EXHIBIT 10.1
GAY ENTERTAINMENT TELEVISION, INC.
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1997 STOCK OPTION PLAN
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1. PURPOSE. The purpose of this Plan is to advance the interests of the GAY
ENTERTAINMENT TELEVISION, INC., a New York corporation ("GET/the Company") and
each "Subsidiary," as hereinafter defined of GET (GET and Subsidiary
collectively referred to as the "Company"), by providing an additional incentive
to attract and retain qualified and competent persons who are key employees of
the Company, and upon whose efforts and judgment the success of the Company is
largely dependent, through the encouragement of stock ownership in the Company,
by such persons.
2. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Committee" shall mean the stock option committee appointed by the
Board pursuant to Section 13 hereof or, if not appointed, the Board.
(c) "Common Stock" shall mean the Company's Common Stock, par value
$0.0001 per share.
(d) "Director" shall mean a member of the Board.
(e) "Disinterested Person" shall mean a Director who is not, during the
one year prior to his or her service as an administrator of this Plan, or during
such service, granted or awarded equity securities pursuant to this Plan or any
other plan of the Company or any of its affiliates, except that:
(i) participation in a formula plan meeting the conditions in
paragraph (c)(2)(ii) of Rule 16b-3 promulgated under the Securities Exchange Act
shall not disqualify a Director from being a Disinterested Person;
(ii) participation in an ongoing securities acquisition plan
meeting the conditions in paragraph (d)(2)(i) of Rule 16b-3 promulgated under
the Securities Exchange Act shall not disqualify a Director from being a
Disinterested Person; and
(iii) an election to receive an annual retainer fee in either cash
or an equivalent amount of securities, or partly in cash and partly in
securities, shall not disqualify a Director from being a Disinterested Person.
(f) "Fair Market Value" of a Share on any date of reference shall be
the "Closing Price" (as defined below) of the Common Stock on the business day
immediately preceding such date, unless the Committee, in its sole discretion,
shall determine otherwise in a fair and uniform manner. For the purpose of
determining Fair Market Value, the "Closing Price" of the Common Stock on any
business day shall be (i) if the Common Stock is listed or admitted for trading
on any United States national securities exchange, or if actual transactions are
otherwise reported on a consolidated transaction reporting system, the last
reported sale price of Common Stock on such exchange or reporting system, as
reported in any newspaper of general circulation, (ii) if the Common Stock is
quoted on the National Association of Securities Dealers Automated Quotations
System ("NASDAQ"), or any similar system of automated dissemination of
quotations of securities prices in common use, the mean between the closing high
bid and low asked quotations for such day of Common Stock on such system, or
(iii) if neither clause (i) or (ii) is applicable, the mean between the high bid
and low asked quotations for the Common Stock as reported by the National
Quotation Bureau, Incorporated if at least two securities dealers have inserted
both bid and asked quotations for Common Stock on at least five of the ten
preceding days.
(g) "Incentive Stock Option" or "ISO" shall mean an incentive stock
option as defined in Section 422 of the Internal Revenue Code.
(h) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(i) "Non-Statutory Stock Option" or "NSO" shall mean an Option which is
not an Incentive Stock Option.
(j) "Officer" shall mean the Company's president, principal financial
officer, principal accounting officer and any other person who the Company
identifies as an "executive officer" for purposes of reports or proxy materials
filed by the Company pursuant to the Securities Exchange Act.
(k) "Option" (when capitalized) shall mean any option granted under
this Plan.
(l) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person.
(m) "Plan" shall mean this Stock Option Plan for the Company.
(n) "Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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(o) "Share(s)" shall mean a share or shares of the Common Stock.
(p) "Subsidiary" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time the
Option is granted, each of the corporations other than the last corporation in
the unbroken chain owns 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
3. SHARES AND OPTIONS. The Company may grant to Optionees from time to time
Options to purchase an aggregate of up to Five Hundred Thousand (500,000) Shares
from Shares held in the Company's treasury or from authorized and unissued
Shares. If any Option granted under the Plan shall terminate, expire or be
canceled or surrendered as to any Shares, new Options may thereafter be granted
covering such Shares. An Option granted hereunder shall be either an Incentive
Stock Option or a Non-Statutory Stock Option as determined by the Committee at
the time of grant of such Option and shall clearly state whether it is an
Incentive Stock Option or Non-Statutory Stock Option. All Incentive Stock
Options shall be granted within 10 years from the effective date of this Plan.
