1992 STOCK OPTION PLAN
of
UNITEL VIDEO, INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is designed to
provide an incentive to key employees (including officers and directors who are
key employees) and to directors who are not employees of Unitel Video, Inc., a
Delaware corporation (the "Company"), and its present and future subsidiary
corporations, as defined in Paragraph 18 ("Subsidiaries"), and to offer an
additional inducement in obtaining the services of such individuals. The Plan
provides for the grant of "incentive stock options" ("ISOs") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and nonqualified stock options ("NQSOs"), but the Company makes no warranty as
to the qualification of any option as an "incentive stock option" under the
Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12,
the aggregate number of shares of Common Stock, $.01 par value per share, of the
Company ("Common Stock") for which options may be granted under the Plan shall
not exceed 350,000. Such shares of Common Stock may, in the discretion of the
Committee (as defined in Paragraph 3), consist either in whole or in part of
authorized but unissued shares of Common Stock or shares of Common Stock held in
the treasury of the Company. The Company shall at all times during the term of
the Plan reserve and keep available such number of shares of Common Stock as
will be sufficient to satisfy the requirements of the Plan. Subject to the
provisions of Paragraph 13, any shares of Common Stock subject to an option
which for any reason expires, is cancelled, is terminated unexercised or which
ceases for any reason to be exercisable shall again become available for the
granting of options under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Company's Board of Directors which, to the extent that it may determine, may
delegate its powers with respect to the administration of the Plan to a
committee of the Board of Directors of the Company (the "Committee") 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 (the "Exchange
Act"). References in the Plan to determinations or actions by the Committee
shall be deemed to include determinations and actions by the Board of Directors.
Subject to the express provisions of the Plan, the Committee shall have the
authority, in its sole discretion, with respect to Key Employee Options (as
defined in Paragraph 18): to determine the key employees who shall receive
options; the times when they shall receive options; whether an option shall be
an ISO or a NQSO; the number of shares of Common Stock to be subject to each
option; the term of each option; the date each option shall become exercisable;
whether an
option shall be exercisable in whole, in part or in installments, and, if in
installments, the number of shares of Common Stock to be subject to each
installment; whether the installments shall be cumulative; the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any installment; whether shares of Common
Stock may be issued on exercise of an option as partly paid, and, if so, the
dates when future installments of the exercise price shall become due and the
amounts of such installments; the exercise price of each option; the form of
payment of the exercise price; whether to restrict the sale or other disposition
of the shares of Common Stock acquired upon the exercise of an option and to
waive any such restriction; whether to subject the exercise of all or any
portion of an option to the fulfillment of contingencies as specified in the
contract referred to in Paragraph 11 (the "Contract"), including without
limitation, contingencies relating to entering into a covenant not to compete
with the Company and its Parent (as defined in Paragraph 18) and Subsidiaries,
financial objectives for the Company, a Subsidiary, a division, a product line
or other category, and/or the period of continued employment of the optionee
with the Company or its Subsidiaries, and to determine whether such
contingencies have been met; and with respect to Key Employee Options and
Outside Director Options (as defined in Paragraph 18): to construe the
respective Contracts and the Plan; to determine the amount, if any, necessary to
satisfy the Company's obligation to withhold taxes; with the consent of the
optionee, to cancel or modify an option, provided such option as modified would
be permitted to be granted on such date under the terms of the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; and to
make all other determinations necessary or advisable for administering the Plan.
The determinations of the Committee on the matters referred to in this Paragraph
3 shall be conclusive.
No member or former member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any option
granted hereunder.
4. ELIGIBILITY; GRANTS. The Committee may, consistent with the purposes of
the Plan, grant Key Employee Options from time to time, to key employees of the
Company or any of its Subsidiaries. Key Employee Options granted shall cover
such number of shares of Common Stock as the Committee may determine; provided,
however, that the aggregate fair market value (determined at the time the option
is granted) of the shares of Common Stock for which any eligible person may be
granted ISOs under the Plan or any other plan of the Company, or of a Parent or
a Subsidiary of the Company, which are exercisable for the first time by such
optionee during any calendar year shall not exceed $100,000. The $100,000 ISO
limitation shall be applied by taking ISOs into account in the order in which
they were granted. Any option (or the portion thereof) granted in excess of such
amount shall be treated as a NQSO.
