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EXHIBIT 4(e)
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
DIRECTORS NONQUALIFIED STOCK OPTION GRANT
This Stock Option Grant (this "GRANT") is made and entered into as of
the date of grant set forth below (the "DATE OF GRANT") by and between On
Command Corporation, a Delaware corporation (the "COMPANY"), and the Optionee
named below ("OPTIONEE").
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Optionee:
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Optionee's Address:
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Total Shares Subject to Option: 4,000
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Exercise Price Per Share:
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Date of Grant:
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Expiration Date:
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1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(this "OPTION") to purchase up to the total number of shares of Common Stock of
the Company set forth above (collectively, the "SHARES") at the exercise price
per share set forth above (the "EXERCISE PRICE"), subject to all of the terms
and conditions of this Grant and the Company's 1997 Non-Employee Directors Stock
Option Plan (the "PLAN"). Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Plan.
2. EXERCISE AND VESTING OF OPTION. Subject to the terms and conditions
of the Plan and this Grant, this Option shall become exercisable as it vests.
Subject to the terms and conditions of the Plan and this Grant, this Option
shall vest as to twenty-five percent (25%) of the Shares on the first
anniversary of the Date of Grant, as to twenty-five percent (25%) of the Shares
on the second anniversary of the Date of Grant and as to fifty percent (50%) of
the Shares on the third anniversary of the Date of Grant so long as the Optionee
continuously remains a member of the Board of Directors (a "BOARD MEMBER") of
the Company.
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless
such exercise is in compliance with the Securities Act, and all applicable state
securities laws, as they are in effect on the date of exercise, and the
requirements of any stock exchange or national market system on which the
Company's Common Stock may be listed at the time of exercise. Optionee
understands that the Company is under no obligation to register, qualify or list
the Shares with the SEC, any state securities commission or any stock exchange
or national market system to effect such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section,
this Option shall terminate if Optionee ceases to be a Board
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Member of the Company. The date on which Optionee ceases to be a Board Member of
the Company shall be referred to as the "TERMINATION DATE." No portion of an
Option which is unexercisable at the Termination Date will thereafter become
exercisable.
4.1 Termination Generally. If Optionee ceases to be a Board
Member of the Company for any reason except death or permanent and total
disability, then this Option, to the extent (and only to the extent) that it
would have been exercisable by Optionee on the Termination Date, may be
exercised by Optionee within three (3) months after the Termination Date, or, if
the Optionee dies within such three-month period, may be exercised by the
Optionee's legal representative within twelve (12) months after the Optionee's
death but in no event later than the Expiration Date.
4.2 Death or Disability. If Optionee ceases to be a Board Member
of the Company because of the death of Optionee or the permanent and total
disability of Optionee within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended, then this Option, to the extent (and only to
the extent) that it would have been exercisable by Optionee on the Termination
Date, may be exercised by Optionee (or Optionee's legal representative) within
twelve (12) months after the Termination Date, but in no event later than the
Expiration Date.
4.3 Corporate Transaction. This Option shall terminate upon the
occurrence of a Corporate Transaction, as defined in the Plan; provided however
that any Option granted or deemed regranted within six months of such Corporate
Transaction shall remain exercisable until the expiration of six months and one
day from the later of the date such Option was granted or the date such Option
was deemed regranted.
5. MANNER OF EXERCISE.
5.1 Exercise Agreement. This Option shall be exercisable by
Optionee (or, in the case of exercise after Optionee's death or incapacity,
Optionee's executor, administrator, heir or legatee, as the case may be)
delivery to the Company of an executed written Directors Stock Option Exercise
Agreement in the form attached hereto as Exhibit A, or in such other form as may
be approved by the Board, which shall set forth Optionee's election to exercise
some or all of this Option, the number of shares being purchased, any
restrictions imposed on the Shares and such other representations and agreements
as may be required by the Company to comply with applicable securities laws. If
someone other than Optionee exercises the Option, then such person must submit
documentation reasonably acceptable to the Company that such person has the
right to exercise the Option.
