NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE AMERICAN STUDIOS, INC.
EQUITY COMPENSATION PLAN
THIS AWARD AGREEMENT is entered into effective as of the 1st day of
November, 1995 (the "Effective Date"), by and between AMERICAN STUDIOS, INC., a
North Carolina corporation (the "Company"), and R. KENT SMITH (the "Optionee").
WHEREAS, the Optionee is a valuable and trusted employee of the
Company; and
WHEREAS, the Committee considers it desirable and in the best interests
of the Company that the Optionee be given an opportunity to acquire a
proprietary interest in the Company as an incentive to advance the interests of
the Company and in recognition of the Optionee's prior contribution to the
Company; and
WHEREAS, the Committee desires to grant the Optionee a nonqualified
stock option to purchase shares of the common stock of the Company (the
"Stock"), in accordance with the American Studios, Inc. Equity Compensation Plan
(the "Plan") adopted by the Company effective as of February 7, 1995
(capitalized terms used herein which are not otherwise defined herein shall have
the meanings ascribed to them under the Plan); and
WHEREAS, this Award Agreement memorializes the grant of a nonqualified
stock option to Optionee that was made on November 1, 1995 (the "Option Grant
Date").
NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties as follows:
1. Grant of Nonqualified Stock Option. The Company hereby grants to the
Optionee on the Option Grant Date a nonqualified stock option (the "Option") to
purchase 31,000 shares of Stock (the "Shares") at the purchase price of $1.375
per share in the manner and subject to the terms and conditions hereinafter
provided.
2. Time of Exercise of Option. The Option shall become exercisable in
full beginning February 1, 1996, and, subject to the termination provisions set
forth in Section 5 below, to the extent the Option has become exercisable, it
may be exercised, in whole or in part, at any time and from time to time but not
later than November 1, 2005 (the "Exercise Period").
3. Method of Exercise. The Option shall be exercised by written notice
directed to the Committee, a form of which is attached hereto as Exhibit A and
incorporated herein by reference, accompanied by payment, in cash or by
certified check payable to the order of the Company, of the price specified in
Section 1 above for the number of Shares specified in the notice. As soon as
practicable following receipt of such notice from the Optionee, the Committee
shall notify the Optionee of any payment or other allocation required under
Section 4 below. Upon notice from the Committee that the Optionee has paid the
price specified in Section 1 above and paid or made any allocation
required under Section 4 below, the Company shall make immediate delivery of
such Shares; provided that if any law or regulation requires the Company to take
any action with respect to the Shares specified in such notice before the
issuance thereof, then the date of delivery of such Shares shall be extended for
the period necessary to take such action.
4. Payment to Satisfy Withholding Obligations. Notwithstanding any
other provision of this Award Agreement, any rights of the Optionee to exercise
the Option shall be conditioned upon the Optionee forwarding to the Company, in
addition to the price per share specified in Section 1 above, cash payment of an
amount equal to the amount the Company is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with such exercise of the Option, if any, as determined
by the Committee in its discretion. The amount of such payment shall be
communicated to the Optionee by the Committee as soon as practicable following
the Committee's receipt of the notice specified in Section 3. In lieu of payment
specified in this Section 4, the Committee may in its discretion agree with the
Optionee to another means of satisfying the Company's withholding obligation in
connection with the exercise of the Option.
5. Termination of Option. Except as otherwise stated herein, the Option
shall terminate and cease to be exercisable upon the first to occur of the
following:
(a) the date all Shares available for purchase under this
Award Agreement have been so purchased; or
(b) upon the expiration of the Exercise Period set forth in
Section 2 above.
6. Rights Prior to Exercise of Option. The Optionee shall have no
rights as a shareholder with respect to the Shares except to the extent he has
exercised the Option, paid the Option price for such Shares, and received
delivery of such Shares as herein provided.
7. Non-Transferable. During the Optionee's lifetime, the Option shall
be exercisable only by him and neither it nor any right thereunder shall be
transferable except by will or laws of descent and distribution (and shall be
exercisable by such transferee only as provided in Sections 2 and 5 above), or
be subject to attachment, execution or other similar process. In the event of
any attempt by the Optionee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option or any right hereunder, except as provided for
herein, or in the event of the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Committee may
terminate the Option by notice to the Optionee, and the Option shall thereupon
become null and void.
8. Binding Effect. This Award Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
9. Gender and Number. All terms used in this Award Agreement shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
context may require.
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10. Terms and Conditions of Plan. The terms and conditions included in
the Plan are incorporated by reference herein, and to the extent that any
conflict may exist between any term or provision of this Award Agreement and any
term or provision of the Plan as in effect from time to time, such term or
provision of the Plan shall control.