On the date the Plan is adopted by the Board of Directors, each member of
the Board of Directors who is not on such date an employee of the Company or any
of its Subsidiaries shall be granted an Outside Director Option to purchase
1,000 shares of Common Stock. In addition, on each anniversary of the date the
Plan is adopted by the Board of Directors, each member of the Board of Directors
who is not on that anniversary date an employee of the Company or any of its
Subsidiaries shall be granted an Outside Director Option to purchase 3,000
shares of Common Stock. In the event the remaining shares available for grant
under the Plan are not sufficient to grant the
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Outside Director Options to such non-employee directors in any year, the number
of shares subject to each Outside Director Option for such year shall be reduced
proportionately. The Committee shall have no discretion with respect to the
selection of directors to receive Outside Director Options or the amount, the
price or the timing with respect thereto. A director who is not an employee of
the Company or any of its Subsidiaries shall not be entitled to receive any
options other than Outside Director Options as provided herein.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock under
each Key Employee Option shall be determined by the Committee; provided,
however, that the exercise price shall not be less than the fair market value of
the Common Stock subject to such option on the date of grant; and further,
provided, that if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, of
any of its Subsidiaries or of a Parent, the exercise price of such ISO shall not
be less than 110% of the fair market value of the Common Stock subject to such
ISO on the date of grant. The exercise price of the shares of Common Stock under
each Outside Director Option shall be equal to the fair market value of the
Common Stock subject to such option on the date of grant.
The fair market value of the Common Stock on any day shall be (a) if the
principal market for the Common Stock is a national securities exchange, the
average of the highest and lowest sales prices of the Common Stock on such day
as reported by such exchange or on a composite tape reflecting transactions on
such exchange, (b) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is quoted on the National
Association of Securities Dealers Automated Quotations System ("NASDAQ"), and
(i) if actual sales price information is available with respect to the Common
Stock, the average of the highest and lowest sales prices of the Common Stock on
such day on NASDAQ, or (ii) if such information is not available, the average of
the highest bid and lowest asked prices for the Common Stock on such day on
NASDAQ, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on NASDAQ, the average of
the highest bid and lowest asked prices for the Common Stock on such day as
reported on the NASDAQ OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided, however, that if clauses
(a), (b) and (c) of this Paragraph are all inapplicable, or if no trades have
been made or no quotes are available for such day, the fair market value of the
Common Stock shall be determined by the Committee by any method consistent with
applicable regulations adopted by the Treasury Department relating to stock
options. The determination of the Committee shall be conclusive in determining
the fair market value of the stock.
6. TERM. The term of each Key Employee Option shall be such term as is
established by the Committee, in its sole discretion, at or before the time such
option is granted. Notwithstanding the foregoing, the term of each ISO granted
pursuant to the Plan shall be for a period not exceeding 10 years from the date
of grant thereof, and further provided, that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company,
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of any of its Subsidiaries or of a Parent, the term of the ISO shall be for a
period not exceeding five years from the date of grant. Each Outside Director
Option shall have a term of ten years commencing on the date of grant. Options
shall be subject to earlier termination as hereinafter provided.
7. EXERCISE. An option (or any part or installment thereof), to the extent
then exercisable, shall be exercised by giving written notice to the Company at
its principal office (at present 555 West 57th Street, New York, New York 10019,
Attn: Barry Knepper, Executive Vice President), stating which ISO, NQSO or
Outside Director Option is being exercised, specifying the number of shares of
Common Stock as to which such option is being exercised and accompanied by
payment in full of the aggregate exercise price therefor (or the amount due on
exercise if the Contract permits installment payments) (a) in cash or by
certified check, or (b) with the consent of the Committee (in the Contract or
otherwise), with previously acquired shares of Common Stock having an aggregate
fair market value, on the date of exercise, equal to the aggregate exercise
price of all options being exercised, or with any combination of cash, certified
check or shares of Common Stock.
A person entitled to receive Common Stock upon the exercise of an option
shall not have the rights of a stockholder with respect to such shares of Common
Stock until the date of issuance of a stock certificate to him for such shares;
provided, however, that until such stock certificate is issued, any option
holder using previously acquired shares of Common Stock in payment of an option
exercise price shall continue to have the rights of a stockholder with respect
to such previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or issued
under the Plan.