4. DOLLAR LIMITATION. Options otherwise qualifying as Incentive Stock
Options hereunder will not be treated as Incentive Stock Options only to the
extent that the aggregate fair market value (determined at the time the Option
is granted) of the Shares, with respect to which Options meeting the
requirements of the Internal Revenue Code Section 422(b) are exercisable for the
first time by any individual during any calendar year (under all plans of the
Company), exceeds $100,000.
5. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that may
contain any term deemed necessary or desirable by the Committee, provided such
terms are not inconsistent with this Plan or any applicable law. Optionees shall
be those persons selected by the Committee from the class of all regular
employees of the Company, including employees who are also Directors or
Officers. Any person who files with the Committee, in a form satisfactory to the
Committee, a written waiver of eligibility to receive any Option under this Plan
shall not be eligible to receive any Option under this Plan for the duration of
such waiver.
(b) In granting Options, the Committee may take into consideration the
contribution the person has made to the success of the Company and such other
factors as the Committee shall determine. The Committee shall also have the
authority to consult with and receive recommendations from officers and other
personnel of the Company with regard to these matters. The Committee may, from
time to time, in granting Options under the Plan, prescribe such other terms and
conditions concerning such Options as it deems appropriate, including, without
limitation, (i) prescribing the
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date or dates on which the Option becomes exercisable, (ii) providing that the
Option rights accrue or become exercisable in installments over a period of
years, or upon the attainment of stated goals or both, or (iii) relating an
Option to the continued employment of the Optionee for a specified period of
time, provided that such terms and conditions are not more favorable to an
Optionee than those expressly permitted herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company. Neither the Plan nor any Option granted
under the Plan shall confer upon any person any right to employment or
continuance of employment by the Company.
(d) Notwithstanding any other provision of this Plan, and in addition to
any other requirements of this Plan, Options may not be granted to a Director or
Officer unless the grant of such Options is authorized by, and all of the terms
of such Options are determined by, a Committee that is appointed in accordance
with Section 14 of this Plan and all of whose members are Disinterested Persons.
6. OPTION PRICE. The option price per Share of any Option shall be any
price determined by the Committee but shall not be less than the par value per
Share; provided, however, that in no event shall the option price per Share of
any Incentive Stock Option be less than the Fair Market Value of the Shares
underlying such Option on the date such Option is granted.
7. EXERCISE OF OPTIONS. An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Committee, in its sole discretion, have been made
for the Optionee's payment to the Company of the amount that is necessary for
the Company employing the Optionee to withhold in accordance with applicable
Federal or state tax withholding requirements. Unless further limited by the
Committee in any Option, the option price of any Shares purchased shall be paid
in cash, by certified or official bank check, by money order, with Shares or by
a combination of the above; provided further, however, that the Committee, in
its sole discretion, may accept a personal check in full or partial payment of
any Shares. If the exercise price is paid in whole or in part with Shares, the
value of the Shares surrendered shall be their Fair Market Value on the date the
Option is exercised. The Company, in its sole discretion, may, on an individual
basis or pursuant to a general program established by the Committee in
connection with this Plan, lend money to an Optionee to exercise all or a
portion of an Option granted hereunder. If the exercise price is paid in whole
or in part with the Optionee's promissory note, such note shall (i) provide for
full recourse to the maker, (ii) be collateralized by the pledge of the Shares
that the Optionee purchases upon exercise of such Option, (iii) bear interest at
a rate no less than the rate of interest payable by the Company to its principal
lender, and (iv)
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contain such other terms as the Committee, in its sole discretion, shall
require. No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of this Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 11 hereof.
8. EXERCISABILITY OF OPTIONS. Any Option shall become exercisable in such
amounts, at such intervals and upon such terms as the Committee shall provide in
such Option, except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined by the
Committee at the time of grant, but in no event shall an Option be exercisable
after the expiration of 10 years from the date of grant of the Option.
