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EXHIBIT 4.3
PLAYBOY ENTERPRISES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement"), dated
___________ __, 199__, is made by and between PLAYBOY ENTERPRISES, INC., a
Delaware corporation (the "Company"), and _____________________, an employee of
the Company or a Subsidiary (the "Optionee"):
WHEREAS, the Company has established the 1995 Playboy Enterprises, Inc.
Stock Incentive Plan (the "Plan"); and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement, and which
shall control in the event of any inconsistency between this Agreement and the
Plan on any interpretation of this Agreement); and
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $.01 par value Class __ Common Stock; and
WHEREAS, the Stock Option Committee of the Company's Board of Directors (the
"Committee"), appointed to administer the Plan, has determined that it would be
in the best interest of the Company to grant the Non-Qualified Option provided
for herein to the Optionee as an inducement to enter into or remain in the
service of the Company or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Plan.
Section 1.1 - Change of Control
"Change of Control" shall mean the occurrence of any of the following
events: (i) except in a transaction described in clause (iii) below, Hugh M.
Hefner, Christie Hefner, the Hugh M. Hefner 1991 Trust (for so long as Hugh M.
Hefner and Christie Hefner are joint trustees or one of them is sole trustee
thereof), and the Hugh M. Hefner Foundation (for so long as Hugh M. Hefner and
Christie Hefner are joint trustees or one of them is sole trustee thereof)
cease collectively to own a majority of the total number of votes that may be
cast for the election of directors of the Company; or (ii) a sale of Playboy
magazine by the Company; or (iii) the liquidation or dissolution of the
Company, or any merger, consolidation or other reorganization involving the
Company unless (x) the merger, consolidation or other reorganization is
initiated by the Company, and (y) is one in which the stockholders of the
Company immediately prior to such reorganization become the majority
stockholders of a successor or ultimate parent corporation of the Company
resulting from such reorganization and (z) in connection with such event,
provision is made for an assumption of outstanding Options and rights or a
substitution thereof of a new Option or right in such successor or ultimate
parent of substantially equivalent value.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3 - Common Stock
"Common Stock" shall mean the Class B Common Stock, par value $.01 per
share, of the Company.
Section 1.4 - ERISA
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"ERISA" shall mean the Employment Retirement Income Security Act of 1974, as
amended.
Section 1.5 - Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.6 - Option
"Option" shall mean the non-qualified option to purchase Common Stock of the
Company granted under this Agreement.
Section 1.7 - Plan
"Plan" shall mean the 1995 Playboy Enterprises, Inc. Stock Incentive Plan.
Section 1.11 - Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended in the future.
Section 1.12 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.13 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.15 - Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company or a Subsidiary is terminated
for any reason, voluntarily or involuntarily, with or without Cause (as defined
below), including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement, but excluding any termination where
there is a simultaneous reemployment by the Company or a Subsidiary. The
Committee, subject to the definition of Cause below, shall determine the effect
of all other matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether particular
leaves of absence constitute Terminations of Employment. For purposes of the
Plan, "Cause" shall mean an Employee's (a) gross negligence in the performance
of the responsibilities of such
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Employee's office or position; (b) any act of dishonesty or moral turpitude
materially adversely affecting the Company or the Company's reputation; (c)
commission of any other willful or intentional act that could reasonably be
expected to injure materially the reputation, business or business
relationships of the Company or any Subsidiary; or (d) conviction of a felony
or of any crime involving moral turpitude, fraud or misrepresentation.
ARTICLE II
GRANT OF OPTION
Section 2.1 - Grant of Option
For good and valuable consideration and subject to the vesting provisions
hereof, on the date hereof the Company irrevocably grants to the Optionee the
option to purchase any part or all of an aggregate of ________ shares of its
$.01 par value Class B Common Stock upon the terms and conditions set forth in
this Agreement.
Section 2.2 - Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$_____ per share without commission or other charge, which was not less than
100% of the fair market value of such shares at the end of the business day
immediately preceding the day such Option was granted, as determined pursuant
to the Plan.
Section 2.3 - No Right to Continued Employment
Nothing in this Agreement or in the Plan shall confer upon the Optionee any
right to continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to discharge the Optionee at
any time for any reason whatsoever, with or without cause.
Section 2.4 - Adjustments in Option
In the event that the outstanding shares of the Common Stock subject to the
Option are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company by reason of a
recapitalization, reclassification, stock split, stock dividend or combination
of shares or similar transaction, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which the Option,
or portions thereof then unexercised, shall be exercisable, to the end that
after such event the Optionee's proportionate interest shall be maintained.
Such adjustment in the Option shall be
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made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary
corresponding adjustment in the Option price per share. Any such adjustment
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) Subject to Sections 3.3, 3.4 and 5.6, the Option shall become
exercisable in four (4) cumulative installments as follows:
(i) The first installment shall consist of one-fourth (1/4th) of the
shares covered by the Option and shall become exercisable on the first
anniversary of the date the Option is granted.
