<PAGE> 1
As filed with the Securities and Exchange Commission on August 8, 1997
Registration No. 333-___
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
On Command Corporation
(Exact name of issuer as specified in its charter)
Delaware 77-04535194
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
6331 San Ignacio Avenue
San Jose, California 95119
(Address of Principal Executive Offices, including Zip Code)
ON COMMAND CORPORATION 1997 EMPLOYEE STOCK PURCHASE PLAN
ON COMMAND CORPORATION 1997 NON-EMPLOYEE DIRECTORS STOCK PLAN
(Full Title of the Plan)
Jill E. Fishbein, Esq.
Senior Vice President, General Counsel and Secretary
c/o On Command Corporation
6331 San Ignacio Avenue
San Jose, California 95119
(408) 360-4500
(Name, Address and Telephone Number, including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Securities to be Offering Price Aggregate Registration
to be Registered Registered per Share Offering Price Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 290,000 $11.75 (1) $3,407,500 (1) $1,033.00
($.01 par value) shares
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(h) and (c) solely for the purpose of
calculating the registration fee on the basis of the average of the high
and low prices of the Registrant's Common Stock on the Nasdaq National
Market on August 4, 1997.
<PAGE> 2
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents which have been filed previously with the
Securities and Exchange Commission (the "Commission") by On Command Corporation
(the "Company") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K (Commission File No.
00-21315) for the fiscal year ended December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q (Commission File No.
00-21315) for the fiscal quarter ended March 31, 1997.
(c) The description of the Company's Common Stock contained in
Amendment No. 1 to the Company's Registration Statement Form 8-A
(Commission File No. 00-21315) filed on September 10, 1996 with
the Commission under Section 12(g) of the Exchange Act, which
incorporates by reference the description of such Common Stock
contained in the Company's Registration Statement on Form S-4
(Commission File No. 333-10407) (which description is herein
incorporated by reference), and any amendment or report filed for
the purpose of updating such description.
All documents filed with the Commission subsequent to the date of this
Registration Statement pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the date of filing of such
documents with the Commission.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable, as the Company's Common Stock is registered under
Section 12(g) of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
An opinion as to the validity of the securities being issued has been
rendered for the Company by Jill E. Fishbein, Senior Vice President, Legal,
General Counsel and Secretary of the Company. As of July 30, 1997, Ms. Fishbein
had options to purchase 50,000 shares of Common Stock, none of which options
were exercisable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Reference is made to the provisions of Article IX of the Registrant's
Certificate of Incorporation filed as Exhibit 4(a) hereto and the provisions of
Article VIII of the Registrant's By-laws filed as Exhibit 4(b) hereto.
2
<PAGE> 3
As permitted by Section 145 of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Company's
Bylaws provide that the Company will indemnify its officers and directors to the
fullest extent permitted by the Delaware General Corporation Law and that the
Company may indemnify its employees and agents in the discretion of the Board of
Directors. Generally, Section 145 of the General Corporation Law of the State of
Delaware (the "Delaware Corporation Law") permits a corporation to indemnify
certain persons made a party or threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that such person is or
was a director or officer of the corporation or is or was serving at the request
of the corporation as a director or officer of another corporation or
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with any such action, suit or proceeding if he acted in good faith and in a
manner that he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, if
he had no reasonable cause to believe that his conduct was unlawful. If,
however, any threatened, pending or completed action, suit or proceeding is by
or in the right of the corporation, the director or officer is not permitted to
be indemnified in respect of any claim, issue or matter as to which he is
adjudged to be liable to the corporation unless the Delaware Court of Chancery,
or such other court adjudicating the action, determines otherwise.
Additionally, there are in effect directors' and officers' liability
insurance policies which insure the Registrant's directors and officers against
certain liabilities that they may incur in such capacities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Exhibit No. Description of Exhibit
----------- ----------------------
4(a) Certificate of Amended and Restated Certificate of
Incorporation of On Command Corporation (as amended through
August 13, 1996) (Incorporated by reference to Exhibit 3.1
to Amendment No. 1 to the Company's Registration Statement
on Form S-4, Commission File No. 333-10407 (the "Form
S-4")).
4(b) By-laws of On Command Corporation (as amended through August
13, 1996) (Incorporated by reference to Exhibit 3.3 to
Amendment No. 1 to the Company's Registration Statement on
Form S-4).