(b) Unless otherwise provided in any Option, each outstanding Option
shall become immediately fully exercisable:
(i) if there occurs any transaction (which shall include a series
of transactions occurring within 60 days or occurring pursuant to a plan), that
has the result that shareholders of the Company immediately before such
transaction cease to own at least 51% of the voting stock of the Company or of
any entity that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any other form of
corporate transaction;
(ii) if the shareholders of the Company shall approve a plan of
merger, consolidation, reorganization, liquidation or dissolution in which the
Company does not survive (unless the approved merger, consolidation,
reorganization, liquidation or dissolution is subsequently abandoned); or
(iii) if the shareholders of the Company shall approve a plan for
the sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Company (unless such plan is subsequently abandoned).
(c) The Committee may in its sole discretion accelerate the date on
which any Option may be exercised and may accelerate the vesting of any Shares
subject to any Option or previously acquired by the exercise of any Option.
(d) Options granted to Officers and Directors shall not be exercisable
until the expiration of a period of at least six months following the date of
grant.
9. TERMINATION OF OPTION PERIOD.
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(a) The unexercised portion of any Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of the following:
(i) three months after the date on which the Optionee's employment
is terminated or, in the case of a Non-Statutory Stock Option, and unless the
Committee shall otherwise determine in writing, in its sole discretion, the date
on which the Optionee's employment is terminated, in either case for any reason
other than by reason of (A) Cause, which, solely for purposes of this Plan,
shall mean the termination of the Optionee's employment by reason of the
Optionee's wilful misconduct or gross negligence, (B) a mental or physical
disability as determined by a medical doctor satisfactory to the Committee, or
(C) death;
(ii) immediately upon the termination of the Optionee's employment
for Cause;
(iii) one year after the date on which the Optionee's employment
is terminated by reason of a mental or physical disability (within the meaning
of Internal Revenue Code Section 22(e)) as determined by a medical doctor
satisfactory to the Committee; or
(iv) (A) 12 months after the date of termination of the Optionee's
employment by reason of death of the employee, or (B) three months after the
date on which the Optionee shall die if such death shall occur during the
one-year period specified in Subsection 9(a)(iii) hereof.
(b) The Committee, in its sole discretion, may, by giving written notice
("Cancellation Notice") cancel, effective upon the date of the consummation of
any corporate transaction described in Subsections 8(b)(ii) or (iii) hereof, any
Option that remains unexercised on such date. Such cancellation notice shall be
given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
10. RELOAD OPTIONS. The Committee may provide for the grant to any Optionee
of additional Options upon the exercise of Options ("Reload Options"), including
the exercise of Reload Options, through the delivery of Shares; provided,
however, that (i) the Reload Options may be granted only with respect to the
same number of Shares as were surrendered to exercise the Options, (ii) the
exercise price of the Reload Options will be the Fair Market Value on the date
of grant of the Reload Options, (iii) with respect to Optionees who are subject
to the reporting requirements of Section 16(a) of the Securities Exchange Act,
the Reload Option may not be exercised after the date the Options with respect
to which such Reload Options were granted expire or terminate and (iv) the
provisions contained in this Section may not be amended more than once every
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six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder.
11. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised Options
are outstanding, there shall be any increase or decrease in the number of issued
and outstanding Shares through the declaration of a stock dividend or through
any recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant under the Plan, so that the same percentage of the
Company's issued and outstanding Shares shall continue to be subject to being so
optioned; and
(ii) appropriate adjustment shall be made in the number of Shares
and the exercise price per Share thereof then subject to any outstanding Option,
so that the same percentage of the Company's issued and outstanding Shares shall
remain subject to purchase at the same aggregate price.
(b) Subject to the specific terms of any Option, the Committee may
change the terms of Options outstanding under this Plan, with respect to the
option price or the number of Shares subject to the Options, or both, when, in
the Committee's sole discretion, such adjustments become appropriate by reason
of a corporate transaction described in Subsections 8(b)(ii) or (iii) hereof.
(c) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to the number of or exercise price of Shares then subject
to outstanding Options granted under the Plan.
(d) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
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Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
12. TRANSFERABILITY OF OPTIONS. Each Option shall provide that such Option
shall not be transferable by the Optionee otherwise than by will or the laws of
descent and distribution, and each Option shall be exercisable during the
Optionee's lifetime only by the Optionee.
13. ISSUANCE OF SHARES. As a condition of any sale or issuance of Shares
upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(i) a representation and warranty by the Optionee to the Company, at
the time any Option is exercised, that he is acquiring the Shares to be issued
to him for investment and not with a view to, or for sale in connection with,
the distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to be bound by any
legends that are, in the opinion of the Committee, necessary or appropriate to
comply with the provisions of any securities law deemed by the Committee to be
applicable to the issuance of the Shares and are endorsed upon the Share
certificates.
14. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by the Committee, which shall consist
of not less than two Directors, each of whom shall be Disinterested Persons to
the extent required by Section 5(d) hereof. The Committee shall have all of the
powers of the Board with respect to the Plan. Any member of the Committee may be
removed at any time, with or without cause, by resolution of the Board and any
vacancy occurring in the membership of the Committee may be filled by
appointment by the Board.
(b) The Committee, from time to time, may adopt rules and regulations
for carrying out the purposes of the Plan. The Committee's determinations and
its interpretation and construction of any provision of the Plan shall be final
and conclusive.
(c) Any and all decisions or determinations of the Committee shall be
made either (i) by a majority vote of the members of the Committee at a meeting
or (ii) without a meeting by the unanimous written approval of the members of
the Committee.
15. INCENTIVE OPTIONS FOR 10% SHAREHOLDERS. Notwithstanding any other
provisions of the Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Internal Revenue Code) at the date of grant, stock
possessing more than 10% of the
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total combined voting power of all classes of stock of the Company (or of its
subsidiary [as defined in Section 424 of the Internal Revenue Code] at the date
of grant) unless the option price of such Option is at least 110% of the Fair
Market Value of the Shares subject to such Option on the date the Option is
granted, and such Option by its terms is not exercisable after the expiration of
five years from the date such Option is granted.
16. INTERPRETATION.
(a) The Plan shall be administered and interpreted so that all Incentive
Stock Options granted under the Plan will qualify as Incentive Stock Options
under Section 422 of the Internal Revenue Code. If any provision of the Plan
should be held invalid for the granting of Incentive Stock Options or illegal
for any reason, such determination shall not affect the remaining provisions
hereof, but instead the Plan shall be construed and enforced as if such
provision had never been included in the Plan.
(b) This Plan shall be governed by the laws of the State of New York.
(c) Headings contained in this Plan are for convenience only and shall
in no manner be construed as part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall be
a reference to such other gender as is appropriate.
17. AMENDMENT AND DISCONTINUATION OF THE PLAN. Either the Board or the
Committee may from time to time amend the Plan or any Option; provided, however,
that, except to the extent provided in Section 11, no such amendment may,
without approval by the shareholders of the Company, (a) materially increase the
benefits accruing to participants under the Plan, (b) materially increase the
number of securities which may be issued under the Plan, or (c) materially
modify the requirements as to eligibility for participation in the Plan; and
provided further, that, except to the extent provided in Section 9, no amendment
or suspension of the Plan or any Option issued hereunder shall substantially
impair any Option previously granted to any Optionee without the consent of such
Optionee.
18. EFFECTIVE DATE AND TERMINATION DATE. The effective date of the Plan is
the date on which the Board adopts this Plan, which is September 1, 1997, and
the Plan shall terminate on the 10th anniversary year of the effective date.
GAY ENTERTAINMENT TELEVISION, INC.
By:___________________________
Marvin A. Schwam, CEO
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[NSO GRANT FORM]
GAY ENTERTAINMENT TELEVISION, INC.
7 East 17th Street
New York, NY 10003
Date: __________
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Dear __________:
The Board of Directors of Gay Entertainment Television, Inc. (the
"Corporation") is pleased to award you an Option pursuant to the provisions of
the 1997 Stock Option Plan (the "Plan"). This letter will describe the Option
granted to you. Attached to this letter is a copy of the Plan. The terms of the
Plan also set forth provisions governing the Option granted to you. Therefore,
in addition to reading this letter you should also read the Plan. Your signature
on this letter is an acknowledgement to us that you have read and under-stand
the Plan and that you agree to abide by its terms. All terms not defined in this
letter shall have the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an NSO. Please see in particular Section
11 of the Plan.
2. RIGHTS AND PRIVILEGES. Subject to the conditions hereinafter set forth,
we grant you the right to purchase __________ shares of Stock at $__________ per
share, the current fair market value of a share of Stock. The right to purchase
the shares of Stock accrues in __________ installments over the time periods
described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
3. TIME OF EXERCISE. The Option may be exercised at any time and from time
to time beginning when the right to purchase the shares of Stock accrues and
ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written notice to
the Chief Financial Officer at the Corporation's principal place of business.
