EXHIBIT 4.9
STOCK OPTION AGREEMENT
AGREEMENT, made as of March 15, 1996 between INDIVIDUAL
INVESTOR GROUP, INC., a Delaware corporation (the "Company"), and Jay Burzon
("Burzon").
WHEREAS, the Company and Burzon have entered into an
Employment Agreement of even date herewith pursuant to which Burzon will be
employed by the Company ("Employment Agreement"); and
WHEREAS, the Employment Agreement provides that the Company
will grant to Burzon an option to purchase an aggregate of 100,000 of the
authorized but unissued shares of the Common Stock of the Company, $.01 par
value (the "Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, Burzon desires to acquire said option on the terms
and conditions set forth in this Agreement;
IT IS AGREED:
1. The Company hereby grants to Burzon the right and option
(the "Option") to purchase all or any part of an aggregate of 100,000 shares of
the Common Stock on the terms and conditions set forth herein (the "Option
Shares"). The Option is a non-qualified stock option not intended to qualify
under any section of the Internal Revenue Code of 1986, as amended.
2. The Option shall be exercisable as to 33,333 Option Shares
on and after March 15, in each of 1997 and 1998 and as to 33,334 Option Shares
on and after March 15, 1999. The Option Shares may be purchased at an exercise
price of $6.00 per share. After a portion of the Option becomes exercisable, it
shall remain exercisable, except as otherwise provided herein, until the close
of business on March 15, 2006 (the "Exercise Period").
3. (a) If Burzon's employment is terminated by the Company for
cause (as defined in Section 9(a) of the Employment Agreement), the Option,
whether or not exercisable, shall immediately expire. In addition, the Company
also may require Burzon to return to the Company the economic value of any
Option Shares purchased under this Agreement by Burzon within the six month
period prior to the date of termination. In such event, Burzon shall remit to
the Company in cash the amount equal to the difference between the Fair Market
Value (as defined in Section 14 of this Agreement) of the Option Shares on the
date of termination (or the sales price of the Option Shares sold during the
six-month period) and the Exercise Price of the Option Shares.
(b) If Burzon's employment is terminated by the
Company without cause (as defined in Section 9(a) of the Employment Agreement),
the portion of the Option, if any, that was exercisable as of the date of
termination of employment may be exercised for a period of six months from
the termination of employment or until the expiration of the Exercise Period,
whichever is shorter. The portion of the Option, if any, that was not
exercisable as of the date of termination of employment shall immediately
terminate upon the termination of employment.
(c) If Burzon's employment by the Company
terminates by reason of Burzon's disability, the portion, if any, of th
Option that was exercisable as of the date of termination of employment may
thereafter be exercised by Burzon or his guardian or legal representative
for a period of one year from the date of termination of employment or
until the expiration of the Exercise Period, whichever period is shorter.
The portion of the Option, if any, that was not exercisable as of the date
of termination of employment shall immediately terminate upon the
termination of employment.
(d) Upon Burzon's death, the portion, if any,
of the Option that was exercisable as of the date of death may thereafter
be exercised by Burzon's legal representative or legatee under the will of
Burzon for a period of one year from the date of death or until the expiration
of the Exercise Period, whichever period is shorter. The portion of the
Option, if any, that was not exercisable as of the date of death shall
immediately terminate upon Burzon's death.
4. If a court of competent jurisdiction shall determine that
Burzon has breached his obligations under Section 5 of the Employment Agreement
subsequent to his employment by the Company, the Company may require Burzon to
return to the Company the economic value of any Option Shares purchased under
this Agreement by Burzon within the six month period prior to the date of
termination. In such event, Burzon shall remit to the Company in cash the amount
equal to the difference between the Fair Market Value (as defined in Section 14
of this Agreement) of the Option Shares on the date of termination (or the sales
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price of the Option Shares sold during the six-month period) and the Exercise
Price of the Option Shares.
5. The Option shall not be assignable or transferable except,
in the event of the death of Burzon, by will or by the laws of descent and
distribution. No transfer of the Option by Burzon 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 such other evidence as the Company may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions of the Option.
6. Burzon shall not have any of the rights of a stockholder
with respect to the Option Shares until such shares have been issued after the
due exercise of the Option.
7. The Option shall be exercised in whole or in part by
written notice in substantially the form attached hereto as Exhibit A directed
to the Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice. The Company shall deliver a certificate for the Option
Shares to Burzon as soon as practicable after payment therefor. Burzon shall
make cash payments by wire transfer, certified or bank check or personal check,
in each case payable to the order of the Company; the Company shall not be
required to deliver certificates for Option Shares until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof. Burzon may in his sole discretion, use Common Stock of the
Company owned by him to pay the purchase price for the Option Shares by delivery
of stock certificates in negotiable form which are effective to transfer good
and valid title thereto to the Company, free of any liens or encumbrances.
