggregate of twenty-five thousand (25,000) shares
of common stock of the Company, no par value ("Common Stock").
2. This Option shall become exercisable (i) as to 33-1/3% of the
shares subject to the Option on July 29, 1997, (ii) as to an additional 33-1/3%
of the shares subject to the Option on July 29, 1998, and (iii) as to an
additional 33-1/3% of the shares subject to the Option on July 29, 1999. Any
unvested portion of this Option shall terminate at such time as the Optionee
ceases to be an officer or employee of the Company or any Subsidiary.
3. The price of each share purchased pursuant to this Option shall
be one dollar thirty-eight cents ($1.38).
4. (a) The Optionee may exercise the Option with respect to all or
any part of the shares then exercisable; provided, however, that no Option may
be exercised as to fewer than 100 shares unless it is then exercised as to all
of the shares then purchasable hereunder. The Optionee shall exercise the
Option by giving the Company written notice, in a form prescribed by the
Company. Such notice shall specify the number of shares of Common Stock to be
purchased and shall be accompanied by payment, in cash or certified check or by
official bank check, of an amount equal to the option price of such shares
multiplied by the number of shares as to which the Option is being exercised;
provided, however, that the purchase price may be paid, in whole or in part, (i)
by surrender or delivery to the Company of Common Stock having a fair market
value on the date of exercise equal to the portion of the purchase price being
so paid or (ii) by delivery to the Company of other property acceptable to the
committee established pursuant to the Plan to administer the Plan (the
"Committee") having a fair market value on the date of exercise equal to the
portion of the purchase price being so paid.
(b) The Committee may, but shall not be required to, cause the
Company to give or arrange for financing to enable the Optionee to exercise the
Option and/or pay taxes incurred in connection with such exercise, in accordance
with the terms of the Plan.
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(c) Subject to the prior approval of the Committee, the Optionee
may exercise the Option through a "cashless exercise" procedure involving a
broker or dealer selected or approved by the Committee, provided that the
Optionee has delivered an irrevocable notice of exercise (the "NOTICE") to the
broker or dealer and such broker or dealer agrees: (A) to exercise the Option
for the number of shares of Common Stock specified in the Notice and to sell
immediately such shares so acquired in the ordinary course of its business,
(B) to pay promptly to the Company the aggregate exercise price (plus the amount
necessary to satisfy any applicable tax liability) and (C) to pay to the
Optionee the balance of the proceeds of the sale of such shares over the amount
determined under clause (B) of this sentence, less applicable commissions and
fees.
5. As soon as practicable after receipt of the notice and payment
referred to in paragraph 4 above, the Company shall deliver to the Optionee a
certificate or certificates for such shares; provided, however, that the time of
such delivery may be postponed by the Company for such period of time as the
Company may require for compliance with any law, rule or regulation applicable
to the issuance or transfer of shares. If the Optionee fails for any reason to
accept delivery of all or any part of the number of shares specified in such
notice upon tender of delivery thereof, the Optionee's right to purchase such
undelivered shares may be terminated by the Company by notice to the Optionee
and refund to the Optionee of the Optionee's payment.
6. Prior to or concurrently with delivery by the Company to the
Optionee of a certificate(s) representing such shares, the Optionee shall upon
notification of the amount due, pay promptly, in cash, any amount necessary to
satisfy any applicable tax withholding requirement; provided, however, that the
Optionee shall be permitted to satisfy any tax withholding requirement in
connection with the exercise of the Option by directing the Company to withhold
from the number of shares of Common Stock to be delivered to the Optionee upon
exercise of the Option that number of shares which the Company determines to
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be sufficient to satisfy the tax withholding required in connection with such
exercise.
7. The Option and all rights of the Optionee to purchase shares of
Common Stock hereunder shall terminate on July 29, 2006 (the "Expiration Date");
provided, however, that except as provided in paragraph 8, the Option may not be
exercised unless the Optionee has remained an employee of the Company
continuously from the date hereof.