11. Additional Terms or Conditions. The additional terms and conditions
as set forth on the following riders attached hereto are incorporated herein and
made a part of this Award Agreement as if set forth herein: None .
12. Entire Agreement. This Award Agreement (including the Plan which is
incorporated herein by reference and all additional riders incorporated pursuant
to Section 11 above) sets forth all of the promises, agreements, conditions,
understandings, warranties and representations between the parties hereto with
respect to the Option and the Shares, and there are no promises, agreements,
conditions, understandings, warranties or representations, oral or written,
express or implied, between them with respect to the Option or the Shares other
than as set forth therein or herein. This Award Agreement supersedes and
replaces any and all prior agreements between the parties hereto with respect to
the Option or the Shares. This Award Agreement is, and is intended by the
parties to be, an integration of any and all prior agreements or understandings,
oral or written, with respect to the Option and the Shares.
13. Invalid or Unenforceable Provision. The invalidity or
unenforceability of any particular provision of this Award Agreement shall not
affect the other provisions hereof, and this Award Agreement shall be construed
in all respects as if such invalid or unenforceable provision were omitted.
14. Governing Law. This Award Agreement shall be construed and enforced
in accordance with the laws of North Carolina.
15. Miscellaneous.
(a) Neither the granting of the Option, the exercise thereof
nor any other provision of this Award Agreement shall be construed as conferring
upon the Optionee any right to continue in the employment of the Company, or as
interfering with or restricting in any way the right of such corporations to
terminate such employment at any time.
(b) The Company, the Committee and any employees or agents
thereof are relieved from any liability for the non-issuance or non-transfer, or
any delay in the issuance or transfer, of any of the Shares which results from
the inability of the Company to obtain, or in any delay in obtaining, from each
regulatory body having jurisdiction all requisite authority to issue or transfer
the Stock of the Company in satisfaction of the Option if counsel for the
Company deems such authorization necessary for the lawful issuance or transfer
of any such Shares.
(c) The Optionee represents and warrants that no Shares
acquired by exercise of the Option shall be sold or otherwise disposed of in
violation of any federal or state securities law or
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regulation. Certificates evidencing the Shares issuable upon exercise of the
Option may contain a legend regarding resale limitations, including the
requirement that the Optionee deliver an opinion of counsel to the Company.
(d) The Option shall be exercised in accordance with the terms
of the Plan and such administrative regulations as the Committee may from time
to time adopt. All decisions of the Committee with respect to the
interpretation, construction and application of the Plan and/or this Award
Agreement shall be conclusive and binding upon the Optionee and all other
persons.
(e) The Committee shall be entitled to amend this Award
Agreement at any time provided that the Award Agreement, as amended, is
consistent with the provisions of the Plan.
(f) The Optionee represents, warrants and covenants that he
has not relied upon the Committee, the Company, or an employee or agent of the
Company with respect to any tax consequences related to the grant or exercise of
the Option, or the disposition of Shares purchased pursuant to exercise of the
Option. The Optionee acknowledges that, as a result of the grant and/or exercise
of the Option, the Optionee may incur substantial tax liability. The Optionee
assumes full responsibility for all such consequences and the filing of all tax
returns and elections the Optionee may be required to or find desirable to file
in connection therewith. In the event any valuation of the Option or Shares
purchased pursuant to its exercise must be made under federal or state tax laws
and such valuation affects any return or election of the Company, the Optionee
agrees that the Company may determine such value and that the Optionee will
observe any determination so made by the Company in all returns and elections
filed by the Optionee.
(Signatures on Following Page)
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IN WITNESS WHEREOF, the parties hereto have caused this Award Agreement
to be executed effective as of the day and year first above written.
AMERICAN STUDIOS, INC.
By: /s/ J. Robert Wren, Jr.
J. Robert Wren, Jr., Chief Executive Officer
OPTIONEE:
/s/ R. Kent Smith (SEAL)
Print Name: R. Kent Smith
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EXHIBIT A
American Studios, Inc.
11001 Park Charlotte Blvd.
Charlotte, NC 28273
Attention: Stock Option/Compensation Committee
Re: Exercise of Option
Dear Committee Members:
Pursuant to the terms and conditions of the Nonqualified Stock Option
Award Agreement effective as of _________________, 19__ (the "Award Agreement")
between _____________________________ and American Studios, Inc. (the
"Company"), I hereby agree to purchase _______ shares of the Common Stock of the
Company and tender payment in full for such shares in accordance with the terms
of the Award Agreement.
I hereby reaffirm that the representations and warranties made in the
Award Agreement are true and correct on the date hereof as if made on the date
hereof.
Very truly yours,
------------------------------------
Print Name:__________________________
Date:________________
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