(ii) The second installment shall consist of one-fourth (1/4th) of the
shares covered by the Option and shall become exercisable on the second
anniversary of the date the Option is granted.
(iii) The third installment shall consist of one-fourth (1/4th) of the
shares covered by the Option and shall become exercisable on the third
anniversary of the date the Option is granted.
(iv) The fourth installment shall consist of one-fourth (1/4th) of the
shares covered by the Option and shall become exercisable on the fourth
anniversary of the date the Option is granted.
(b) Except as provided in Section 3.4, no portion of the Option which is
unexercisable at Termination of Employment shall thereafter become exercisable.
Section 3.2 - Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
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Section 3.3 - Expiration of Option
Each Option may be exercised any time until the first of the following
events, after which such Option will become unexercisable:
(a) The expiration of ten (10) years from the date the Option was granted
if the Employee is still employed by the Company or any Subsidiary; or
(b) The expiration of three (3) months from the Employee's Termination of
Employment if such Termination of Employment results from such Employee's
retirement, or such Employee's being discharged not for Cause, unless the
Employee dies within said three-month period; or
(c) The effective date of (i) a Termination of Employment for Cause, (ii)
the Employee's resignation, or (iii) a Change of Control specified in clause
(iii) of the definition of such term; or
(d) In the case of an Optionee who is disabled (within the meaning of
Section 22(e)(3) of the Code), the expiration of one (1) year from the date of
the Optionee's Termination of Employment; provided, however, that this
subsection (d) shall not apply if the Optionee dies within said one-year
period; or
(e) One (1) year from the date of the Optionee's death.
Section 3.4 - Acceleration of Exercisability
If an Optionee is terminated without Cause less than one (1) year after a
Change of Control specified in clause (i) or (ii) of the definition thereof,
unless the terms of any Option specifically exclude such right, the Optionee
shall have the right to exercise such Optionee's Option until expiration
thereof pursuant to Section 4.3(a)(ii) with respect to all vested installments
of such Option, and with respect to the next installment (if any) of such
Option that was unvested on the date of such Termination of Employment.
Not less than ninety (90) days prior to the effective date of any Change of
Control specified in clause (iii) of the definition of such term, the Committee
shall give the Employee notice of such event if the Option has then neither
been fully exercised nor become unexercisable under Section 4.3, and shall
specify in such notice a date prior to the effective date of such event when
this Option shall be exercisable with respect to all vested installments
thereof, and with respect to the next installment (if any) of such Option that
is unvested on the date of such Change of Control.
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ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
(a) Subject to Section 4.1(b), during the lifetime of the Optionee, only
such Optionee (or the spouse or former spouse of such Optionee following
transfer of the Option pursuant to a qualified domestic relations order as
defined by the Code or Title I of ERISA, or the rules thereunder) may exercise
the Option (or any portion thereof) granted to such Optionee. After the death
of the Optionee, any exercisable portion of the Option may, within the time
frame allowed, be exercised by his personal representative or by any person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution. To the extent Rule 16b-3 as then
in effect permits transfers of Options other than as provided in this Section
4.1(a), the Committee may by resolution amend this Section 4.1(a) to reflect
such other transfer limitation requirements, in the Committee's discretion.
(b) Should the Optionee be determined under applicable law to have become a
disabled person or the equivalent thereof, the Option may, prior to the time
when the Option becomes unexercisable under the Plan or this Agreement, be
exercised by the Optionee's guardian or by any other person empowered to do so
under applicable laws of guardianship. For purposes of this Section 4.1(b),
"disabled persons" shall mean a person who (i) because of mental deterioration
or physical incapacity is not fully able to manage such person's person or
estate or (ii) is mentally ill and who because of such person's mental illness
is not fully able to manage such person's person or estate.
Section 4.2 - Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or such lesser number of shares as shall then be the
subject of unexercised, vested installments) and shall be for whole shares
only.