8. TERMINATION OF RELATIONSHIP WITH COMPANY. Any holder of a Key Employee
Option whose employment with the Company (and its Parent and Subsidiaries), and
any holder of an Outside Director Option whose status as a director of the
Company, has terminated for any reason other than his death or Disability (as
defined in Paragraph 18) may exercise such option, to the extent exercisable on
the date of such termination, at any time within three months after the date of
termination, but not thereafter and in no event after the date the option would
otherwise have expired; provided, however, that if his employment or status as a
director shall be terminated either (a) for cause, or (b) without the consent of
the Company, said option shall terminate immediately. Key Employee Options
granted under the Plan shall not be affected by any change in the status of the
holder so long as he continues to be a full-time employee of the Company, its
Parent or any of the Subsidiaries (regardless of having been transferred from
one corporation to another).
Nothing in the Plan or in any option granted under the Plan shall confer on
any individual any right to continue in the employ of the Company, its Parent or
any of its Subsidiaries, or as a director of the Company, or interfere in any
way with the right of the Company, its Parent or
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any of its Subsidiaries to terminate the employee's employment at any time for
any reason whatsoever without liability to the Company, its Parent or any of its
Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies (a) while he is
employed by the Company, its Parent or any of its Subsidiaries, or while he is a
director of the Company, (b) within three months after the termination of such
relationship (unless such termination was for cause or without the consent of
the Company) or (c) within one year following the termination of such
relationship by reason of Disability, the Key Employee Options and Outside
Director Options, respectively, may be exercised, to the extent exercisable on
the date of his death, by his executor, administrator or other person at the
time entitled by law to his rights under such option, at any time within one
year after death, but not thereafter and in no event after the date the option
would otherwise have expired.
Any optionee whose employment or status as a director has terminated by
reason of Disability may exercise his Key Employee Options and Outside Director
Options, respectively, to the extent they are exercisable upon the effective
date of such termination, at any time within one year after such date, but not
thereafter and in no event after the date the option would otherwise have
expired.
10. COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in its
discretion, among other things, as a condition to the exercise of any option
that either (a) a Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares of Common Stock to be
issued upon such exercise shall be effective and current at the time of
exercise, or (b) there is an exemption from registration under the Securities
Act for the issuance of shares of Common Stock upon such exercise. Nothing
herein shall be construed as requiring the Company to register shares subject to
any option under the Securities Act.
The Committee may require the optionee to execute and deliver to the
Company his representation and warranty, in form and substance satisfactory to
it, that the shares of Common Stock to be issued upon the exercise of the option
are being acquired by the optionee for his own account, for investment only and
not with a view to the resale or distribution thereof. In addition, the
Committee may require the optionee to represent and warrant in writing that any
subsequent resale or distribution of shares of Common Stock by such optionee
will be made only pursuant to (i) a Registration Statement under the Securities
Act which is effective and current with respect to the shares of Common Stock
being sold, or (ii) a specific exemption from the registration requirements of
the Securities Act, but in claiming such exemption, the optionee shall, at the
request of the Committee and prior to any offer of sale or sale of such shares
of Common Stock, provide the Company with a favorable written opinion of
counsel, in form and substance satisfactory to the Company, as to the
applicability of such exemption to the proposed sale or distribution.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee, and shall contain such terms and conditions not inconsistent herewith
as may be determined by the Committee.
