POINT.360.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), is made
as of the 26th day of September, 2001 by and between Point.360, a California
corporation (the "Company"), and Xxxx X. Bagerdjian ("Optionee").
R E C I T A L
Pursuant to the 2000 Nonqualified Stock Option Plan (the "Plan") of the
Company, the Board of Directors of the Company or a committee to which
administration of the Plan is delegated by the Board of Directors (in either
case, the "Administrator") has authorized the granting to Optionee as Chairman
of the Board of the Company of a non-qualified stock option to purchase the
number of shares of common stock of the Company specified in Paragraph 1 hereof,
at the price specified therein, such option to be for the term and upon the
terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and of the
undertakings of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the
Administrator, the Company hereby grants to Optionee the option ("Option") to
purchase, upon and subject to the terms and conditions of the Plan, 55,000
shares of Common Stock of the Company ("Shares") at the price of $1.50 per
share.
2. TERM. Notwithstanding Optionee's earlier resignation as a director
of the Company, and notwithstanding Section 6.2.2 of the Plan, this Option shall
expire on the day before the fifth anniversary of the date of grant of the
Option (the "Expiration Date"). The term "Affiliate" as used herein shall have
the meaning as set forth in the Plan.
3. SHARES SUBJECT TO EXERCISE. This Option shall be exercisable on the
earlier of (i) one-twelfth at the end of each of the first twelve months of the
Term commencing on September 30, 2001, provided that the termination of
Optionee's position as Chairman of the Board of the Company has not become
effective on or before such monthly vesting date; or (ii) the date on which the
closing price of the Company's common stock is $5.00 or above for ten
consecutive days.
Once exercisable, the Option shall thereafter remain exercisable as to
such Shares for the term specified in Paragraph 2 hereof.
4. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company at its principal executive office stating the
number of shares with respect to which the Option is being exercised together
with:
(A) a check or money order made payable to the Company in the amount of
the exercise price and any required withholding tax, if any; or
(B) if expressly authorized in writing by the Administrator, in its
sole discretion, at the time of the Option exercise, the tender to the
Company of shares of the Company's Common Stock owned by Optionee having a
fair market value not less than the exercise price, plus the amount of any
applicable federal, state and local withholding taxes; or
(C) if expressly authorized in writing by the Administrator, in its
sole discretion, at the time of the Option exercise, the Optionee's full
recourse promissory note in a form approved by the Company; or
(D) if any other method such as cashless exercise is expressly
authorized in writing by the Administrator, in its sole discretion, at the
time of the Option exercise, the tender of such consideration having a fair
market value not less than the exercise price, plus the amount of any
applicable federal, state and local withholding taxes.
Only whole shares may be purchased.
The provisions of Section 9.2 of the Plan shall not be applicable to
the exercise of the Option.
5. LEGEND. All Shares received due to the exercise of an option granted
under this plan shall bear a legend stating the restrictions, if any, on
transfer provided for in any provision of this Agreement.
6. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require Optionee to pay over to the Company all applicable federal,
state and local taxes which the Company is required to withhold with respect to
the exercise of this Option. At the discretion of the Administrator and upon the
request of Optionee, the minimum statutory withholding tax requirements may be
satisfied by the withholding of Shares of Common Stock of the Company otherwise
issuable to Optionee upon the exercise of this Option.
7. TAX GROSS UP. If, as a result of this Option (including the exercise
of this Option), the excise tax imposed by Section 4999 of the Internal Revenue
Code is applicable to Optionee, the Company shall pay Optionee such amount as
shall result in having Optionee receive and retain, after the excise tax and all
taxes (including federal, state and local) on the gross up payments, determined
by applying the highest marginal rates, the amount that Optionee would have
received and retained had the excise tax not applied.
8. NON-TRANSFERABILITY. Except with the express written approval of the
Administrator, this Option may not be assigned or transferred except by will or
by the laws of descent and distribution, and may be exercised only by Optionee
during the Optionee's lifetime and after the Optionee's death, by the Optionee's
personal representative or by the person entitled thereto under the Optionee's
will or the laws of intestate succession.