The notice shall set forth the number of shares of Stock to be acquired and
shall contain a check
payable to the Corporation in full payment for the Stock or that number of
already owned shares of Stock equal in value to the total Exercise Price of the
Option. We shall make delivery of the shares of Stock subject to the conditions
described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the Option shall
terminate upon the first to occur of the following dates:
(a) __________, 199_, being __________ years from the date of grant
pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of three months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the Plan
for any reason, other than by reason of death or permanent disability. As used
herein, "permanent disability" means your inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months; or
(c) The expiration of 12 months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the
Plan, if such employment termination occurs by reason of your death or by reason
of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have not been
registered under the Securities Act of 1933, as amended (the "Act"). The
Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear an
appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this letter
shall inure to the benefit of and be binding upon both of us, and our respective
heirs, personal representatives, successors and assigns.
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8. DATE OF GRANT. The Option shall be treated as having been granted to you
on the date of this letter even though you may sign it at a later date.
Very truly yours,
By:
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President
AGREED AND ACCEPTED:
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Date: ________________
GAY ENTERTAINMENT TELEVISION, INC.
7 East 17th Street
New York, NY 10003
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Dear _______________:
The Board of Directors of Gay Entertainment Television, Inc. (the
"Corporation") is pleased to award you an Option pursuant to the provisions of
the 1997 Stock Option Plan (the "Plan"). This letter will describe the Option
granted to you. Attached to this letter is a copy of the Plan. The terms of the
Plan also set forth provisions governing the Option granted to you. Therefore,
in addition to reading this letter you should also read the Plan. Your signature
on this letter is an acknowledgement to us that you have read and under-stand
the Plan and that you agree to abide by its terms. All terms not defined in this
letter shall have the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an ISO. Please see in particular Section
11 of the Plan.
2. RIGHTS AND PRIVILEGES. Subject to the conditions hereinafter set forth,
we grant you the right to purchase __________ shares of Stock at $__________ per
share, the current fair market value of a share of Stock. The right to purchase
the shares of Stock accrues in __________ installments over the time periods
described below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
3. TIME OF EXERCISE. The Option may be exercised at any time and from time
to time beginning when the right to purchase the shares of Stock accrues and
ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written notice to
the Chief Financial Officer at the Corporation's principal place of business.
The notice shall set forth the number of shares of Stock to be acquired and
shall contain a check payable to the Corporation in full payment for the Stock
or that number of already owned shares of Stock equal in value to the total
Exercise Price of the Option. We shall make delivery of the shares of Stock
subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the Option shall
terminate upon the first to occur of the following dates:
(a) _____________, 199___, being __________ years from the date of grant
pursuant to the provisions of Section 2 of this Agreement; or
(b) The expiration of thirty (30) days following the date your
employment terminates with the Corporation and any of its subsidiaries included
in the Plan for any reason, other than by reason of death or permanent
disability. As used herein, "permanent disability" means your inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months; or
(c) The expiration of 12 months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the
Plan, if such employment termination occurs by reason of your death or by reason
of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have not been
registered under the Securities Act of 1933, as amended (the "Act"). The
Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear an
appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
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furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this letter
shall inure to the benefit of and be binding upon both of us, and our respective
heirs, personal representatives, successors and assigns.
8. DATE OF GRANT. The Option shall be treated as having been granted to you
on the date of this letter even though you may sign it at a later date.
Very truly yours,
By:
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President
AGREED AND ACCEPTED:
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[NSO GRANT FORM
WITH RELOAD OPTIONS]
GAY ENTERTAINMENT TELEVISION, INC.
7 East 17th Street
New York, NY 10003
Date: __________
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Dear __________:
The Board of Directors of Gay Entertainment Television, Inc. (the
"Corporation") is pleased to award you an Option pursuant to the provisions of
the 1997 Stock Option Plan (the "Plan"). This letter will describe the Option
granted to you. Attached to this letter is a copy of the Plan. The terms of the
Plan also set forth provisions governing the Option granted to you. Therefore,
in addition to reading this letter you should also read the Plan. Your signature
on this letter is an acknowledgement to us that you have read and under-stand
the Plan and that you agree to abide by its terms. All terms not defined in this
letter shall have the same meaning as in the Plan.
1. TYPE OF OPTION. You are granted an NSO. Please see in particular Section
11 of the Plan.