4(c) On Command Corporation 1997 Employee Stock Purchase Plan.
4(d) On Command Corporation 1997 Non-Employee Directors Stock
Plan.
3
<PAGE> 4
4(e) Forms of agreements for On Command Corporation 1997
Non-Employee Directors Stock Plan.
5(a) Opinion of Jill E. Fishbein, Senior Vice President, Legal,
General Counsel and Secretary of the Registrant.
23(a) Independent Auditors' Consent.
23(b) Consent of Jill E. Fishbein (contained in Exhibit 5(a)).
24 Powers of Attorney (see page 6).
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period, in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
4
<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Jose, State of California, on August 4,
1997.
On Command Corporation
/s/ ROBERT M. KAVNER
-------------------------------------
Robert M. Kavner
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints Jill E. Fishbein and Paul J. Milley, and
each of them, his true and lawful attorneys-in-fact and agents with full power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8, and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or it might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ ROBERT M. KAVNER President, Chief Executive Officer and Director August 4, 1997
- -------------------------------------- (Principal Executive Officer)
Robert M. Kavner
/s/ BRIAN A.C. STEEL Executive Vice President, Chief Financial Officer and August 4, 1997
- -------------------------------------- Director (Principal Financial Officer)
Brian A.C. Steel
/s/ PAUL J. MILLEY Senior Vice President, Finance (Principal Accounting August 4, 1997
- -------------------------------------- Officer)
Paul J. Milley
/s/ JAMES CRONIN Director August 4, 1997
- --------------------------------------
James Cronin
/s/ CHARLES LYONS Chairman of the Board August 4, 1997
- --------------------------------------
Charles Lyons
/s/ GARY WILSON Director August 4, 1997
- ---------------------------------------
Gary Wilson
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description
- ----------- -----------
<S> <C>
4(a) Certificate of Amended and Restated Certificate of
Incorporation of On Command Corporation (as amended
through August 13, 1996) (Incorporated by reference
to Exhibit 3.1 to Amendment No. 1 to the Company's
Registration Statement on Form S-4, Commission File
No. 333-10407 (the "Form S-4")).
4(b) By-laws of On Command Corporation (as amended through
August 13, 1996) (Incorporated by reference to
Exhibit 3.3 to Amendment No. 1 to the Company's
Registration Statement on Form S-4).
4(c) On Command Corporation 1997 Employee Stock Purchase
Plan.
4(d) On Command Corporation 1997 Non-Employee Directors
Stock Plan.
4(e) Forms of agreements for On Command Corporation 1997
Non-Employee Directors Stock Plan.
5(a) Opinion of Jill E. Fishbein, Senior Vice President,
Legal, General Counsel and Secretary of the
Registrant.
23(a) Independent Auditors' Consent.
23(b) Consent of Jill E. Fishbein (contained in Exhibit
5(a)).
24 Powers of Attorney (see page 6).
</TABLE>
7
<PAGE> 1
EXHIBIT 4(c)
ON COMMAND CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
As Adopted March 17, 1997
1. ESTABLISHMENT OF PLAN. On Command Corporation (the "COMPANY")
proposes to grant options for purchase of the Company's Common Stock to eligible
employees of the Company and its Subsidiaries (as hereinafter defined) pursuant
to this Employee Stock Purchase Plan (this "PLAN"). For purposes of this Plan,
"PARENT CORPORATION" and "SUBSIDIARY" (collectively, "SUBSIDIARIES") shall have
the same meanings as "parent corporation" and "subsidiary corporation" in
Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986,
as amended (the "CODE"). The Company intends this Plan to qualify as an
"employee stock purchase plan" under Section 423 of the Code (including any
amendments to or replacements of such Section), and this Plan shall be so
construed. Any term not expressly defined in this Plan but defined for purposes
of Section 423 of the Code shall have the same definition herein. A total of
180,000 shares of the Company's Common Stock is reserved for issuance under this
Plan. Such number shall be subject to adjustments effected in accordance with
Section 14 of this Plan.
2. PURPOSE. The purpose of this Plan is to provide employees of the
Company and Subsidiaries designated by the Board of Directors of the Company
(the "BOARD") as eligible to participate in this Plan with a convenient means of
acquiring an equity interest in the Company through payroll deductions, to
enhance such employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.
