EXHIBIT 4.2
OUTDOOR CHANNEL HOLDINGS, INC.
STOCK OPTION AGREEMENT
Type of Option (check one): |_| Incentive |_| Nonqualified No. ___
This Stock Option Agreement (the "Agreement") is entered into effective
as of November 13, 2003 by and between OUTDOOR CHANNEL HOLDINGS, Inc. (formally
known as GLOBAL OUTDOORS INC.), an Alaskan corporation (the "Company"), and
_____________(the "Optionee") pursuant to the Company's 1995 Stock Option Plan
(the "Plan").
1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(the "Option") to purchase all or any portion of _____________ shares (the
"Shares") of the Common Stock of the Company at a purchase price of $__________
per share, (the "Exercise Price"), subject to the terms and conditions set forth
in this Agreement and the provisions of the Plan. The Exercise Price equals or
exceeds the market price of the Company's stock on the day the Company
authorized the grant of the Option. If the box marked "Incentive" above is
checked, then this Option is intended to qualify as an "incentive stock option"
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). If this Option fails in whole or in part to qualify as an incentive
stock option, or if the box marked "Nonqualified" is checked, then this Option
shall to that extent constitute a nonqualified stock option.
2. VESTING OF OPTION. Subject to the provisions of Section 3 below, the
right to exercise this Option shall vest according to the Vesting Schedule in
2(a), and the vested portion of this Option shall be fully exercisable from time
to time in whole or in part during its term.
(a) VESTING SCHEDULE: twenty five percent (25%) or _________
as of May 13, 2004; twenty five percent (25%) or __________ as of May 13, 2005;
twenty five percent (25%) or ______ as of May 13, 2006, and twenty five percent
(25%) or _________ as of May 13, 2007.
3. TERM OF OPTION. Optionee's right to exercise this Option shall
terminate upon the first to occur of the following:
(a) the expiration of five (5) years from the date of this
Agreement;
(b) the expiration of one year from the date of termination of
Optionee's Continuous Service if such termination occurs for any reason other
than voluntary resignation or termination for Cause;
(c) the expiration of six months from the date of termination
of Optionee's Continuous Service if Optionee's Continuous Service is terminated
for Cause or if Optionee's Continuous Service is terminated due to voluntary
resignation;
As used herein, the term "Continuous Service" means (i) employment by
either the Company or any parent or subsidiary corporation of the Company, or by
a corporation or a parent or subsidiary of a corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the Code applies, which
is uninterrupted except for vacations, illness, or leaves of absence which are
approved in writing by the Company or any of such other employer corporations,
if applicable, (ii) service as a member of the Board of Directors of the Company
until Optionee resigns, is removed from office, or Optionee's term of office
expires and he or she is not reelected, or (iii) so long as Optionee is engaged
as a consultant or service provider to the Company or other corporation referred
to in clause (i) above.
4. EXERCISE OF OPTION. On or after the vesting of any portion of this
Option in accordance with Section 2 above, and until termination of this Option
in accordance with Section 3 above, the portion of this Option which has vested
may be exercised in whole or in part by the Optionee (or, after his or her
death, by the person designated in Section 5 below) upon delivery of the
following to the Company at its principal executive offices:
(a) a written notice of exercise which identifies this
Agreement and states the number of Shares then being purchased (but no
fractional Shares may be purchased);
(b) a check or cash in the amount of the Exercise Price or, in
lieu of exercising this Option by payment of check or cash, the Optionee may
elect to allow the Company, at the Company's sole discretion, to withhold from
issuance a number of Shares with an aggregate fair market value equal to the
aggregate Exercise Price payable by Optionee, provided that the fair market
value of each Share shall be the last trade price per share of Common Stock on
the last trading day prior to the exercise date as reported by NASD, the OTC
Bulletin Board, or a reputable exchange, (or payment of the Exercise Price in
such other form of lawful consideration as the Administrator may approve from
time to time under the provisions of Section 5.3 of the Plan);
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal, state or
other applicable tax laws with respect to the taxable income, if any, recognized
by the Optionee in connection with the exercise of this Option (unless the
Company and Optionee shall have made other arrangements for deductions or
withholding from Optionee's wages, bonus or other compensation payable to
Optionee, or by the withholding of Shares issuable upon exercise of this Option
or the delivery of Shares owned by the Optionee in accordance with Section 9.1
of the Plan, provided such arrangements satisfy the requirements of applicable
tax laws); and
(d) a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of the
Optionee, or person designated in Section 5 below, as the case may be.