5.2 Payment. Payment for the Shares purchased upon exercise of
this Option may be made (a) in cash or by check; (b) by surrender of shares of
Common Stock of the Company that have been owned by Optionee for more than six
(6) months (and which have been paid for within the meaning of SEC Rule 144 and,
if such shares were purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares), having a Fair Market
Value equal to the Exercise Price of the Option; (c) by waiver of compensation
due or accrued to Optionee for services rendered; (d) provided that a public
market for the Company's stock exists, through a "same day sale" commitment from
the Optionee and a broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD DEALER") whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; (e)
provided that a public market for the Company's stock exists, through a "margin"
commitment from the Optionee and a NASD Dealer whereby the Optionee irrevocably
elects to exercise the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company; (f) [OPTIONAL AT THE DISCRETION OF THE BOARD:] THROUGH THE DELIVERY OF
A FULL RECOURSE PROMISSORY NOTE BEARING INTEREST (AT NO LESS THAN SUCH RATE AS
SHALL THEN PRECLUDE THE IMPUTATION OF INTEREST UNDER THE INTERNAL REVENUE CODE
OF 1986) AND PAYABLE ON SUCH
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TERMS AS MAY BE PRESCRIBED BY THE BOARD; or (g) by any combination of the
foregoing, provided that the par value of the shares shall be paid in cash or by
check.
5.3 Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee shall pay or make adequate provision for any
applicable federal or state withholding obligations of the Company. If the Board
permits, Optionee may provide for payment of withholding taxes upon exercise of
the Option by requesting that the Company retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case, the
Company shall issue the net number of Shares to the Option by deducting the
Shares retained from the Shares issuable upon exercise.
5.4 Issuance of Shares. Provided that such notice and payment
are in form and substance satisfactory to counsel for the Company, the Company
shall cause the Shares to be issued in the name of Optionee or Optionee's legal
representative. To enforce any restrictions on Optionee's Shares, the Committee
may require Optionee to deposit all certificates, together with stock powers or
other instruments of transfer approved by the Committee appropriately endorsed
in blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee may
cause a legend or legends referencing such restrictions to be placed on the
certificates.
6. NONTRANSFERABILITY OF OPTION. During the lifetime of the Optionee,
this Option shall be exercisable only by Optionee, unless otherwise permitted by
the Board. This Option may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution.
7. TAX CONSEQUENCES. Set forth below is a brief summary as of the Date
of Grant of some of the federal and California tax consequences of exercise of
the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THIS SUMMARY
DOES NOT ADDRESS IN ANY MANNER TAX CONSEQUENCES IN COUNTRIES OTHER THAN THE
UNITED STATES. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.
8. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the
rights of a shareholder with respect to any Shares until Participant exercises
the Option and pays the Exercise Price.
9. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Board that
administers the Plan, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Board shall be final and
binding on the Company and on Optionee.
10. TENURE AS BOARD MEMBER. In consideration of the granting of this
Option, the Optionee agrees to serve as an Independent Director as defined under
the terms of the Plan until the next annual meeting of the stockholders of the
Company. However, nothing in the Plan or this Grant shall confer on Optionee any
right to continue as a Board Member, and the Company expressly reserves its
rights to discharge Optionee at any time for any reason whatsoever, with or
without good cause.
11. ENTIRE AGREEMENT. The Plan and the Directors Stock Option Exercise
Agreement in the form attached hereto as Exhibit A, and the terms and conditions
thereof, are incorporated herein by reference. This Grant, the Plan and the
Directors Stock Option Exercise Agreement constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior understandings and agreements with respect to such
subject matter.
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12. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by facsimile, rapifax or telecopier.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Agreement shall be binding
upon Optinee and Optionee's heirs, executors, administrators, legal
representatives, successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
ON COMMAND CORPORATION
By: __________________________________
Name: _________________________________
Title: _______________________________
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ACCEPTANCE OF STOCK OPTION GRANT
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the Plan and this
Grant. Optionee acknowledges that there may be adverse tax consequences upon
exercise of this Option or disposition of the Shares and that Optionee has been
advised by the Company that Optionee should consult a qualified tax advisor
prior to such exercise or disposition.
