Exhibit 10(a)
AS AMENDED THROUGH NOVEMBER 1, 1996
UNITEL VIDEO, INC.
1988 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE. UNITEL VIDEO, INC., a Delaware corporation (the
"Company"), hereby adopts the Unitel Video, Inc. 1988 Non-Qualified Stock Option
Plan effective July 26, 1988 (the "Plan"). The Plan is intended as an
additional incentive to key employees (together the Optionees") to enter into or
remain in the employ of the Company or any Affiliate (as defined below) and to
devote themselves to the Company's success by providing them with an opportunity
to acquire or increase their proprietary interest in the Company through receipt
of rights (the "Options") to acquire the Company's Common Stock, par value $.01
(the "Common Stock"). For purposes of the Plan, the term "Affiliate" shall mean
a corporation which is a parent corporation or a Subsidiary corporation with
respect to the Company within the meaning of section 425(e) or (f)'of the
Internal Revenue Code of 1986, as amended (the "Code").
2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board"), unless the Board, in compliance with any
applicable by-law or agreement binding on the Company, and to the extent it
shall determine, shall designate a committee of the Board of Directors
consisting of not less than two directors, each of whom shall be a "Non-Employee
Director" within the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934, as amended, to administer
the Plan in its stead. References in the Plan to determinations and actions by
the Board shall be deemed to include determinations and actions by such
committee.
(a) MEETINGS. The Board shall hold meetings at such times and
places as it may determine for purposes of administering the Plan.
(b) GRANTS. The Board shall from time to time at its discretion
cause the Company to grant Options pursuant to the terms of the Plan. The Board
shall have plenary authority to determine the Optionees to whom and the times at
which Options shall be granted, the number of Option Shares (as defined in
Section 4) to be granted and the price and other terms and conditions thereof,
subject, however, to the express provisions of the Plan. In making such
determinations the Board may take into account the nature of the Optionee's
services and responsibilities, the Optionee's present and potential contribution
to the Company's success and such other factors as it may deem relevant. The
interpretation and construction by the Board of any provision of the Plan or of
any Option granted under it shall be final, binding and conclusive.
(c) EXCULPATION. No member of the Board shall be personally
liable for monetary damages as such for any action taken or any failure to take
any action in connection with the administration of the Plan or the granting of
Options thereunder in the absence of bad faith or willful misconduct.
(d) INDEMNIFICATION. Each member of the Board shall be entitled
without further act on his part to indemnity from the Company to the fullest
extent provided by applicable law and the Company's Certificate of Incorporation
and/or by-laws in connection with or arising out of any action, suit or
proceeding with respect to the administration of the Plan or the granting of
Options thereunder in which he may be involved by reason of his being or having
been a member of the Board, whether or not he continues to be such member of the
Board at the time of the action, suit or proceeding.
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3. ELIGIBILITY. The Board, in its sole discretion, shall determine
whether an individual qualifies as an Optionee. An Optionee may receive more
than one Option, but only on the terms and subject to the restrictions of the
Plan.
4. OPTION SHARES. The aggregate maximum number of shares of the
Common Stock for which Options may be issued under the Plan is 125,000 shares,
adjusted as provided in Section 8 ("Option Shares"). Option Shares shall be
issued from authorized and unissued Common Stock or Common Stock held in or
hereafter acquired for the treasury of the Company. If any outstanding Option
granted under the Plan expires, lapses or is terminated for any reason, the
Option Shares allocable to the unexercised portion of such Option may again be
the subject of an Option granted pursuant to the Plan.
5. TERM OF PLAN. The Plan is effective as of July 26, 1988, the
date on which it was adopted by the Board of Directors. No Option may be
granted under the Plan after July 25, 1998.
6. TERMS AND CONDITIONS OF OPTIONS. Options granted pursuant to the
Plan shall be evidenced by written documents (the "Option Documents") in such
form as the Board shall from time to time approve, which Option Documents shall
comply with and be subject to the following terms and conditions and such other
terms and conditions which the Board shall from time to time require which are
not inconsistent with the terms of the Plan.
(a) NUMBER OF OPTION SHARES. Each Option Document shall state
the number of Option Shares to which it pertains.
(b) OPTION PRICE. Each Option Document shall state the price at
which Option Shares may be purchased (the "Option Price"), which shall be at
least 100% of the fair market
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value of the Common Stock on the date the Option is granted. Fair market
value per share shall be the mean between the highest and lowest quoted
selling prices of the Common Stock on the American Stock Exchange on the day
the Option is granted, or if not traded on the day of grant, then on the most
recent preceding date on which trading occurred, as reported in customary
financial reporting services.
(c) MEDIUM OF PAYMENT. An Optionee shall pay for Option Shares
in cash or by certified check payable to the order of the Company.