3. ADMINISTRATION.
(a) The Board shall appoint the Chief Operations Officer and Executive
Vice of the Corporation to serve as "PLAN ADMINISTRATOR". Except where the Plan
specifically reserves the determination of matters to the Board or a committee
appointed by the Board (the "COMMITTEE"), the Plan shall be administered by the
Plan Administrator. In addition to his or her duties with respect to the Plan
stated elsewhere in the Plan, the Plan Administrator shall have full authority,
consistently with the Plan, to interpret the Plan, to promulgate such rules and
regulations with respect to the Plan as he or she deems desirable and to make
all other determinations necessary or desirable for the administration of the
Plan. Except as provided in paragraph (b), all decisions, determinations and
interpretations of the Committee shall be binding upon all persons.
(b) If a claim for benefits under the Plan is wholly or partially
denied by the Plan Administrator, the claimant may request the Board (or
Committee if one is appointed) to review the denial of his or her claim. The
Board (or Committee if one is appointed) shall make a decision and furnish such
decision to the claimant within a reasonable period of time after the request
for review is made. All decisions of the Board or Committee, as appropriate,
shall be final and binding upon all persons. All expenses incurred in connection
with the administration of this Plan shall be paid by the Company.
4. ELIGIBILITY. Any employee of the Company or the Subsidiaries is
eligible to participate in an Offering Period (as hereinafter defined) under
this Plan except the following:
<PAGE> 2
(a) employees who are not employed by the Company or Subsidiaries ten
days before the beginning of such Offering Period;
(b) employees who are customarily employed for less than twenty (20)
hours per week;
(c) employees who are customarily employed for less than five (5)
months in a calendar year;
(d) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of
its Subsidiaries or who, as a result of being granted an option under this Plan
with respect to such Offering Period, would own stock or hold options to
purchase stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or any of its
Subsidiaries;
(e) individuals who provide services to the Company as independent
contractors whether or not reclassified as common law employees, unless the
Company withholds or is required to withhold U.S. Federal employment taxes for
such individuals pursuant to Section 3402 of the Code.
5. OFFERING DATES. The offering periods of this Plan (each, an
"OFFERING PERIOD") shall be in three month periods commencing on the 23rd day of
each of January, April, July, and October and ending on the 22nd day of each of
April, July, October and January of the following calendar year, respectively
during which payroll deductions of the participants are accumulated under this
Plan. "PURCHASE PERIODS" shall be the monthly periods commencing on the 23rd day
of each month and ending on the 22nd day of the next subsequent month during the
Offering Period. The first business day of each Offering Period is referred to
as the "OFFERING DATE". The last business day of each Purchase Period is
referred to as the "PURCHASE DATE". The Board shall have the power to change the
duration of Offering Periods or Purchase Periods with respect to offerings
without stockholder approval if such change is announced at least fifteen (15)
days prior to the scheduled beginning of the first Offering Period or Purchase
Period to be affected.
6. PARTICIPATION IN THIS PLAN. Eligible employees may become
participants in an Offering Period under this Plan on the first Offering Date
after satisfying the eligibility requirements by delivering a subscription
agreement to the Company's Legal Department (the "LEGAL DEPARTMENT") not later
than the 15 days before such Offering Date unless a later time for filing the
subscription agreement authorizing payroll deductions is set by the Board for
all eligible employees with respect to a given Offering Period. An eligible
employee who does not deliver a subscription agreement to the Legal Department
by such date after becoming eligible to participate in such Offering Period
shall not participate in that Offering Period or any subsequent Offering Period
unless such employee enrolls in this Plan by filing a subscription agreement
with the Legal Department not later than 15 days prior to preceding a subsequent
Offering Date. Once an employee becomes a participant in an Offering Period,
such employee will automatically participate in the Offering Period commencing
immediately following the last day of the prior Offering Period unless the
employee withdraws or is deemed to withdraw from this Plan or terminates further
participation in the Offering Period as set forth in Section 11 below. Such
participant is not required to file any additional subscription agreement in
order to continue participation in this Plan.
7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such employee of an option to purchase on
the Purchase Dates up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee's payroll
deduction account during each such Purchase Period by ninety percent (90%) of
the fair market value of a share of the
ii
<PAGE> 3
Company's Common Stock on such Purchase Date, provided, however, that the number
of shares of the Company's Common Stock subject to any option granted pursuant
to this Plan shall not exceed the lesser of (a) the maximum number of shares set
by the Board pursuant to Section 10(c) below with respect to the applicable
Offering Period, or (b) the maximum number of shares which may be purchased
pursuant to Section 10(b) below with respect to the applicable Offering Period.
The fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 8 hereof.
8. PURCHASE PRICE. The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be ninety percent (90%)
the fair market value on the Purchase Date. For purposes of this Plan, the term
"FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's
Common Stock determined as follows:
(a) if such Common Stock is then quoted on the NASDAQ
National Market, its closing price on the NASDAQ
National Market on the date of determination as
reported in The Wall Street Journal;
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, its closing
price on the date of determination on the principal
national securities exchange on which the Common Stock
is listed or admitted to trading as reported in The
Wall Street Journal;
(c) if such Common Stock is publicly traded but is not
quoted on the NASDAQ National Market nor listed or
admitted to trading on a national securities exchange,
the average of the closing bid and asked prices on the
date of determination as reported in The Wall Street
Journal; or
(d) if none of the foregoing is applicable, by the
Board in good faith.
9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE
OF SHARES.
(a) The purchase price of the shares is accumulated by regular payroll
deductions made during each Purchase Period. The deductions are made as a
percentage of the participant's compensation in one percent (1%) increments not
less than two percent (2%), nor greater than ten percent (10%) or such lower
limit set by the Board or Committee, as appropriate. Compensation shall mean all
W-2 compensation, including, but not limited to base salary, wages, commissions,
overtime, shift premiums and bonuses, plus draws against commissions; provided,
however, that for purposes of determining a participant's compensation, any
election by such participant to reduce his or her regular cash remuneration
under Sections 125 or 401(k) of the Code shall be treated as if the participant
did not make such election. Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Offering
Period unless sooner altered or terminated as provided in this Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during an Offering Period by filing with the Legal Department a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing more than fifteen (15) days
after the Legal Department's receipt of the authorization and shall continue for
the remainder of the Offering Period unless changed as described below. Such
change in the rate of payroll deductions may be made at any time during an
Offering Period, but not more than one (1) change may be made effective during
any Offering Period. A participant may increase or decrease the rate of payroll
deductions for any subsequent
iii
<PAGE> 4
Offering Period by filing with the Legal Department a new authorization for
payroll deductions not later than 15 days before the beginning of such Offering
Period.
(c) All payroll deductions made for a participant are credited to his
or her account under this Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose, and the Company shall not be obligated to segregate such payroll
deductions.
(d) On each Purchase Date, so long as this Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under this Plan and have all
payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply
the funds then in the participant's account to the purchase of whole shares of
Common Stock reserved under the option granted to such participant with respect
to the Purchase Period to the extent that such option is exercisable on the
Purchase Date. The purchase price per share shall be as specified in Section 8
of this Plan. Any amount remaining in such participant's account on a Purchase
Date which is less than the amount necessary to purchase a full share of Common
Stock of the Company shall be carried forward, without interest, into the next
Purchase Period or Offering Period, as the case may be. In the event that this
Plan has been oversubscribed, all funds not used to purchase shares on the
Purchase Date shall be returned to the participant, without interest. No Common
Stock shall be purchased on a Purchase Date on behalf of any employee whose
participation in this Plan has terminated prior to such Purchase Date.
(e) As promptly as practicable after the Purchase Date, the Company
shall arrange the delivery to each participant of a certificate representing the
shares purchased upon exercise of his option.
(f) During a participant's lifetime, such participant's option to
purchase shares hereunder is exercisable only by him or her. The participant
will have no interest or voting right in shares covered by his or her option
until such option has been exercised. Shares to be delivered to a participant
under this Plan will be registered in the name of the participant or in the name
of the participant and his or her spouse.
10. LIMITATIONS ON SHARES TO BE PURCHASED.
(a) No employee shall be entitled to purchase stock under this Plan at
a rate which, when aggregated with his or her rights to purchase stock under all
other employee stock purchase plans of the Company or any Subsidiary, exceeds
$25,000 in fair market value, determined as of the Offering Date (or such other
limit as may be imposed by the Code) for each calendar year in which the
employee participates in this Plan.
(b) No more than two hundred percent (200%) of the number of shares
determined by using ninety percent (90%) of the fair market value of a share of
the Company's Common Stock on the Offering Date as the denominator may be
purchased by a participant on any single Purchase Date.