5. DEATH OF OPTIONEE; NO ASSIGNMENT. The rights of the Optionee under
this Agreement may not be assigned or transferred except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee. Any attempt to sell, pledge, assign,
hypothecate, transfer or dispose of this Option in contravention of this
Agreement or the Plan shall be void and shall have no effect. If the Optionee's
Continuous Service terminates as a result of his or her death, and provided
Optionee's rights hereunder shall have vested pursuant to Section 2 hereof,
Optionee's legal representative, his or her legatee, or the person who acquired
the right to exercise this Option by reason of the death of the Optionee
(individually, a "Successor") shall succeed to the Optionee's rights and
obligations under this Agreement. After the death of the Optionee, only a
Successor may exercise this Option.
6. REPRESENTATIONS AND WARRANTIES OF OPTIONEE.
(a) Optionee represents and warrants that this Option is being
acquired by Optionee for Optionee's personal account, for investment purposes
only, and not with a view to the distribution, resale or other disposition
thereof.
(b) Optionee acknowledges that the Company may issue Shares
upon the exercise of the Option without registering such Shares under the
Securities Act of 1933, as amended (the "Act"), on the basis of certain
exemptions from such registration requirement. Accordingly, Optionee agrees that
his or her exercise of the Option may be expressly conditioned upon his or her
delivery to the Company of an investment certificate including such
representations and undertakings as the Company may reasonably require in order
to assure the availability of such exemptions, including a representation that
Optionee is acquiring the Shares for investment and not with a present intention
of selling or otherwise disposing thereof and an agreement by Optionee that the
certificates evidencing the Shares may bear a legend indicating such
non-registration under the Act and the resulting restrictions on transfer.
Optionee acknowledges that, because Shares received upon exercise of an Option
may be unregistered, Optionee may be required to hold the Shares indefinitely
unless they are subsequently registered for resale under the Act or an exemption
from such registration is available.
(c) Optionee acknowledges receipt of a copy of the Plan and
understands that all rights and obligations connected with this Option are set
forth in this Agreement and in the Plan.
7. RESTRICTIVE LEGENDS. Optionee hereby acknowledges that federal
securities laws and the securities laws of the state in which he or she resides
may require the placement of certain restrictive legends upon the Shares issued
upon exercise of this Option, and Optionee hereby consents to the placing of any
such legends upon certificates evidencing the Shares as the Company, or its
counsel, may deem necessary or advisable; provided, however, that the Company
represents to Optionee that, upon exercise of the Option, the Shares may, at the
Company's sole discretion, be registered and issued pursuant to a Registration
Statement on Form S-8.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants that this Agreement
has been duly executed and delivered by a duly authorized officer of the Company
and constitutes the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be subject to or limited by (a) bankruptcy, insolvency, fraudulent
conveyance, reorganization, arrangement, moratorium, marshalling or other
similar laws relating to or affecting the rights or remedies of creditors and
(b) general equitable principles including those affecting the availability of
specific performance, injunctive relief or other equitable remedies, regardless
of whether the issue of enforceability is considered in a proceeding in equity
or at law; and
(b) All corporate actions of the Company and its directors and
stockholders required in order to authorize the execution and delivery by the
Company of this Agreement and the performance of its respective obligations
hereunder, have been duly and validly taken in accordance with applicable laws
and the Articles of Incorporation and Bylaws of the Company.
9. ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend or other change in the
capital structure of the Company, then appropriate adjustment shall be made by
the Administrator to the number of Shares subject to the unexercised portion of
this Option and to the Exercise Price per share, in order to preserve, as nearly
as practical, but not to increase, the benefits of the Optionee under this
Option, in accordance with the provisions of Section 4.2 of the Plan.
10. CONFIDENTIALITY.
(a) CONFIDENTIAL INFORMATION. The Optionee recognizes and
acknowledges that in the course of his/her employment with the Company and its
subsidiaries, and as result of the position of trust as an employee, he/she will
obtain private, confidential and proprietary information and data relating to
the Company and subsidiaries of the Company, including without limitation,
financial documents, tax returns, non-financial documents, customer lists,
customer and supplier pricing, business plans, sales and marketing material,
advertiser lists, advertising strategies, proprietary advertising channels,
producer lists, leases, agreements, and other information relating to the
business operations of the Company (collectively referred to as "Confidential
Information"). Confidential information also includes the Company's and its
subsidiaries' technical information including trade secrets, proprietary
operational data, know-how, processes, software programs, software source
documents and current and future products and services.
(b) NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION.
