Form of Stock Option Agreement
THIS OPTION HAS NOT BEEN REGISTERED UNDER STATE OR FEDERAL SECURITIES
LAWS. THIS OPTION MAY NOT BE TRANSFERRED EXCEPT BY WILL OR UNDER THE LAWS OF
DESCENT AND DISTRIBUTION.
CD RADIO INC.
1994 DIRECTORS' NONQUALIFIED STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into as of
the ____ day of ________ 199_ ("Date of Grant"), by and between CD Radio, Inc.,
a Delaware corporation (the "Company"), and ____________ (the "Optionee").
1. Grant of Option. Subject to the terms and conditions hereof and the
Company's 1994 Stock Option Plan (the "Plan"), the Company hereby grants to the
Optionee the right and option (the "Option") to purchase up to five thousand
(5,000) shares (the "Shares") of the common stock, $0.001 par value, of the
Company, at a price per share of $5.00 (the "Exercise Price"). This Option is
intended not to qualify as an Incentive Stock Option for purposes of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"). In the case of
any stock split, stock dividend or like change in the nature of shares granted
by this Agreement occurring after the date hereof, the number of shares and
option price shall be proportionately adjusted as set forth in Section 4(k) of
the Plan. [Initial Options: This Option shall vest and become fully exercisable
on the first anniversary of the Date of Grant./Annual Options: Annual Options
shall vest and become fully exercisable immediately upon the Date of Grant.]
2. Termination of Option. The Option shall terminate, to the extent not
previously exercised, ten (10) years from the Date of Grant or earlier in
accordance with Sections 4(e), 4(i) and 4(k) of the Plan. The unvested portion
of the Option shall terminate immediately upon the Optionee's termination of
employment for any reason whatsoever.
3. Non-transferable. This Option may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by the applicable laws of descent and distribution, and
shall not be subject to execution, attachment or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this
Option or of any right or privilege conferred hereby, contrary to the provisions
hereof, or upon the sale or levy or any attachment or similar process upon the
rights and privileges conferred hereby, this Option shall thereupon terminate
and become null and void.
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4. Investment Intent. By accepting the Option, the Optionee represents
and agrees for himself and all persons who acquire rights in the Option through
the Optionee, that none of the Shares purchased upon exercise of the Option will
be distributed in violation of applicable federal and state laws and
regulations. If requested by the Company, the Optionee shall furnish evidence
satisfactory to the Company (including a written and signed representation
letter and a consent to be bound by all transfer restrictions imposed by
applicable law, legend condition or otherwise) to that effect, prior to delivery
of the purchased Shares.
5. Exercise. Subject to Sections 1 and 2 hereof and the Plan, This
Option may be exercised in whole or in part by means of a written notice of
exercise signed and delivered by the Optionee (or, in the case of exercise after
death of the Optionee by the executor, administrator, heir or legatee of the
Optionee, as the case may be) to the Company at the address set forth herein for
notices to the Company. Such notice (a) shall state the number of Shares to be
purchased and the date of exercise, and (b) shall be accompanied by payment of
the full exercise price. Payment of the exercise price may be in cash, by
certified or cashier's check or a Director may pay for all or any portion of the
aggregate Option exercise price (i) by delivering to the Company shares of
Common Stock previously held by such Director or (ii) having shares withheld
from the amount of shares of Common Stock to be received by the Director.
6. Withholding. Prior to delivery of any Shares purchased upon exercise
of this Option, the Company shall determine the amount of any United States
federal and state income tax, if any, which is required to be withheld under
applicable law and shall, as a condition of exercise of this Option and delivery
of certificates representing the Shares purchased upon exercise of the Option,
collect from the Optionee the amount of any such tax to the extent not
previously withheld.
7. Rights of the Optionee. Neither this Option, the execution of this
Agreement nor the exercise of any portion of this Option shall confer upon the
Optionee any right to, or guarantee of, continued employment by the Company, or
in any way limit the right of the Company to terminate employment of the
Optionee at any time, subject to the terms of any employment agreements between
the Company and the Optionee.
8. Professional Advice. The acceptance and exercise of the Option may
have consequences under federal and state tax and securities laws which may vary
depending upon the individual circumstances of the Optionee. Accordingly, the
Optionee acknowledges that he has been advised to consult his personal legal and
tax advisor in connection with this Agreement and his dealings with respect to
the Option. Without limiting other matters to be considered, the Optionee should
consider whether
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upon exercise of the Option, the Optionee will file an election with the
Internal Revenue Service pursuant to Section 83(b) of the Code.
9. Agreement Subject to Plan. The Option and this Agreement are subject
to the terms and conditions set forth in the Plan and in any amendments to the
Plan existing now or in the future, which terms and conditions are incorporated
herein by reference. A copy of the Plan previously has been delivered to the
Optionee. Should any conflict exist between the provisions of the Plan and those
of this Agreement, those of the Plan shall govern and control. This Agreement
and the Plan comprise the entire understanding between the Company and the
Optionee with respect to the Option.
10. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to its
conflict of laws principles to the contrary, and shall bind and inure to the
benefit of the heirs, executors, personal representatives, successors and
assigns of the parties hereto.
11. Notices. Any notice required or permitted to be made or given
hereunder shall be mailed via certified or registered mail or delivered
personally to the addresses set forth below, or as changed from time to time by
written notice to the other:
Company: CD Radio Inc.
1800 Avenue of the Americas
New York, New York 10036
Attention: David Margolese
Optionee: _______________________
_______________________
_______________________
_______________________
Notices and other communications shall be deemed received and effective upon the
earlier of (i) hand delivery to the recipient, or (ii) give (5) days after being
mailed by
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certificate or registered mail, postage prepaid, return receipt requested.
Either party may, by notice in writing, direct that future notices or demands be
sent to a different address.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
CD RADIO INC.: OPTIONEE:
By: _________________________ _________________________
Its: _____________________ Name: ____________________