(c) No employee shall be entitled to purchase more than the Maximum
Share Amount (as defined below) on any single Purchase Date. Not less than
thirty (30) days prior to the commencement of any Offering Period, the Board
may, in its sole discretion, set a maximum number of shares which may be
purchased by any employee at any single Purchase Date (hereinafter the "MAXIMUM
SHARE AMOUNT"). In no event shall the Maximum Share Amount exceed the amounts
permitted under Section 10(b) above. If a new Maximum Share Amount is set, then
all participants must be notified of such Maximum Share Amount not less than
fifteen (15) days prior to the commencement of the next Offering Period. Once
the Maximum
iv
<PAGE> 5
Share Amount is set, it shall continue to apply with respect to all succeeding
Purchase Dates and Offering Periods unless revised by the Board as set forth
above.
(d) If the number of shares to be purchased on a Purchase Date by all
employees participating in this Plan exceeds the number of shares then available
for issuance under this Plan, then the Company will make a pro rata allocation
of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the Board shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares to
be purchased under a participant's option to each participant affected thereby.
(e) Any payroll deductions accumulated in a participant's account which
are not used to purchase stock due to the limitations in this Section 10 shall
be returned to the participant as soon as practicable after the end of the
applicable Purchase Period, without interest.
11. WITHDRAWAL.
(a) Each participant may withdraw from an Offering Period under this
Plan by signing and delivering to the Legal Department a written notice to that
effect on a form provided for such purpose. Such withdrawal may be elected at
any time at least fifteen (15) days prior to the end of a Purchase Period.
(b) Upon withdrawal from this Plan, the accumulated payroll deductions
shall be returned to the withdrawn participant, without interest, and his or her
interest in this Plan shall terminate. In the event a participant voluntarily
elects to withdraw from this Plan, he or she may not resume his or her
participation in this Plan during the same Offering Period, but he or she may
participate in any Offering Period under this Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth above for initial participation in
this Plan.
(c) As long as a participant is participating in the Plan as of the end
of an Offering Period and has not filed a notice of withdrawal as set forth
above, the Company will automatically enroll such participant in the subsequent
Offering Period. A participant does not need to file any forms with the Company
to automatically be enrolled in the subsequent Offering Period.
12. TERMINATION OF EMPLOYMENT. Termination of a participant's
employment for any reason, including retirement, death or the failure of a
participant to remain an eligible employee, immediately terminates his or her
participation in this Plan. In such event, the payroll deductions credited to
the participant's account will be returned to him or her or, in the case of his
or her death, to his or her legal representative, without interest. For purposes
of this Section 12, an employee will not be deemed to have terminated employment
or failed to remain in the continuous employ of the Company in the case of sick
leave, military leave, or any other leave of absence approved by the Board;
provided that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.
13. RETURN OF PAYROLL DEDUCTIONS. In the event a participant's interest
in this Plan is terminated by withdrawal, termination of employment or
otherwise, or in the event this Plan is terminated by the Board, the Company
shall promptly deliver to the participant all payroll deductions credited to
such participant's account. No interest shall accrue on the payroll deductions
of a participant in this Plan.
14. CAPITAL CHANGES. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under this Plan which has not yet been
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<PAGE> 6
exercised and the number of shares of Common Stock which have been authorized
for issuance under this Plan but have not yet been placed under option
(collectively, the "RESERVES"), as well as the price per share of Common Stock
covered by each option under this Plan which has not yet been exercised, shall
be proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock of the Company resulting from a stock
split or the payment of a stock dividend (but only on the Common Stock) or any
other increase or decrease in the number of issued and outstanding shares of
Common Stock effected without receipt of any consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration".
Such adjustment shall be made by the Board, whose determination shall be final,
binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under this Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger or consolidation of the Company with or into another corporation,
each option under this Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the participant
shall have the right to exercise the option as to all of the optioned stock. If
the Board makes an option exercisable in lieu of assumption or substitution in
the event of a merger, consolidation or sale of assets, the Board shall notify
the participant that the option shall be fully exercisable for a period of
twenty (20) days from the date of such notice, and the option will terminate
upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation.
15. NONASSIGNABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under this Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.
16. REPORTS. Individual accounts will be maintained for each
participant in this Plan. Each participant shall receive promptly after the end
of each Purchase Period a report of his or her account setting forth the total
payroll deductions accumulated, the number of shares purchased, the per share
price thereof and the remaining cash balance, if any, carried forward to the
next Purchase Period or Offering Period, as the case may be.