(d) TERMINATION OF OPTIONS. No Option shall be exercisable
after the first to occur of the following:
(i) Expiration of the Option term specified in the Option
Document;
(ii) Expiration of three months from the date the Optionee's
employment or service with the Company or its Affiliates terminates for any
reason other than disability (within the meaning of section 22(e)(3) of the
Code), death or as specified in subsection 6(d)(iv) or (v), below;
(iii) Expiration of one year from the date the
Optionee's employment or service with the Company or its Affiliates terminates
due to the Optionee's disability (within the meaning of section 22(e)(3) of the
Code) or death;
(iv) The date set by the Board to be an accelerated
expiration date in the event of the occurrence of a transaction or series of
related transactions in which (A) the Company is dissolved or liquidated or
sells substantially all of its operating assets, (B) the Company is not the
surviving or acquiring entity or (C) the Company becomes an 80% or more owned
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subsidiary of another company, in which case the Board may take whatever other
action with respect to the Option, including acceleration of any exercise
provisions, it deems necessary or desirable; or
(v) A finding by the Board, after full consideration of the
facts presented on behalf of both the Company and the Optionee, that the
Optionee has breached his employment or service contract with the Company or an
Affiliate, or has been engaged in any sort of disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his employment or service or
has disclosed trade secrets or confidential information of the Company or an
Affiliate. In such event, in addition to immediate termination of the Option,
the Optionee, upon a determination by the Board, shall automatically forfeit all
Option Shares for which the Company has not yet delivered the share certificates
upon refund by the Company of the Option Price. Notwithstanding anything herein
to the contrary, the Company may withhold delivery of share certificates pending
the resolution of any inquiry that could lead to a finding resulting in a
forfeiture.
(e) TRANSFERS. No Option granted under the Plan may be
transferred except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an Option is granted, such Option may be
exercised only by him or his legal representative in the event of his
incompetence.
(f) OTHER PROVISIONS. The Option Documents shall contain such
other provisions including, without limitation, additional restrictions upon the
exercise of the Option or additional limitations upon the term of the Option, as
the Board shall deem advisable.
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(g) AMENDMENT. The Board shall have the right to amend Option
Documents issued to an Optionee, subject to his consent, except that the consent
of the Optionee shall not be required for any amendment made under
subsection 6(d)(iv).
7. EXERCISE. No Option shall be deemed to have been exercised prior
to the receipt by the Company of written notice of such exercise and of payment
in full of the Option Price for the Option Shares to be purchased. Each such
notice shall specify the number of Option Shares to be purchased and shall
(unless the Option Shares are covered by a then current registration statement
or a Notification under Regulation A under the Securities Act of 1933, as
amended (the "Act") and then current registrations under all applicable state
securities laws) contain the Optionee's acknowledgment in form and substance
satisfactory to the Company that (a) such Option Shares are being purchased for
investment and not for distribution or resale (other than a distribution or
resale which, in the opinion of counsel satisfactory to the Company, may be made
without violating the registration provisions of the Act and all applicable
state securities laws), (b) the Optionee has been advised and understands that
(i) the Option Shares have not been registered under the Act and are "restricted
securities" within the meaning of Rule 144 under the Act and are subject to
restrictions on transfer and (ii) the Company is under no obligation to register
the Option Shares under the Act or any applicable state securities laws or to
take any action which would make available to the Optionee any exemption from
such registrations, (c) such Option Shares may not be transferred without
compliance with all applicable federal and state securities laws and (d) an
appropriate legend referring to the foregoing restrictions on transfer and any
other restrictions imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the above, should the Company be advised by
counsel that issuance of shares should be delayed pending (A) registration under
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federal or state securities laws or (B) the receipt of an opinion that an
appropriate exemption therefrom is available, the Company may defer exercise of
any Option granted hereunder until either such event in (A) or (B) has occurred.
8. ADJUSTMENTS ON CHANGES IN CAPITALIZATION. The aggregate number
of shares and class of shares as to which Options may be granted hereunder, the
number of shares covered by each outstanding Option and the Option Price thereof
shall be appropriately adjusted in the event of a stock dividend, stock split,
recapitalization or other change in the number or class of issued and
outstanding equity securities of the Company resulting from a subdivision or
consolidation of the Common Stock and/or other outstanding equity security or a
recapitalization or other capital adjustment (not including the issuance of
Common Stock on the conversion of other securities of the Company which are
convertible into Common Stock) affecting the Common Stock which is effected
without receipt of consideration by the Company. The Board shall have authority
to determine the adjustments to be made under this Section and any such
determination by the Board shall be final, binding and conclusive.
9. AMENDMENT OF THE PLAN. The Board may amend the Plan from time to
time in such manner as it may deem advisable. No amendment to the Plan that
adversely affects any outstanding Option, however, shall be made without the
consent of the Optionee.
10. NO CONTINUED EMPLOYMENT. The grant of an Option pursuant to the
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of the Company or any Affiliate to retain the
Optionee in the employ of the Company or an Affiliate.
11. WITHHOLDING OF TAXES. Whenever the Company proposes or is
required to deliver or transfer Option Shares in connection with the exercise of
an Option, the Company shall
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have the right to (a) require the recipient to remit or otherwise make
available to the Company an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or transfer
of any certificate or certificates for such Option Shares or (b) take
whatever action it deems necessary to protect its interests with respect to
tax liabilities, including, without limitation, withholding a portion of any
Option Shares otherwise deliverable pursuant to the Plan. The Company's
obligation to make any delivery or transfer of Option Shares shall be
conditioned on the Optionee's compliance with any withholding requirement to
the Company's satisfaction.
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