Section 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, must be exercised by
delivery of all of the following to the Secretary of the Company or the
Secretary's office prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:
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(a) A written notice signed by the Optionee (or the other person then
entitled to exercise the Option or portion), stating that such Option or
portion thereof is being exercised and such notice complies with all applicable
rules established by the Committee; and
(b) Payment in full for the exercised shares:
(i) In cash or by certified or cashier's check for the shares
with respect to which such Option or portion is exercised; or
(ii) (A) Shares of the same class of the Company's Common Stock
owned by the Optionee duly endorsed for transfer to the Company or (B)
subject to the timing requirements of Section 4.4, shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option, with a
fair market value on the date of Option exercise equal to the aggregate
purchase price of the shares with respect to which such Option or portion is
exercised; or
(iii) With the consent of the Committee and at the
sole discretion of the Company, by a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Committee. The Committee may
also prescribe the form of such note and the security to be given for such
note. No Option may, however, be exercised by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension of
credit is prohibited by law; or
(iv) Any combination of the consideration provided in the
foregoing subparagraphs (i), (ii) and (iii); or
(v) To the extent permitted by law (including then existing
interpretations of Rule 16b-3) a "cashless exercise procedure" satisfactory
to the Committee which permits the Optionee to deliver an exercise notice to
a broker-dealer, who then sells the Option shares, delivers the exercise
price to the Company and delivers the excess funds less commission to the
Optionee; and
(c) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute discretion,
also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates
and issuing stop-transfer orders to transfer agents and registrars; and
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(d) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option; and
(e) Full payment to the Company of all amounts which, under federal, state
or local tax law, it is required to withhold upon exercise of the Option. With
the consent of the Committee, (i) shares of the Company's Common Stock owned by
the Optionee duly endorsed for transfer or (ii) subject to the timing
requirements of Section 4.4, shares of the Company's Common Stock issuable to
the Optionee upon exercise of the Option, valued in accordance with Section
4.1(b) of the Plan at the date of Option exercise, may be used to make all or
part of such payment.
Section 4.4 - Certain Timing Requirements
At the discretion of the Committee shares of Common Stock issuable to the
Optionee upon exercise of the Option may be used to satisfy the Option exercise
price or the tax withholding consequences of such exercise, in the case of
persons subject to Section 16 of the Exchange Act and to the extent such
limitation is required by Rule 16b-3, as then in effect, only (i) during the
period beginning on the third business day following the date of release of the
quarterly or annual summary statement of sales and earnings of the Company and
ending on the twelfth business day following such date or (ii) pursuant to an
irrevocable written election by the Optionee to use shares of Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes made at least six months prior to the
payment of such Option price or withholding taxes.
Section 4.5 - Conditions to Issuance of Stock Certificates
The shares of Common Stock issuable and deliverable upon the exercise of the
Option, or any portion thereof, shall be fully paid and non-assessable. In
addition to the requirements of Sections 4.3 and 4.4, the Company shall not be
required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of the Option or portion thereof 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, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(b) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
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(c) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
Section 4.6 - Rights as Stockholder
The holder of the Option 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 any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder or the Company's stock record books reflect the Optionee as a
stockholder pursuant to any book entry procedure approved by the Secretary.
ARTICLE V
OTHER PROVISIONS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent herewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under this Plan except with respect to matters which
under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules
issued thereunder, are required to be determined in the sole discretion of the
Committee. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or the Option.
Section 5.2 - Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee or such
Optionee's respective successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other legal
or equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that
nothing in this Section 5.2 shall prevent transfers by will or by the
applicable laws of descent and distribution or pursuant to a qualified
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domestic relations order as defined by the Code or Title I of ERISA, or the
rules thereunder, or as permitted by Section 4.1.
Section 5.3 - Amendment, Suspension or Termination of Plan; Modification of
Options
An Option shall be subject in all events to the condition that, if at any
time, the Board shall determine, in its discretion, that the listing,
registration, or qualification of any of the Company's securities upon any
securities exchange or under any law, regulation or other requirement of any
governmental authority is necessary or desirable, or that any consent or
approval from any governmental authority is necessary or desirable, then the
Board may modify the terms of the Option granted under this Agreement, without
the consent of the Employee, in any manner which the Board deems necessary or
desirable in order to improve the Company's ability to obtain such listing,
registration, qualification, consent or approval.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement will be by
registered mail, return receipt requested and if to the Company shall be
addressed in care of its Secretary at 680 N. Lake Shore Drive, Chicago,
Illinois 60611, and if to the Optionee, shall be addressed to the Optionee at
the address given beneath the Optionee's signature hereto. By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different
address for notices to be given to such Optionee. Any notice which is required
to be given to the Optionee shall, if the Optionee is then deceased, be given
to the Optionee's personal representative if such representative has previously
informed the Company of the Optionee's status and address by written notice
under this Section 5.4. Any notice shall be deemed duly given when delivered
or, except in connection with notice of exercise under Section 4.3, at such
time as delivery is attempted.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6 - Stockholder Approval
The Plan will be submitted for approval by the Company's stockholders within
twelve (12) months after the date the Plan was initially adopted by the Board.
This Option may not be exercised to any extent by anyone prior to the time when
the Plan is approved by the stockholders, and if such approval has not been
obtained by the end of said twelve-month period, this Option shall thereupon be
cancelled and become null and void.
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Section 5.7 - Construction
The laws of the State of Delaware shall govern the interpretation, validity,
administration, enforcement and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
PLAYBOY ENTERPRISES, INC.
By _________________________________
Authorized Representative
680 N. Lake Shore Drive
Chicago, Illinois 60611
____________________________
Optionee
____________________________
____________________________
Address
Optionee's Taxpayer
Identification Number:
____________________________
Date of Grant:____________________
Amount of Shares Available Under Option: __________________
Exercise Price:___________________
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