8. (a) In the event that the Optionee ceases to be an employee of
the Company other than by reason of death or permanent and total disability (as
defined in the Plan), the Option may be exercised (to the extent that the
Optionee is otherwise entitled to exercise such Option on or before the date of
termination of such employment or expiration of the employment term) at any time
within three months after such termination or expiration of the employment term,
but not later than the Expiration Date; provided, however, that if Optionee's
employment with the Company shall be terminated (as distinguished from
expiration of the employment term) either (A) by the Company (or the Subsidiary
employing the Optionee) for cause (as defined in the Plan) or (B) voluntarily by
the Optionee and without the consent of the Company (or the Subsidiary employing
the Optionee) (which consent shall be presumed in the case of retirement on or
after attainment of age 65), the Option shall, to the extent not theretofore
exercised, forthwith terminate.
(b) If the Optionee shall die or become permanently and totally
disabled (as defined in the Plan) while the Optionee is employed by the Company
or within three months after the termination or expiration of the employment
term of his or her employment (other than termination by the Company for cause
(as defined in the Plan) or voluntarily on the part of the Optionee and without
the consent of the Company), the Option may be exercised as set forth herein by
the guardian or legal representative of the Optionee, or by the Optionee (to the
extent that the Option is vested at the time of termination), at any time within
one year after the earlier of the death or
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commencement of permanent and total disability of the Optionee, but in all
events may not be exercised later than the Expiration Date.
9. Any notice to the Company provided for in the Option shall be
addressed to the Company in care of its Secretary, at the address set forth
above and any notice to the Optionee shall be addressed to the Optionee's
address now on file with the Company, or to such other address as either may
last have designated to the other by notice as provided herein. Any notice so
addressed shall be deemed to be given on the third business day after mailing,
by registered or certified mail, return receipt requested, at a post office or
branch office within the United States.
10. As used herein, employment with the Company shall include
employment with the Company and/or a Subsidiary. A leave of absence or an
interruption in service (including an interruption during military service)
authorized by the Company, or the Subsidiary employing the Optionee, as the case
may be, shall not be deemed an interruption of employment.
11. The number of shares of Common Stock subject to the Option and
the price per share thereof shall be subject to adjustment, as set forth in the
Plan. The Company shall not be required to adjust the number of shares of
Common Stock subject to the Option or the price per share thereof for any reason
not specifically enumerated in the Plan.
12. The Optionee shall have no rights as a stockholder with respect
to shares of Common Stock subject to the Option until payment for such shares
shall have been made in full and until the date of the issuance of stock
certificates for such shares.
13. Nothing herein contained shall restrict in any way such rights
that the Company or a Subsidiary may have to terminate the Optionee's employment
at any time, with or without cause.
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14. The Option has been granted pursuant to the Plan. This Agreement
is in all respects subject to the terms and conditions of said Plan.
15. The Option is not transferable, other than by will or the laws of
descent and distribution, and may be exercised, during the lifetime of the
Optionee only by the Optionee, or the Optionee's guardian or legal
representative. The term "Optionee" shall include any person having rights to
exercise the Option under the Plan.
16. It is intended that this Option shall constitute an incentive
stock option for purposes of Code Section 422 and shall be construed in a manner
consistent therewith.
17. The Optionee agrees to notify the Company upon the Optionee's
sale or other disposition of any shares issued to him upon exercise of the
Option before the expiration of two years after the Option was granted and one
year after the Option is exercised (a "Premature Disposition"), stating the date
and manner of such Premature Disposition. The Optionee agrees to pay the
Company, or that the Company shall be entitled to withhold from any amount due
the Optionee from the Company, amounts required by law to be withheld on account
of such Premature Disposition.
18. In the event that any question or controversy shall arise with
respect to the nature, scope or extent of any one or more rights conferred by
the Option, or any provision of this Agreement, the determination by the
Committee made in good faith and in accordance with applicable law of the rights
of the Optionee shall be conclusive, final and binding upon the Optionee and
upon any other person who shall assert any right pursuant to this Option.
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IN WITNESS WHEREOF, the Company and the Optionee have entered into
this Agreement as of the day and year first above written.
IMPRINT RECORDS, INC.
By: _________________________
Name:
Title:
_____________________________
Xxxx Xxxxxx, Optionee
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