2. RIGHTS AND PRIVILEGES.
(a) Subject to the conditions hereinafter set forth, we grant you the
right to purchase __________ shares of Stock at $__________ per share, the
current fair market value of a share of Stock. The right to purchase the shares
of Stock accrues in __________ installments over the time periods described
below:
The right to acquire __________ shares accrues on __________.
The right to acquire __________ shares accrues on __________.
(b) In addition to the Option granted hereby (the "Underlying Option"),
the Corporation will grant you a reload option (the "Reload Option") as
hereinafter provided. A Reload Option is hereby granted to you if you acquire
shares of Stock pursuant to the exercise of the Underlying Option and pay for
such shares of Stock with shares of Common Stock already owned by you (the
"Tendered Shares"). The Reload Option grants you the right to purchase shares of
Stock equal in number to the number of Tendered Shares. The date on which the
Tendered Shares are tendered to the Corporation in full or partial payment of
the purchase price for the shares of Stock acquired pursuant to the exercise of
the Underlying Option is the Reload Grant Date. The exercise price of the Reload
Option is the fair market value of the Tendered Shares on the Reload Grant Date.
The fair market value of the Tendered Shares shall be the low bid price per
share of the Corporation's Common Stock on the Reload Grant Date. The Reload
Option shall vest equally over a period of __________ (___) years, commencing on
the first anniversary of the Reload Grant Date, and on each anniversary of the
Reload Grant Date thereafter; however, no Reload Option shall vest in any
calendar year if it would allow you to purchase for the first time in that
calendar year shares of Stock with a fair market value in excess of $100,000,
taking into account ISOs previously granted to you. The Reload Option shall
expire on the earlier of (i) __________ (___) years from the Reload Grant Date,
or (ii) in accordance with Paragraph 5(b), or (iii) in accordance with Paragraph
5(c) as set forth herein. If vesting of the Reload Option is deferred, then the
Reload Option shall vest in the next calendar year, subject, however, to the
deferral of vesting previously provided. Except as provided herein the Reload
Option is subject to all of the other terms and provisions of this Agreement
governing Options.
3. TIME OF EXERCISE. The Option may be exercised at any time and from time
to time beginning when the right to purchase the shares of Stock accrues and
ending when they terminate as provided in Section 5 of this letter.
4. METHOD OF EXERCISE. The Options shall be exercised by written notice to
the Chief Financial Officer at the Corporation's principal place of business.
The notice shall set forth the number of shares of Stock to be acquired and
shall contain a check payable to the Corporation in full payment for the Stock
or that number of already owned shares of Stock equal in value to the total
Exercise Price of the Option. We shall make delivery of the shares of Stock
subject to the conditions described in Section 13 of the Plan.
5. TERMINATION OF OPTION. To the extent not exercised, the Option shall
terminate upon the first to occur of the following dates:
(a) __________, 199_, being __________ years from the date of grant
pursuant to the provisions of Section 2 of this Agreement; or
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(b) The expiration of three months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the Plan
for any reason, other than by reason of death or permanent disability. As used
herein, "permanent disability" means your inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months; or
(c) The expiration of 12 months following the date your employment
terminates with the Corporation and any of its subsidiaries included in the
Plan, if such employment termination occurs by reason of your death or by reason
of your permanent disability (as defined above).
6. SECURITIES LAWS.
The Option and the shares of Stock underlying the Option have not been
registered under the Securities Act of 1933, as amended (the "Act"). The
Corporation has no obligations to ever register the Option or the shares of
Stock underlying the Option. All shares of Stock acquired upon the exercise of
the Option shall be "restricted securities" as that term is defined in Rule 144
promulgated under the Act. The certificate representing the shares shall bear an
appropriate legend restricting their transfer. Such shares cannot be sold,
transferred, assigned or otherwise hypothecated without registration under the
Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Corporation has been
furnished with an opinion of counsel satisfactory in form and substance to the
Corporation that such registration is not required.
7. BINDING EFFECT. The rights and obligations described in this letter
shall inure to the benefit of and be binding upon both of us, and our respective
heirs, personal representatives, successors and assigns.
8. DATE OF GRANT. The Option shall be treated as having been granted to you
on the date of this letter even though you may sign it at a later date.
Very truly yours,
By:
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President
AGREED AND ACCEPTED:
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