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12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Not withstanding any other
provisions of the Plan, in the event of any change in the outstanding Common
Stock by reason of a stock dividend, recapitalization, merger or reorganization,
split-up, combination or exchange of shares or the like, (a) the aggregate
number and kind of shares subject to the Plan, (b) the aggregate number and kind
of shares subject to each outstanding option and the exercise price thereof and
(c) the aggregate number and kind of shares to be granted pursuant to Paragraph
4 to directors who are not employees of the Company shall each be appropriately
adjusted by the Committee, whose determination shall be conclusive.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the
Board of Directors of the Company on May 1, 1992. No option may be granted under
the Plan after April 30, 2002. The Board of Directors, without further approval
of the Company's stockholders, may at any time and from time to time suspend or
terminate the Plan, in whole or in part, or amend it from time to time in such
respects as it may deem advisable, including without limitation, in order that
ISOs granted hereunder meet the requirements for "incentive stock options" under
the Code, to comply with applicable requirements of the Securities Act and the
Exchange Act, or to conform to any change in applicable law or to regulations or
rulings of administrative agencies; provided, however, that no amendment shall
be effective without the requisite prior or subsequent stockholder approval
which would (a) except as contemplated in Paragraph 12, increase the maximum
number of shares of Common Stock for which options may be granted under the
Plan, (b) materially increase the benefits to participants under the Plan or (c)
change the eligibility requirements for individuals entitled to receive options
hereunder. Notwithstanding the foregoing, the provisions regarding the selection
of directors for participation in, and the amount, the price or the timing of,
Outside Director Options shall not be amended more than once every six months,
other than to comport with changes in the Code, the Employee Retirement Income
Security Act or the rules thereunder. No termination, suspension or amendment of
the Plan shall, without the consent of the holder of an existing option affected
thereby, adversely affect his rights under such option. The power of the
Committee to construe and administer any options granted under the Plan prior to
the termination or suspension of the Plan nevertheless shall continue after such
termination or during such suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan shall
be transferable otherwise than by will or the laws of descent and distribution,
and options may be exercised, during the lifetime of the holder thereof, only by
him or his legal representatives. Except to the extent provided above, options
may not be assigned, transferred, pledged, hypothecated or disposed of in any
way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.
15. WITHHOLDING TAXES. The Company may withhold cash and/or shares of
Common Stock to be issued to the optionee having an aggregate fair market value
equal to the amount which it determines is necessary to satisfy its obligation
to withhold Federal, state and local income taxes or other taxes incurred by
reason of the grant or exercise of an option, its disposition, or the
disposition of the underlying shares of Common Stock. Alternatively, the Company
may
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require the holder to pay to the Company such amount, in cash, promptly upon
demand. The Company shall not be required to issue any shares of Common Stock
pursuant to any such option until all required payments have been made. Fair
market value of the shares of Common Stock shall be determined in accordance
with Paragraph 5.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend or
legends upon the certificates for shares of Common Stock issued upon exercise of
an option under the Plan and may issue such "stop transfer" instructions to its
transfer agent in respect of such shares as it determines, in its discretion, to
be necessary or appropriate to (a) prevent a violation of, or to perfect an
exemption from, the registration requirements of the Securities Act, (b)
implement the provisions of the Plan or any agreement between the Company and
the optionee with respect to such shares of Common Stock, or (c) permit the
Company to determine the occurrence of a "disqualifying disposition," as
described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.
17. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the
Committee may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
18) or assume the prior options of such Constituent Corporation.
18. DEFINITIONS.
a. Subsidiary. The term "Subsidiary" shall have the same definition as
"subsidiary corporation" in Section 424(f) of the Code.
b. Parent. The term "Parent" shall have the same definition as "parent
corporation" in Section 424(e) of the Code.
c. Constituent Corporation. The term "Constituent Corporation" shall mean
any corporation which engages with the Company, its Parent or any Subsidiary in
a transaction to which Section 424(a) of the Code applies (or would apply if the
option assumed or substituted were an ISO), or any Parent or any Subsidiary of
such corporation.
d. Disability. The term "Disability" shall mean a permanent and total
disability within the meaning of Section 22(e)(3) of the Code.
e. Key Employee Option. The term "Key Employee Option" shall mean an option
granted pursuant to the Plan to a person who, at the time of grant, is a key
employee of the Company or a Subsidiary of the Company.
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f. Outside Director Option. The term "Outside Director Option" shall mean a
NQSO granted pursuant to the Plan to a person who, at the time of grant, is a
director of the Company but is not an employee of the Company or any of its
Subsidiaries.
19. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a
majority of the votes present in person or by proxy at the next meeting of its
stockholders at which a quorum is present. No options granted hereunder may be
exercised prior to such approval, provided that the date of grant of any options
granted hereunder shall be determined as if the Plan had not been subject to
such approval. Notwithstanding the foregoing, if the Plan is not approved by a
vote of the stockholders of the Company on or before May 1, 1993, the Plan and
any options granted hereunder shall terminate.
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