9. OPTIONEE NOT A STOCKHOLDER. Optionee shall have no rights as a
stockholder with respect to the Common Stock of the Company covered by this
Option until the date of issuance of a stock certificate or stock certificates
to the Optionee upon exercise of this Option. No adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificate or certificates are issued.
10. [Intentionally Omitted.]
11. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 6.1.1 and
6.1.10 of the Plan.
12. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that
upon the Optionee's exercise of this Option, in whole or in part, unless there
is in effect at that time under the Securities Act of 1933 a registration
statement relating to the Shares issued to the Optionee, the Optionee will
acquire the Shares issuable upon exercise of this Option for the purpose of
investment and not with a view to their resale or further distribution, and that
upon such exercise thereof the Optionee will furnish to the Company a written
statement to such effect, satisfactory to the Company in form and substance.
Optionee agrees that any certificates issued upon exercise of this Option may
bear a legend indicating that their transferability is restricted in accordance
with applicable state and federal securities law. Any person or persons entitled
to exercise this Option under the provisions of this Agreement, upon each
exercise of this Option under circumstances in which Optionee would be required
to furnish such a written statement, will also furnish to the Company a written
statement to the same effect, satisfactory to the Company in form and substance.
13. PLAN GOVERNS. This Agreement and the Option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan, as it may be construed
by the Administrator. Optionee hereby acknowledges receipt of a copy of the
Plan.
14. NOTICES. All notices to the Company shall be addressed to the
Corporate Secretary at the principal executive office of the Company at 0000
Xxxxxxxxx Xxxx., Xxxxx 000, X.X. Xxx 0000, Xxxxxxxxx, XX 00000, and all notices
to Optionee shall be addressed to Optionee at the address of Optionee on file
with the Company, or to such other address as either may designate to the other
in writing. A notice shall be deemed to be duly given if and when enclosed in a
properly addressed sealed envelope deposited, postage prepaid, with the United
States Postal Service. In lieu of giving notice by mail as aforesaid, written
notices under this Agreement may be given by personal delivery to Optionee or to
the Corporate Secretary (as the case may be).
15. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange, or other form of transfer) of any
Shares acquired by exercise of this Option, the Optionee shall first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the reasonable
judgment of the Company, must be satisfied prior to such disposition.
16. CORPORATE TRANSACTIONS. Notwithstanding any other provision of this
Agreement or the Plan, in the event of a Corporate Transaction (as defined
below), the Administrator shall notify Optionee as soon as practicable prior
thereto, and the Option shall become immediately exercisable to the full extent
theretofore not exercisable. A "Corporate Transaction" means a change in control
of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended ("Exchange Act"); provided that, without limitation, such a
change in control shall be deemed to have occurred if (i) a tender offer shall
be made and consummated for the ownership of 35% or more of the outstanding
voting securities of the Company, (ii) the Company shall be merged or
consolidated with another corporation and as result of such merger or
consolidation less than 65% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the aggregate by the former
shareholders of the Company, other than affiliates (within the meaning of the
Exchange Act) of any party to such merger or consolidation, as the same shall
have existed immediately prior to such merger or consolidation, (iii) the
Company shall sell, lease, exchange or transfer substantially all of its assets
to another corporation, entity or person which is not wholly-owned subsidiary,
(iv) a person (other than Optionee), as defined in Sections 13(d) and 14(d) (as
in effect on the date hereof) of the Exchange Act, shall acquire 35% or more of
the outstanding voting securities of the Company (whether directly, indirectly,
beneficially or of record, in a single transaction or a series of related
transactions by one person or more than one person acting in concert), or (v)
the shareholders of the Company approve a plan or proposal for the liquidation
or dissolution of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
POINT.360
By:
/s/ Xxxx X. Steel
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Xxxx X. Steel
Its:
Executive Vice President
OPTIONEE:
/s/ Xxxx X. Bagerdjian
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Xxxx X. Bagerdjian
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Social Security Number
