Exhibit 99.24
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OPTION AGREEMENT
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OPTION AGREEMENT, dated as of March 14, 1997, amended January 14, 1998
between, The Texas Individualized Television Network, Inc., a Delaware
corporation (the "Corporation") and Xxxxx Xxxxx (the "Holder").
WHEREAS, the Corporation desires to grant to the Holder, the right and
option to purchase shares (the "Option Shares") of Class B Common Stock, $.01
par value per share (the "Class B Stock"), of the Corporation, on the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the receipt of $1.00 and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereby agree as follows:
SECTION 1. Option to Purchase Common Stock.
a. The Corporation hereby grants to the Holder an option (the "Option")
to purchase from the Corporation 250,000 Option Shares, at a purchase price of
$1.50 per Option Share (the "Option Price"). The Holder's right and option to
purchase the Option Shares shall vest, subject to subsection 1(d) and Section 6,
as follows: (i) 85,000 Option Shares vest July 1, 1997, (ii) 55,000 Option
Shares vest on January 1, 1998, (iii) 55,000 Option Shares vest July 1, 1998;
(iv) 55,000 Option Shares vest January 1, 1999 (each an "Installment") at the
Option Price, so long as the Holder is employed by the Corporation. Said right
shall be cumulative. With respect to each Installment, the "Option Period" shall
commence on the date said Installment vests and terminate on March 14, 2007.
b. Except as limited by Section 5,an Installment may be exercised, in
whole or part, by the Holder by delivery to the Corporation, at any time during
the Option Period, of a written notice (the "Option Notice"),which Option Notice
shall state the Holder's intention to exercise the Option, the date on which the
Holder proposes to purchase the Option Shares (the "Closing Date") and the
number of Option Shares to be purchased on the Closing Date, which Closing Date
shall be no later than 30 days nor earlier than 10 days following the date of
the Option Notice. Upon receipt by the Corporation of an Option Notice from the
Holder, the Holder shall be obligated to purchase that number of Option Shares
to be purchased on the Closing Date set forth in the Option Notice.
c. The purchase and sale of Option Shares acquired pursuant to the
terms of this Option Agreement shall be made on the Closing Date at the offices
of the Corporation. Delivery of the stock certificate or other instrument
registered in the name of the Holder, evidencing the Option Shares being
purchased on the Closing Date, shall be made by the Corporation to
the Holder on the Closing Date against the delivery to the Corporation of a
certified or bank check in the full amount of the aggregate purchase price
therefor.
d. After January 1, 1999, the Option may be exchanged, in whole or in
part, for an equal number of ACTV, Inc. options at an option price of $1.50 per
share over the same Option Period.
e. Should ACTV, Inc. ("ACTV") undergo a Change in Control, as defined
below, or should another corporation which can exercise control over the
Corporation sell or attempt to sell all or substantially all of the assets of
said Corporation, or should more than 50% of its voting power be acquired by a
party which is not affiliated with or controlled by ACTV, then all of the
Holder's rights to exercise the Option for all the Option Shares shall be
accelerated so that the Installments to purchase all Option Shares shall be
fully vested at the time of said event and the exercisable price shall reduce to
$.10 per share. A Change in Control shall be the occurrence of any one of the
following events:
(i) A person (other than a person who is an officer or a Director
of ACTV on the effective date hereof), including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, becomes, or obtains the right
to become, the beneficial owner of ACTV's securities having 30% or more of the
combined voting power of then outstanding securities of ACTV that may be cast
for the election of directors of ACTV;
(ii) At any time, a majority of the Board-nominated slate of
candidates for the Board of ACTV is not elected;
(iii) ACTV consummates a merger in which it is not the surviving
entity;
(iv) Substantially all ACTV's assets are sold; or
(v) ACTV's stockholders approve the dissolution or liquidation of
ACTV.
SECTION 2. Representations and Warranties of The Holder. The Holder hereby
represents and warrants to the Corporation that in the event the Holder acquires
any Option Shares, such Option Shares will be acquired for his own account, for
investment and not with a view to the distribution thereof. The Holder
understands the Option Shares will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), and that they must be held indefinitely
unless a subsequent disposition thereof is registered under the Securities Act
or the transaction is exempt from registration. The certificate or certificates
representing any Option Shares shall bear the following restrictive legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933; OR (ii)
TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR SIMILAR RULE UNDER THE
SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAN AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT IS AVAILABLE. IN ADDITION, THIS CERTIFICATE OF STOCK AND
SHARES REPRESENTED HEREBY AND HELD SUBJECT TO THE TERMS AND CONDITIONS
CONTAINED IN AN AGREEMENT BY AND AMONG THE SHAREHOLDERS OF THE CORPORATION
AND THE CORPORATION DATED AS OF MARCH 6, 1997, AND ALL AMENDMENTS THERETO,
AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TERMS AND
PROVISIONS THEREOF. A COPY OF SUCH AGREEMENT WILL BE FURNISHED BY THE
CORPORATION UPON REQUEST."
