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Exhibit 10.40
[FORM OF OPTION GRANT NOT UNDER STOCK OPTION PLANS]
October , 1999
[Addressee]
Dear ___________:
This letter is to advise you that, in recognition of your prior
services, Spanish Broadcasting System, Inc. (the "Company") hereby grants you a
nonqualified stock option (the "Option") to purchase shares of the
Company's common stock, par value $.0001 (the "Shares") on the terms and
conditions set forth below.
1. EXERCISE PRICE. The exercise price shall be the price at which the
Shares are initially offered to the public (the "IPO") on the date hereof.
2. EXERCISABILITY. The Option shall be vested and exercisable on the
date the IPO is consummated, and shall remain exercisable for a term of 10 years
from the Date of Grant, provided that, if an IPO is not consummated on or before
the close of business on December 31, 1999, the Option shall expire and be null
and void.
3. FORM OF EXERCISE. You may exercise an Option in whole or in part at
any time after it becomes exercisable by delivering written notice of such
exercise to the Secretary of the Company of the number of Shares as to which the
Option is being exercised, and enclosing payment for the Shares with respect to
which the Option is being exercised. Such payment shall be in cash or by check,
or if approved by the Committee, by the delivery of Shares previously owned by
you, duly endorsed for transfer to the Company, with a Fair Market Value on the
date of delivery equal to the aggregate purchase price of the Shares with
respect to which the Option is being exercised, or pursuant to a "cashless
exercise," or any combination of the foregoing approved by the Committee, in its
sole discretion. Partial exercise shall be for whole Shares only and shall not
be for less than one hundred (100) Shares unless the number of Shares purchased
constitutes the total number of Shares then remaining subject to the Option or
the Committee permits such smaller exercise in its sole discretion.
4. NONTRANSFERABILITY. The Option shall not be transferable other than
by will or the laws of descent and distribution, and no transfer so effected
shall be effective to bind the Company unless the Company has been furnished
with written notice thereof and a copy of the will and/or such other evidence as
the Committee 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
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Option, provided, however, that, in the discretion of the Committee, Options
may be transferred pursuant to a Qualified Domestic Relations Order (within the
meaning of the Internal Revenue Code of 1986).
5. CONDITIONS TO ISSUANCE. (1) The Shares deliverable upon the exercise
of the Option, or any portion thereof, may be either previously authorized but
unissued Shares or issued Shares which have been reacquired by the Company. Such
Shares shall be fully paid and non-assessable. The stock certificates evidencing
the Shares shall bear such legends restricting transferability as the Committee
deems necessary or advisable. (2) The Company shall not be required to issue or
deliver any certificate or certificates for Shares deliverable upon any exercise
of the Option prior to fulfillment of all of the following conditions:
a. The completion of any registration or other qualification of
such Shares under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of
any other governmental regulatory body, or the obtaining of
approval or other clearance from any state or federal
governmental agency which the Committee shall, in its sole
discretion, deem necessary or advisable.
b. If, in its sole discretion, the Committee deems it necessary
or advisable, the execution by you of a written representation
and agreement, in a form satisfactory to the Committee, in
which you represent that the Shares acquired by you upon
exercise are being acquired for investment and not with a view
to distribution thereof.
6. RIGHTS AS STOCKHOLDER. You shall not be, nor have any of the rights
or privileges of, a stockholder of the Company in respect of any Shares
purchasable upon the exercise of the Option unless and until certificates
representing such Shares have been issued by the Company.
7. ADMINISTRATION. The Compensation Committee of the Company's Board of
Directors shall have the power to interpret this Agreement, and all actions
taken and all interpretations and determinations made by the Committee shall be
final and binding upon the Optionee, the Company, and all other interested
persons.
8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior agreements and understandings between the parties with respect to such
subject matter. Any term or provision of this Agreement may be waived at any
time by the party which is entitled to the benefits thereof, and any term or
provision of this Agreement may be amended or supplemented at any time by the
mutual consent of the parties hereto, except that any waiver of any term or
condition, or any amendment, of this Agreement must be in writing.
9. NOTICES. All notices or other communications made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or
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mailed by registered or certified mail, return receipt requested, to you at the
address noted above, and to the Company as set forth below or at such other
address as each may specify by notice to the others:
To the Company:
Spanish Broadcasting System, Inc.
319 Coral Way
Miami, Florida 33143
Attention: Joseph A. Garcia
Copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: William E. Wallace, Jr., Esq.
Please acknowledge your understanding of the terms of, and acceptance
of, the Option by signing the enclosed copy of this letter and returning it
pursuant to the above.
Sincerely,
SPANISH BROADCASTING SYSTEM, INC.
By:_____________________________
Name:
Title:
Understood & Accepted
By:______________________
[Name]