EXHIBIT 10.14
K-TEL INTERNATIONAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO 1997 STOCK OPTION PLAN
No. of shares subject to Option: __________
OPTION AGREEMENT dated as of ____________, 2000, by and between K-tel
International, Inc., a Minnesota corporation (the "Company"), and ____________
("Optionee"). Unless otherwise defined herein, certain capitalized terms shall
have the meaning set forth in the Company's 1997 Stock Option Plan, as amended
(the "Plan").
W I T N E S S E T H :
1. NATURE OF THE OPTION. This Option is not intended to qualify as an
Incentive Stock Option within the meaning of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Internal Revenue Code of 1986, as amended.
2. GRANT OF OPTION. Pursuant to the provisions of the Plan, the Company
grants to the Optionee on ____________, 2000, subject to the terms and
conditions of the Plan and to the terms and conditions herein set forth, the
right and option to purchase from the Company all or a part of an aggregate of
_________ shares of Common Stock (the "Shares") at the purchase price of $______
per share, such option to be exercised as hereinafter provided.
3. TERMS AND CONDITIONS. It is understood and agreed that the option
evidenced hereby is subject to the following terms and conditions:
(a) EXPIRATION DATE. The option shall expire ten years after the date
of grant specified in Section 2.
(b) EXERCISE OF OPTION. Subject to the Plan and the other terms of this
Agreement regarding the exercisability of this Option, this Option shall be
exercisable be exercisable cumulatively, to the extent of _________ shares on or
after ____________, 2001, _________ shares subject to this Option on or after
____________, 2002, and _________ shares subject to this Option on or after
____________, 2003.
Any exercise shall be accompanied by a written notice to the Company
specifying the number of shares of Stock as to which the Option is being
exercised. Notation of any partial exercise shall be made by the Company on
Schedule I hereto.
(c) PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of any
exercise, the purchase price of the Shares as to which this Option is exercised
shall be paid in cash to the Company, unless,
in accordance with the provisions of Section 5.2 (b) of the Plan, the Committee
shall permit payment of the purchase price in another manner set forth in the
Plan.
(d) NONTRANSFERABILITY. This option shall not be transferable other
than by will or by the laws of descent and distribution. During the lifetime of
the Optionee, this Option shall be exercisable only by the Optionee or by the
Optionee's guardian or legal representative. No transfer of this Option by the
Optionee by will or by the laws of descent and distribution shall be effective
to bind the Company unless the Company shall have been furnished with written
notice thereof and a copy of the will and/or such other evidence as the
Committee may determine necessary to establish the validity of the transfer.
(e) NO RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder of the Company with respect to any shares of Stock subject to this
Option prior to the date of issuance to the Optionee of a certificate for such
shares.
(f) COMPLIANCE WITH LAW AND REGULATIONS. This Option and the obligation
of the Company to sell and deliver shares hereunder shall be subject to all
applicable laws, rules and regulations and to such approvals by any government
or regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Stock prior to (i) the listing
of such shares on any stock exchange on which the Stock may then be listed, and
(ii) the completion of any registration or qualification of such shares under
any federal or state law, or any rule or regulation of any government body which
the Company shall, in its sole discretion, determine to be necessary or
advisable. Moreover, this Option may not be exercised if its exercise or the
receipt of shares of Stock pursuant thereto would be contrary to applicable law.
4. ADJUSTMENTS. In the event of any change whether through
recapitalization, merger, consolidation, stock dividend, split-up, or change in
the amount of the Company's capital stock after the date hereof, this Option, to
the extent it has not been exercised, shall entitle the Optionee to such number
and kind of securities as the Optionee would have been entitled to had the
Optionee actually owned the stock subject to this Option at the time of the
occurrence of such change. If any other event shall occur, prior to the exercise
of this Option, which shall increase or decrease the amount of capital stock
outstanding and which the Committee, in its sole discretion, shall determine
equitably requires an adjustment in the number of shares which the Optionee may
acquire, such adjustment as the Committee shall determine may be made, and when
so made shall be effective and binding for all purposes of this Option.
5. INVESTMENT REPRESENTATION. The Committee may require the Optionee to
furnish to the Company, prior to the issuance of any shares upon the exercise of
all or any part of this Option, an agreement (in such form as such the Committee
may specify) in which the Optionee represents that the shares acquired by the
Optionee upon exercise are being acquired for investment and not with a view to
the sale or distribution thereof.
6. OPTIONEE BOUND BY PLAN. The Optionee hereby acknowledges receipt of
a copy of the Plan and agrees to be bound by all the terms and provisions
thereof. In the event of any question or inconsistency between this Agreement
and the Plan, the terms and conditions of the Plan shall govern.
2
7. NOTICES. Any notice hereunder to the Company shall be addressed to
it at its principal executive offices, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; and any notice hereunder to the
Optionee shall be addressed to the Optionee at the address set forth below;
subject to the right of either party to designate at any time hereunder in
writing some other address.
8. COUNTERPARTS. This Agreement may be executed in two counterparts
each of which shall constitute one and the same instrument.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, K-tel International, Inc. has caused this Agreement
to be executed by its President and the Optionee has executed this Agreement,
both as of the day and year first above written.
K-TEL INTERNATIONAL, INC.
By:
-------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Chief Executive Officer
--------------------------------
Optionee (signature)
Name and address of Optionee (type or print):
--------------------------------
--------------------------------
--------------------------------
3
EXHIBIT A
OPTION AND VESTING DATA
Name of Optionee: ___________________
Number of Shares Subject to Option: __________
Date of Grant: _______________, 2000
OPTION VESTING SCHEDULE
NO. OF SHARES
DATE EXERCISABLE
_______________, 2001 _________
_______________, 2002 _________
_______________, 2003 _________
The above vesting schedule assumes a ongoing relationship with the
Company. Your rights to exercise the unvested portion of this Option will cease
upon termination of relationship with the Company. Reference is made to the Plan
and to relevant sections of the Agreement between you and the Company for your
rights to exercise the vested portion of this Option in the event of termination
of your relationship with the Company during lifetime or upon death. The above
vesting schedule is in all respects subject to the terms of those documents.
A-1
SCHEDULE I - NOTATIONS AS TO PARTIAL EXERCISE
Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
I-1