SECTION 3. Reorganization; Mergers; Sales; Etc. If, at any time during the
Option Period, there shall be any capital reorganization, reclassification of
the Common Stock (the term "Common Stock" shall mean the Company's Class A
Common Stock and/or the Class B Stock) (other than a change in par value or from
par value to no par value or from no par value to par value or as a result of a
stock dividend or subdivision, split-up or combination of shares), the
consolidation or merger of the Corporation with or into another corporation or
of the sale of all or substantially all the properties and assets of the
Corporation as an entirety to any other corporation or person, the unexercised
and fully vested portion of this Option shall, after such reorganization,
reclassification, consolidation, merger or sale, be exercisable for the kind and
number of shares of stock or other securities or property of the Corporation or
of the corporation resulting from such consolidation or surviving such merger or
to which such properties and assets shall have been sold to which the Holder
would have been entitled if the Holder had held shares of Class B Stock issuable
upon the exercise hereof immediately prior to such reorganization,
reclassification, consolidation, merger or sale. The provisions of this Section
3 shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers and sales.
SECTION 4. Adjustment of Option Shares and Option Price.
a. The number of Option Shares subject to this Option during the Option
Period shall be cumulative as to all prior dates of calculation and shall be
adjusted for any stock dividend, subdivision, split-up or combination of Common
Stock.
b. The Option Price shall be subject to adjustment from time to time as
follows:
If, at any time during the Option Period, the number of shares of Common
Stock outstanding is altered by a stock dividend payable in shares of Common
Stock or by a subdivision or split-up or combination of shares of Common Stock,
then, immediately following the record date fixed for the determination of
holders of shares of Common Stock, entitled to receive such subdivision or
split-up or combination, the Option Price shall be appropriately increased or
decreased and the number of shares of Common Stock issuable upon the exercise
hereof shall be increased or decreased, pursuant to the formula set forth in
Section 4.c.
c. Upon each adjustment of the Option Price pursuant to the provisions
of this Section 4, the number of shares of Common Stock issuable upon the
exercise hereof shall be adjusted to the nearest full share of Common Stock by
multiplying a number equal to the Option Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Option Price.
d. Should additional shares of Class A Common Stock, $.01 par value,
over and above the 4,000,000 shares presently authorized, be issued after the
effective date of this Option Agreement, then the number of shares issuable upon
exercise of this Option shall be increased by the same percentage that the total
number of issued Class A Common Stock has been increased.
e. The Corporation will use its best efforts to amend its certificate
of incorporation to authorize additional Class B Stock should the number of
shares of Class B Stock issuable upon exercise of the Option be increased in
accordance with the terms of this agreement.
SECTION 5. Termination of the Options.
a. Termination of Options in General. Subject to subsection 5(b), the
Option granted hereby shall terminate and the Option shall no longer be
exercisable after March 14, 2007.
b. Option Rights Upon Death, Disability, Resignation. If a Holder dies
or becomes disabled while employed by the Corporation, ACTV, Inc. or any
affiliate or subsidiary of ACTV, Inc. (collectively, the "ACTV Group"), or
resigns from employment with the ACTV Group prior to his complete exercise of
the Option, the Holder (or his heirs) may exercise his Option at any time during
the option period, to the extent that the Holder was entitled to exercise the
Option at the date such event, and the Class B Stock underlying the Option shall
convert into Class A Stock on the second anniversary of the occurrence of such
death, disability or resignation.
SECTION 6. Termination of Employment. In the event that a Holder is
terminated from employment with the ACTV Group for any reason during the Option
Period then (i) all Options granted to the Holder hereunder shall become vested
and immediately exercisable at an exercise price of $.10 per share adjusted for
any stock splits and capital reorganizations having a similar effect, subsequent
to the effective date hereof, (ii) all Options may be exercised at any time
during the Option Period and (iii) anything herein to the contrary
notwithstanding, the Shares underlying the Options, whether exercised prior or
subsequent to the termination shall not convert to Class A stock except as set
forth in the applicable Shareholder Agreement.
SECTION 7. Transfer of Option; Successors And Assigns. This Agreement
(including the Option) and all rights hereunder shall not be transferable at any
time without the prior written consent of the Corporation. This Agreement and
all the rights hereunder shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, approved assigns and approved
transferees.
SECTION 8. Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Corporation:
The Texas Individualized Television Network, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxx
If to the Holder, to:
Xxxxx Xxxxx
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. If mailed as
aforesaid, any such communication shall be deemed to have given on the third
business day following the day on which the piece of mail containing such
communication is posted.
SECTION 9. Governing Law. This Agreement shall be governed by, and construed
in accordance with the laws of the State of Delaware.
SECTION 10. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the transactions contemplated herein
and supersedes all previously written or oral negotiations, commitments,
representations and agreement, including the original March 14, 1997 option
agreement.
SECTION 11. Amendments and Modifications. This Agreement, or any provision
hereof, may not be amended, changed or modified without the prior written
consent of each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Option Agreement to
be executed and delivered as of the date first above written.
THE TEXAS INDIVIDUALIZED
TELEVISION NETWORK, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx
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AGREED TO AND ACCEPTED BY
HOLDER:
/s/ Xxxxx Xxxxx
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Signature
Xxxxx Xxxxx
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