Optionee agrees that he/she will not during his employment or after his/her
employment directly or indirectly make use of, disseminate, or in any way
disclose any Confidential Information including the solicitation of the
Company's and its subsidiaries' members, customers, and advertisers except for
the sole and exclusive purpose as an employee of the Company, unless (i) the
Confidential Information has been public through no action or fault of the
Optionee, or (ii) its disclosure is requested or compelled by applicable law or
regulatory agency, or (iii) its disclosure has been approved or authorized by
the Company. Optionee further agrees that after his/her employment with the
Company or its subsidiaries, or at other times as the Company requests, the
Optionee will return to the Company all documents, papers, and records
constituting Confidential Information, and all copies, extracts, or summaries of
the same in the Optionee's possession and control.
11. NON-COMPETITION. The Optionee agrees that while in the employ of
the Company and for a period of two (2) consecutive one (1) year terms after the
Optionee's employment is terminated, for any reason, the Optionee will not,
directly or indirectly, as a principal or agent, or in any other capacity, own
manage, operate, participate in or be employed by, or provide consulting
services, or otherwise be interested in, or connected in any manner with, any
television channel which directly competes with the Company by providing
programming which is directly competitive to the Company's programming. For
purposes of this Section, a television/cable channel providing more than 5%
hunting and fishing programming is assumed to be television/cable channel which
is directly competitive to the Company's programming. It is assumed that The
Outdoor Life ▇▇▇▇▇▇▇, ▇▇▇▇▇, TNN and The Sportsman's Channel directly or
indirectly compete with the Company. This Non-Competition provision is limited
to television/cable channels whose principal place of business is located within
the United States.
12. NON-INTERFERENCE. The Optionee agrees that he will not, while in
the employ of the Company or its subsidiaries and for a period of three (3)
consecutive one (1) year terms after the Optionee's employment is terminated,
for any reason, solicit the employment of any employee of the Company or its
subsidiaries for himself or on behalf of any other person, corporation, entity,
or business organization, or otherwise interfere with the employment
relationship between any employee or officer of the Company or its subsidiaries.
13. OPTION CONSIDERATION. The Optionee recognizes and acknowledges that
part of the inducement and consideration for the Company to enter into this
Agreement, is the Optionee's agreement to the Confidentiality, Non-Competition
and Non-Interference provisions stated in Sections 10, 11, and 12, of this
Agreement.
14. NO EMPLOYMENT CONTRACT CREATED. Neither the granting of this Option
nor the exercise hereof shall be construed as granting to the Optionee any right
with respect to continuance of employment by the Company or any of its
subsidiaries.
15. RIGHTS AS SHAREHOLDER. The Optionee (or transferee of this option
by will or by the laws of descent and distribution) shall have no rights as a
shareholder with respect to any Shares covered by this Option until the date of
the issuance of a stock certificate or certificates to him or her for such
Shares, notwithstanding the exercise of this Option.
16. INTERPRETATION. This Option is granted pursuant to the terms of the
Plan, and shall in all respects be interpreted in accordance therewith. The
Administrator shall interpret and construe this Option and the Plan, and any
action, decision, interpretation or determination made in good faith by the
Administrator shall be final and binding on the Company and the Optionee. As
used in this Agreement, the term "Administrator" shall refer to the committee of
the Board of Directors of the Company appointed to administer the Plan, and if
no such committee has been appointed, the term Administrator shall mean the
Board of Directors.
17. NOTICES. Any notice, demand or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed given when
delivered personally or three days after being deposited in the United States
mail, as certified or registered mail, with postage prepaid, and addressed, if
to the Company, at its principal place of business, Attention: the Chief
Executive Officer, and if to the Optionee, at his most recent address as shown
in the employment or stock records of the Company.
18. ANNUAL AND OTHER PERIODIC REPORTS. During the term of this
Agreement, the Company will make available to the Optionee copies of all annual
and other periodic financial and informational reports that the Company
distributes generally to its shareholders. All of the Company's public filings
including annual and quarterly financial statements can be found at the
Securities and Exchange Commission web site or at the Company's web site. Please
see attached cover letter to this Agreement explaining how to access the
Securities and Exchange Commission public filings.
19. GOVERNING LAW. The validity, construction, interpretation, and
effect of this Option shall be governed by and determined in accordance with the
laws of the State of California.
20. SEVERABILITY. Should any provision or portion of this Agreement be
held to be unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first written above.
OPTIONEE: _____________________________
COMPANY: By: ▇▇▇▇▇ ▇▇▇▇▇▇
Its: President & Chief Executive Officer
Outdoor Channel Holdings, Inc., an Alaskan
Corporation.