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-----------------------------------, Optionee
[ACCEPTANCE SIGNATURE PAGE TO 1997 NON-EMPLOYEE
DIRECTORS NONQUALIFIED INITIAL STOCK OPTION GRANT]
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EXHIBIT A
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION EXERCISE AGREEMENT
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Exhibit A
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN (THE "PLAN")
DIRECTORS STOCK OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of ON COMMAND
CORPORATION (the "Company") as set forth below:
Optionee: _____________________________________ Number of Shares Purchased: _______________
Social Security Number: _______________________ Purchase Price per Share: _________________
Address: ______________________________________ Aggregate Purchase Price: _________________
_______________________________________________ Date of Stock Option Grant: _______________
Type of Stock Option: Nonqualified Stock Option Exact Name of Title to Shares: ____________
___________________________________________
1. DELIVERY OF PURCHASE PRICE. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Directors Nonqualified
Stock Option Grant referred to above (the "Grant") as follows (check as
applicable and complete):
[ ] in cash or by check in the amount of $_____, receipt of which is
acknowledged by the Company;
[ ] by delivery of ____________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by Optionee for at
least six (6) months prior to the date hereof (and which have been paid
for within the meaning of SEC Rule 144) and owned free and clear of all
liens, claims, encumbrances or security interests, valued at the
current Fair Market Value of $_____ per share;
[ ] by the waiver hereby of compensation due or accrued to Optionee for
services rendered in the amount of $_____;
[ ] through a "same-day-sale" commitment, delivered herewith, from
Optionee and the NASD Dealer named therein, in the amount of $_____; or
[ ] through a "margin" commitment, delivered herewith from Optionee and
the NASD Dealer named therein, in the amount of $_____.
[ ] through the delivery of a full recourse promissory note acceptable to
the Board in the amount of $_____, secured by a Pledge Agreement of
even date herewith. The portion of the Purchase Price equal to the par
value of the Shares in the amount of $____ is in cash (by check),
receipt of which is acknowledged by the Company.
2. MARKET STANDOFF AGREEMENT. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements. Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.
3. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Plan and the Grant are incorporated herein by
reference. This Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior
understandings and agreements of the Company and Optionee with respect to the
subject matter hereof, and are governed by California law.
Date:____________________ ________________________________________
SIGNATURE OF OPTIONEE
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ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
SPOUSE'S CONSENT
I acknowledge that I have read the foregoing Directors Stock Option
Exercise Agreement (the "Agreement") and that I know its contents. I hereby
consent to and approve all the provisions of the Agreement and agree that the
shares of the Common Stock of On Command Corporation purchased thereunder (the
"Shares") and any interest I may have in such Shares are subject to all the
provisions of the Agreement. I will take no action at any time to hinder
operation of the Agreement on these Shares or any interest I may have on them.
____________________________________ Date:__________________________
SIGNATURE OF OPTIONEE'S SPOUSE
____________________________________
OPTIONEE'S NAME - TYPED OR PRINTED
____________________________________
SPOUSE'S NAME - TYPED OR PRINTED
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NO. ____
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
STOCK AWARD AGREEMENT
This Stock Award Agreement (this "AGREEMENT") is made and entered into
as of _______________, 19____ (the "EFFECTIVE DATE") by and between On Command
Corporation, a Delaware corporation (the "COMPANY"), and the participant named
below (the "PARTICIPANT"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 1997 Non-Employee Directors Option
Plan (the "PLAN").
PARTICIPANT: _______________________________________
SOCIAL SECURITY NUMBER: _______________________________________
ADDRESS: _______________________________________
TOTAL NUMBER OF SHARES: _______________________________________
FAIR MARKET VALUE PER SHARE
AT THE EFFECTIVE DATE: _______________________________________
TOTAL FAIR MARKET VALUE
AT THE EFFECTIVE DATE: _______________________________________
TOTAL PAR VALUE
AT THE EFFECTIVE DATE: _______________________________________
1. GRANT OF SHARES.
1.1 GRANT OF SHARES. On the Effective Date and subject to the
terms and conditions of this Agreement and the Plan, and in consideration of
services rendered by Participant to the Company, and provided that the par value
of the shares shall be paid by Participant in cash (by check), the Company
hereby grants to Participant the Total Number of Shares set forth above of the
Company's Common Stock. As used in this Agreement, the term "SHARES" refers to
the shares purchased under this Agreement and includes all securities received
(a) as a result of stock dividends or stock splits in respect of the Shares and
(b) in replacement of the Shares, whether in a merger, recapitalization,
reorganization or similar corporate transaction.
