Exhibit 10.19
STOCK OPTION AGREEMENT dated as of August 28, 1995 between VideoLan
Technologies, Inc., a Delaware corporation with its principal office at
00000 Xxxx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000
(hereinafter called the "Corporation"), and Xxxx X. Xxxxxxxx
(hereinafter called the "Optionee").
The Optionee is a director of the Corporation and it is recognized
that the best interests of the Corporation would be served if the Optionee is
given the right to acquire a proprietary interest in the Corporation.
Therefore, the Corporation and the Optionee mutually agree as follows:
1. Stock Option. The Corporation hereby grants to the Optionee
an option (the "Option") to purchase up to 10,000 shares (the "Shares")
of the Common Stock, par value $.01 per share, of the Corporation
("Common Stock") at an exercise price of $4.00 per share (the "Exercise
Price Per Share"). The Option shall become exercisable as provided in
Section 3 hereof and may be exercised in whole or in part until
terminated in accordance with Section 4 hereof. The Option has been
issued pursuant to, and is subject to the terms and provisions of, the
1995 Stock Option Plan of VideoLan Technologies, Inc., as the same may
be amended from time to time (the "Plan"). The Options granted
hereunder are deemed to be nonqualified stock options under the Plan.
2. Exercise Dates. Subject to Section 4 hereof, the Option
hereunder shall become exercisable with respect to all 10,000 Shares on
or after August 28, 1995.
3. Manner of Exercise of the Option. The Option may be exercised by the
Optionee by giving written notice to the Corporation in the form of Exhibit A
attached hereto (an "Exercise Notice") specifying the number of Shares
with respect to which the Option is being exercised. Upon any exercise
of the Option, the number of Shares with respect to which the Option may
thereafter be exercised by the Optionee shall no longer include the
number of Shares with respect to which the Option has been exercised.
On the tenth business day following receipt of an Exercise Notice
by the Corporation, or at any other time mutually agreed upon by the
Corporation and the Optionee, a closing shall be held (the "Closing").
At the Closing:
(a) the Optionee shall pay to the Corporation, by certified or
cashier's check, the aggregate Exercise Price per Share for the Shares; and
(b) the Corporation shall deliver to the Optionee a stock
certificate representing the Shares.
Prior to the Closing, the Corporation shall inform the Optionee of
the amount of any federal, state and local income and taxes which it
determines it is required to withhold from the Optionee by reason of
such exercise of the Option, and the Optionee, as a condition to the
2
Closing, shall make provision satisfactory to the Corporation for the
payment of such taxes to the Corporation.
4. Termination, Cancellation, Modification and Adjustment of Option.
(a) Termination. The Option and all rights of the Optionee hereunder,
to the extent not previously exercised, shall terminate on the earliest of the
following dates:
(i) August 27, 2005;
(ii) The date of termination of the Optionee's directorship for any
reason whatsoever other than death; provided, however, that any
options which were immediately exercisable by the Optionee hereunder
at the date of such termination of Optionee's directorship may be
exercised by the Optionee during the period ending five (5) years
after the date of such termination, but in no event after the date
set forth in Section 4(a)(i) hereof;
(iii) The date of termination of the Optionee's directorship by
reason of his death, provided, however, that the Options, if any,
which were immediately exercisable by the Optionee at the date of his
death may be exercised by the Optionee's legal representatives during
the period ending three (3) years after the date of the Optionee's
death, but in no event after the date set forth in Section 4(a)(i)
hereof; or
3
(iv) Thirty days following the date on which the Optionee receives
a Cancellation Notice from the Corporation as provided in Section 4(b)
hereof.
(b) Cancellation of Option. Notwithstanding the foregoing provisions
of this Section, the Corporation shall have the right to terminate the
right of the Optionee to exercise the Option, effective thirty (30) days
after receipt by the Optionee of a written notice from the Corporation
informing the Optionee that this Option is to be cancelled (the
"Cancellation Notice"). The Corporation may issue a Cancellation Notice
only in connection with (i) the sale of substantially all of the
Corporation's assets, or (ii) a merger, consolidation or other corporate
transaction in which the Corporation would not be the surviving entity.
Following receipt of a Cancellation Notice and during the period prior
to the effective date of the termination, the Optionee shall have the
right to exercise the Option (to the extent not previously exercised)
with respect to all Shares covered hereby (even if under Section 2 the
Option would not otherwise have become exercisable with respect to all
Shares at that time).
