EXHIBIT 4.5
STOCK OPTION AGREEMENT
AGREEMENT, made as of June 23, 1995 between INDIVIDUAL
INVESTOR GROUP, INC., a Delaware corporation (the "Company"), and
Scot A. Rosenblum ("Rosenblum").
WHEREAS, on June 23, 1995, the Board of Directors of the
Company authorized the grant to Rosenblum of an option to purchase an aggregate
of 50,000 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, Rosenblum desires to acquire said option on the
terms and conditions set forth in this Agreement;
IT IS AGREED:
1. The Company hereby grants to Rosenblum the right and option
(the "Option") to purchase all or any part of an aggregate of 50,000 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 16,667 Option Shares
on June 23 in each of 1996 and 1997, and 16,666 Option Shares on June 23, 1998.
The Option Shares may be purchased at an exercise price of $5.75 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 June 23,
2005 (the "Exercise Period").
3. (a) If Rosenblum's employment is terminated by the Company
without cause, 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.
(b) If Rosenblum's employment is terminated
for any reason other than death, disability, termination by the Company
without cause or by the Company for cause, then the Option exercisable as of
the date of termination may thereafter be exercised by Rosenblum for a
period of three months from the date of termination 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 shall
immediately terminate.
(c) In the event Rosenblum's employment is
terminated by the Company for cause, the Company also may require Rosenblum
to return to the Company the economic value of any Option Shares purchased
under this Agreement by Rosenblum within the six month period prior to the date
of termination. In such event, Rosenblum shall remit to the Company in cash the
amount equal to the difference between the Fair Market Value (as defined in
Section 12 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.
(d) Upon Rosenblum's death, the portion,
if any, of the Option that was exercisable as of the date of death may
thereafter be exercised by Rosenblum's legal representative or legatee under
the will of Rosenblum 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 Rosenblum's death.
(e) If Rosenblum's employment by the Company
terminates by reason of Rosenblum's disability, the portion, if any, of the
Option that was exercisable as of the date of termination of employment may
thereafter be exercised by Rosenblum 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. For the purposes of this Agreement,
disability shall mean Rosenblum's incapacity by illness or other disability
from performing his usual employment obligations for a period in excess of
240 days (whether or not consecutive) or 120 days consecutively, as the case
may be, during any twelve month period.
4. The Option shall not be assignable or transferable except,
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in the event of the death of Rosenblum, by will or by the laws of descent and
distribution. No transfer of the Option by Rosenblum 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.
5. The Company shall promptly issue certificates for any
Option Shares purchased hereunder. Rosenblum 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.
6. 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.
7. The Company hereby represents and warrants to Rosenblum
that the Option Shares, when issued and delivered by the Company to Rosenblum in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and non-assessable.
8. Rosenblum hereby represents and warrants to the Company
that Rosenblum is acquiring the Option and shall acquire the Option Shares for
Rosenblum's own account and not with a view to the distribution thereof.
9. Anything in this Agreement to the contrary notwithstanding,
Rosenblum hereby agrees that Rosenblum shall not sell, transfer by any means or
otherwise dispose of the Option Shares acquired by Rosenblum 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) Rosenblum 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.
10. Rosenblum 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 Rosenblum for inspection.
(b) If Rosenblum exercises the Option,
Rosenblum 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
registered under the Act and cannot be sold by Rosenblum unless they are
registered under the Act or an exemption therefrom is available.
(c) In Rosenblum's position with the
Company, Rosenblum 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 legends:
"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."
11. Notwithstanding the foregoing, upon a "change in control"
of the Company as defined below, the Option shall be accelerated and be
immediately exercisable as to all the Option Shares under this Option and remain
exercisable until the close of business on the date immediately preceding the
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tenth anniversary of the date hereof. For purposes of this Agreement, a "change
in control" of the Company shall mean a change in control of a nature that would
be required to be reported in response to Item 5(f) 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 (a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than Jonathan Steinberg or
Saul Steinberg, becomes the "beneficial owner," as defined below, directly or
indirectly, of securities of the Company representing 40% or more of the
combined voting power of the Company's then outstanding securities ordinarily
having the right to vote at elections of directors ("Voting Securities"), or (b)
individuals who constitute the Board on the date of this Agreement ("Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date of this Agreement
whose election, or nomination for election by the Company's stockholders, was
approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for director, without
objection to such nomination) shall be, for purposes of this clause (b),
considered as though such person were a member of the Incumbent Board.
Notwithstanding anything in the foregoing to the contrary, no change in control
shall be deemed to have occurred for purposes of this Agreement by virtue of
either the beneficial ownership (or sale) by Rosenblum, or with members of
Rosenblum's immediate family, of 40% or more of the Voting Securities or any
transaction which results in Rosenblum, or a group of persons which includes
Rosenblum, acquiring (or selling) 40% or more of either the voting power of the
Company's Voting Securities or other voting securities of any corporation which
acquires all or substantially all of the assets of the Company, whether by way
of merger, consolidation, sale of such assets or otherwise.
For purposes of this Agreement, "beneficial owner" shall be as
defined in Rule 13d-3 under the Exchange Act, except that the provisions of Rule
13d-3(d)(2), which exclude certain persons from the Rule, shall not exclude
those persons from being deemed beneficial owners for purposes of this
Agreement.
12. Subject to the terms and conditions of the Agreement, the
Option may be exercised by written notice to the Company at its principal place
of business. Such notice shall state the election to exercise the Option and the
number of Option Shares in respect to which it is being exercised, shall contain
a representation and agreement by the person or persons so exercising the Option
that the Option Shares are being purchased for investment and not with a view to
the distribution or resale thereof, and shall be signed by the person or persons
so exercising the Option. Such notice shall be accompanied by payment of the
full purchase price of the Option Shares. Payment of the purchase price shall be
made in cash or by check, bank draft or money order payable to the order of the
Company; provided, however, that, at the election of Rosenblum, the purchase
price for any or all of the Option Shares to be acquired may be paid by: (i) the
surrender of shares of Common Stock of the Company held by or for the account of
Rosenblum with a fair market value equal to the purchase price multiplied by the
number of Option Shares to be purchased, or (ii) the surrender of any
exercisable but unexercised portion of the Option having a fair market value
equal to the purchase price multiplied by the number of Option Shares to be
purchased. In either case, the fair market value of the surrendered shares or
options shall be determined as of the date of exercise as follows: "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. The "fair market value" of a surrendered portion of
the Option means, as of the exercise date, an amount equal to the excess of the
total fair market value of the shares of Common Stock underlying the surrendered
portion of the Option (as determined in accordance with the immediately
preceding sentence) over the total purchase price of such shares of Common Stock
underlying the surrendered portion of the Option.
13. 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.
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14. 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.
15. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter thereof.
16. 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.
17. 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.
INDIVIDUAL INVESTOR GROUP, INC. Address: 333 Seventh Avenue, Fifth Floor
New York, New York 10001
/s/ Jonathan L. Steinberg
- ---------------------------------
Jonathan L. Steinberg, Chairman of
the Board and Chief Executive Officer
/s/ Scot A. Rosenblum Address: 55 West 84th Street, Apt. #6
- ------------------------------ New York, New York 10024
SCOT A. ROSENBLUM
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