Shares of Common Stock used for this purpose shall be valued at the Fair Market
Value (as defined in Section 14 below).
8. Not later than the date as of which an amount first becomes
includible in the gross income of Burzon for Federal income tax purposes with
respect to the Option, Burzon shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any Federal, state and
local taxes of any kind required by law to be withheld or paid with respect to
such amount. The obligations of the Company under this Agreement shall be
conditional upon such payment or arrangements with the Company and the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to Burzon from the Company. Any
required withholding tax may be paid in cash or with Common Stock in accordance
with the preceding Sections.
9. In the event of a reorganization, recapitalization,
reclassification, stock split or exchange, stock dividend, combination of
shares, or any other similar change in the Common Stock of the Company,
equitable proportionate adjustments shall be made by the Company in the number
and kind of shares covered by the Option and in the option price thereunder.
10. The Company hereby represents and warrants to Burzon that
the Option Shares, when issued and delivered by the Company to Burzon in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and non-assessable.
11. Burzon hereby represents and warrants to the Company that
Burzon is acquiring the Option and shall acquire the Option Shares for Burzon's
own account and not with a view to the distribution thereof.
12. Anything in this Agreement to the contrary
notwithstanding, Burzon hereby agrees that Burzon shall not sell, transfer by
any means or otherwise dispose of the Option Shares acquired by Burzon without
registration under the Securities Act of 1933 (the "Act"), or in the event that
they are not so registered, unless (a) an exemption from the Act is available
thereunder, and (b) Burzon has furnished the Company with notice of such
proposed transfer and the Company's legal counsel, in its reasonable opinion,
shall deem such proposed transfer to be so exempt.
13. Burzon hereby acknowledges that:
(a) All reports and documents required to be filed
by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 within the last 12 months have been made
available to Burzon for inspection.
(b) If Burzon exercises the Option, Burzon must
bear the economic risk of the investment in the Option Shares for an
indefinite period of time because the Option Shares will not have been
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registered under the Act and cannot be sold by Burzon unless they are
registered under the Act or an exemption therefrom is available.
(c) In Burzon's position with the Company, Burzon
has had both the opportunity to ask questions of and receive answers from
the officers of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to obtain
any additional information to the extent the Company possesses or may
possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of the information obtained
pursuant to subparagraph (a) above.
(d) The Company shall place stop transfer orders
with its transfer agent against the transfer of the Option Shares in the
absence of registration under the Act or an exemption therefrom.
(e) The certificates evidencing the Option Shares
shall bear the following legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the
Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
(f) The Company agrees to register the Option
Shares under the Act on the next Form S-8 filed by the Company, but in any
event, not later than May 31, 1997.
14. "Fair market value" of the Common Stock means, as of the
exercise date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day preceding such date, as reported by the
exchange or Nasdaq, as the case may be; (ii) if the Common Stock is not listed
on a national securities exchange or quoted on the Nasdaq National Market or
Nasdaq SmallCap Market, but is traded in the over-the-counter market, the
closing bid price of the Common Stock on the last trading day preceding such
date for which such quotations are reported by the National Quotation Bureau,
Incorporated or similar publisher of such quotations; and (iii) if the fair
market value of the Common Stock cannot be determined pursuant to clause (i) or
(ii) above, such price as the Company shall determine, in good faith.
15. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall either be delivered personally or sent
by certified mail, return receipt requested, postage prepaid, to the parties at
their respective addresses set forth below, or to such other address as either
shall have specified by notice in the writing to the other, and shall be deemed
duly given hereunder when so delivered or three days after being mailed, as the
case may be.
16. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any other or subsequent breach.
17. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter thereof.
18. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and to the extent not prohibited herein, their
respective heirs, successors, assigns and representatives. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto and as provided above, their respective heirs, successors,
assigns and representatives any rights, remedies, obligations or liabilities.
19. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the date first above written.
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INDIVIDUAL INVESTOR GROUP, INC. Address: 1633 Broadway, 38th Floor
New York, NY 10019
By: /s/ Jonathan L. Steinberg
- -------------------------------
Jonathan L. Steinberg, Chairman
/s/ Jay Burzon Address: 68 Oak Hill Road
- ------------------------------- Chappaqua, NY 10514
JAY BURZON
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