(c) Modification of Agreement. The Optionee hereby consents to
any amendment of the Plan and of this Agreement which the Board of
Directors in its sole discretion and upon advice of legal counsel, may
deem necessary or advisable to enable the exercise of the Option to
comply with any applicable rules and
4
regulations of the Securities and Exchange Commission, including,
without intending any limitation, any amendment which would exempt such
exercise from the operation of Section 16 of the Securities Exchange Act
of 1934. Except as otherwise provided herein, this agreement may not be
amended or modified except pursuant to an agreement in writing signed by
Corporation and the Optionee.
(d) Adjustment of Option. In the event that prior to the exercise in
full of the Option, the Corporation shall have effected one or more
stock dividends, stock splits, reorganizations, recapitalizations,
combinations of shares, mergers, consolidations, or other changes in the
corporate structure or stock of the Corporation, the Board of Directors
shall equitably adjust the number, kind and Exercise Price per Share of
the Shares remaining subject to the Option in accordance with the Plan.
(e) Sales of Shares Acquired Upon Exercise of the Option. Shares of
Common Stock acquired upon exercise of the Option, cannot be sold unless they
are registered pursuant to a registration statement filed with the
Securities and Exchange Commission or if an exemption from registration
is available.
5. No Rights in Shares. The Optionee shall not have any of
the rights and privileges of a stockholder of the Corporation in respect
of any Shares covered by the Option until the Optionee shall have become
the holder of record of any such Shares.
5
6. Nontransferability. The Option shall not be transferable by
the Optionee, except by will or the laws of descent and distribution,
and is exercisable during the Optionee's lifetime only by him, except
as set forth in Section 4 hereof. Any sale, donation, pledge,
hypothecation, assignment or other transfer contrary to the provisions
of this Agreement is null and void.
7. Effect upon Service as a Director. Nothing contained in this
Agreement or in the Plan shall confer upon the Optionee any right with
respect to Optionee continuing to serve as a director of the
Corporation.
8. Determination. Each determination, interpretation or other
action made or taken pursuant to the provisions of this Agreement by the
Board of Directors shall be final and conclusive for all purposes and
shall be binding upon all persons, including, without limitation, the
Corporation and the Optionee, and their respective successors and
assigns.
9. Reference to the Plan. The Option has been granted pursuant to and
subject to the provisions of the Plan, which is hereby incorporated
herein by reference. Anything herein to the contrary notwithstanding,
each and every provision of this Agreement shall be subject to the terms
and conditions of the Plan.
10. Governing Law. This Agreement and all determinations made and
actions taken pursuant hereto shall be governed by the internal laws of
the State of Delaware and construed in
6
accordance therewith, without giving effect to the principles of
conflict of laws thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the date and
year first above written.
VIDEOLAN TECHNOLOGIES, INC.
By:_/s/_Steve Rothenberg_______
Title: Chief Financial Officer
/s/_John_R._Glankler_________
Xxxx X. Xxxxxxxx, Optionee
7
EXHIBIT A
EXERCISE NOTICE
______________, _____
VideoLan Technologies, Inc.
00000 Xxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Reference is made to that certain Stock Option Agreement dated as
of August 28, 1995 between the undersigned and VideoLan Technologies,
Inc. (the "Corporation") , pursuant to which the undersigned was granted
an option (the "Option") to purchase shares of the Common Stock (the
"Shares") of the Corporation (the "Option Agreement"). The undersigned
hereby elects to exercise the Option to the extent of _____ Shares.
The undersigned hereby acknowledges that he has been informed by
the Corporation that the Shares to be acquired upon this exercise of the
Option have not been registered under the Securities Act of 1933, as
amended (the "Act"). In the event the Shares are not registered at the
time the Option is exercised, the Shares may have to be held
indefinitely unless they are subsequently registered under the Act or an
exemption from registration is available. The undersigned understands
that any sale of the any of such Shares made in reliance upon Rule 144,
promulgated by the Securities and Exchange Commission under the Act, can
be made only in limited amounts in accordance with the terms and
conditions of that Rule, and in the event that Rule 144 is not
applicable to any such sale,
public resale may require compliance with the registration provisions,
Regulation A, or some other disclosure provision or exemption under the
Act. In the event the Shares are not registered under the Act, the
undersigned agrees he will make no sale or other transfer of such Shares
unless the Corporation receives an opinion of its counsel to the effect
that registration thereof is a prerequisite to such sale or that an
exemption from such registration is available.
The undersigned agrees that if the Shares are not registered, the
certificates representing such Shares shall bear the following legend:
"THE SHARES MAY NOT BE SOLD OR TRANS-
FERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SHARES UNDER
THE SECURITIES ACT OF 1933 OR AN OPINION OF
COUNSEL TO THE CORPORATION THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT."
Very truly yours,
_____________________________________
Optionee