1.2 TITLE TO SHARES. The exact spelling of the name(s) under
which Participant will take title to the Shares is:
________________________________________________________________
________________________________________________________________
Participant desires to take title to the Shares as follows:
[ ] Individual, as separate property
[ ] Husband and wife, as community property
[ ] Joint Tenants
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[ ] Alone or with spouse as trustee(s) of the
following trust (including date):
__________________________________________
__________________________________________
[ ] Other; please specify: ___________________
__________________________________________
2. DELIVERY.
2.1 DELIVERIES BY PARTICIPANT. Participant hereby delivers to
the Company (i) this Agreement executed by Participant and (ii) payment for the
par value of the Shares in cash or check.
2.2 DELIVERIES BY THE COMPANY. Upon its receipt of this
Agreement in form and substance satisfactory to counsel for the Company and cash
payment for the par value of the Shares, the Company will issue a duly executed
stock certificate evidencing the Shares in the name specified in Section 1.2
above.
3. REPRESENTATIONS AND WARRANTIES OF PARTICIPANT. Participant
represents and warrants to the Company that Participant has received a copy of
the Plan and this Agreement, has read and understands the terms of the Plan and
this Agreement and agrees to be bound by their terms and conditions.
4. RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of
this Agreement, Participant will have all of the rights of a stockholder of the
Company with respect to the Shares from and after the date that the Shares are
issued until such time as Participant disposes of the Shares.
5. NO OBLIGATION TO CONTINUE AS DIRECTOR. Nothing in the Plan or
this Agreement shall confer on Participant any right to continue as a Director
of, or in any other relationship with, the Company or any Parent or Subsidiary
of the Company, or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's relationship at any time,
with or without cause.
6. MARKET STANDOFF AGREEMENT. Participant, if requested by the
Company and an underwriter of Common Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company held by Participant during the period requested
by the managing underwriter following the effective date of a registration
statement of the Company filed under the Securities Act, provided that all
officers and directors of the Company are required to enter into similar
agreements. Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the shares (or other securities) subject to the foregoing
restriction until the end of such period.
7. TAXES.
7.1 TAX WITHHOLDING. Participant understands and acknowledges
that Participant must recognize ordinary income in the amount of the Total Fair
Market Value of the Shares on the Effective Date. Prior to the issuance of the
Shares, Participant must pay or provide for any applicable federal or state
withholding obligations of the Company. Participant may provide for payment of
withholding taxes by requesting the Company to retain Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the Participant by
deducting the Shares retained from the Total Number of Shares set forth above.
7.2 TAX CONSEQUENCES. PARTICIPANT UNDERSTANDS THAT PARTICIPANT
MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S ACQUISITION OR
DISPOSITION OF THE SHARES. PARTICIPANT REPRESENTS THAT PARTICIPANT HAS CONSULTED
WITH ANY TAX ADVISER PARTICIPANT DEEMS ADVISABLE IN CONNECTION
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WITH THE ACQUISITION OR DISPOSITION OF THE SHARES AND THAT PARTICIPANT IS NOT
RELYING ON THE COMPANY FOR ANY TAX ADVICE.
8. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
the Shares will be subject to and conditioned upon compliance by the Company and
Participant with all applicable state and federal laws and regulations and with
all applicable requirements of any stock exchange or automated quotation system
on which the Company's Common Stock may be listed or quoted at the time of such
issuance or transfer.
9. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware as such
laws are applied to agreements between Delaware residents entered into and to be
performed entirely within Delaware. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
10. NOTICES. Any notice required to be given or delivered to the
Company shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given or
delivered to Participant shall be in writing and addressed to Participant at the
address indicated above or to such other address as Participant may designate in
writing from time to time to the Company. All notices shall be deemed
effectively given upon personal delivery, three (3) days after deposit in the
United States mail by certified or registered mail (return receipt requested),
one (1) business day after its deposit with any return receipt express courier
(prepaid) or one (1) business day after transmission by fax or telecopier.
11. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
12. HEADINGS. The captions and headings of this Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Agreement. All references herein to Sections will refer to Sections of this
Agreement.
13. ENTIRE AGREEMENT. The Plan and this Agreement constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement and supersede all prior understandings and agreements, whether
oral or written, between the parties hereto with respect to the specific subject
matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate as of the Effective Date.
ON COMMAND CORPORATION PARTICIPANT
By: ______________________________ ____________________________________
(Signature)
__________________________________ ____________________________________
(Please print name) (Please print name)
__________________________________
(Please print title)
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