17. DISPOSITION. Participants may only dispose of the shares purchased
in Purchase Periods pursuant to the Plan during two distinct one-month periods
which are May and November; however, if
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<PAGE> 7
Participants are otherwise prohibited from disposing of the shares purchased in
the Purchase Period during any such May or November (a "BLACK-OUT MONTH") due to
other restrictions (the "OTHER RESTRICITIONS"), such Participants shall be
permitted to sell the shares they were prohibited from selling during the
Black-Out Month during the next subsequent one month period during which there
are no Other Restrictions. The Board may change such periods, in accordance with
Section 25 below, but in no event shall the Board change such time periods upon
less than thirty (30) days notice. Each participant shall notify the Company if
the participant disposes of any of the shares purchased in any Purchase Period
pursuant to this Plan if such disposition occurs within two (2) years from the
Offering Date or within one (1) year from the Purchase Date on which such shares
were purchased (the "NOTICE PERIOD"). Unless such participant is disposing of
any of such shares during the Notice Period, such participant shall keep the
certificates representing such shares in his or her name (and not in the name of
a nominee) during the Notice Period. The Company may, at any time during the
Notice Period, place a legend or legends on any certificate representing shares
acquired pursuant to this Plan requesting the Company's transfer agent to notify
the Company of any transfer of the shares. The obligation of the participant to
provide such notice shall continue notwithstanding the placement of any such
legend on the certificates.
18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary, or restrict the right of the Company or
any Subsidiary to terminate such employee's employment.
19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have
equal rights and privileges with respect to this Plan so that this Plan
qualifies as an "employee stock purchase plan" within the meaning of Section 423
or any successor provision of the Code and the related regulations. Any
provision of this Plan which is inconsistent with Section 423 or any successor
provision of the Code shall, without further act or amendment by the Company or
the Board, be reformed to comply with the requirements of Section 423. This
Section 19 shall take precedence over all other provisions in this Plan.
20. NOTICES. All notices or other communications by a participant to
the Company under or in connection with this Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. TERM; STOCKHOLDER APPROVAL. After this Plan is adopted by the
Board, this Plan will become effective on the date that is the first Offering
Date after this Plan has been approved by the stockholders of the Company, in
any manner permitted by applicable corporate law, which shall be within twelve
(12) months after the date this Plan has been adopted by the Board. No purchase
of shares pursuant to this Plan shall occur prior to such stockholder approval.
This Plan shall continue until the earlier to occur of (a) termination of this
Plan by the Board (which termination may be effected by the Board at any time),
(b) issuance of all of the shares of Common Stock reserved for issuance under
this Plan, or (c) ten (10) years from the adoption of this Plan by the Board.
22. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
this Plan in the event of such participant's death subsequent to the end of an
Purchase Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under this Plan in the event
of such participant's death prior to a Purchase Date.
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<PAGE> 8
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under this Plan who is living at
the time of such participant's death, the Company shall deliver such shares or
cash to the executor or administrator of the estate of the participant, or if no
such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such shares or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange or automated quotation system upon which the shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
24. APPLICABLE LAW. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.
25. AMENDMENT OR TERMINATION OF THIS PLAN. The Board may at any time
amend, terminate or the extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may
any amendment make any change in an option previously granted which would
adversely affect the right of any participant, nor may any amendment be made
without approval of the stockholders of the Company obtained in accordance with
Section 21 hereof within twelve (12) months of the adoption of such amendment
(or earlier if required by Section 21) if such amendment would:
(a) increase the number of shares that may be issued under this Plan;
(b) change the designation of the employees (or class of employees)
eligible for participation in this Plan; or
(c) constitute an amendment for which stockholder approval is required
in order to comply with Rule 16b-3 (or any successor rule) of the Exchange Act.
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<PAGE> 1
EXHIBIT 4(d)
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK PLAN
On Command Corporation (the "Company"), a Delaware corporation, hereby
adopts the 1997 Non-employee Directors Stock Plan (the "Plan"), effective upon
the later to occur of: (i) affirmative vote of at least 50.1% of the Company's
stockholders and (ii) the a registration statement filed with the Securities and
Exchange Commission covering the shares subject to this Plan (as set forth in
Article II, Section 1 below) is effective or deemed effective, for the benefit
of its eligible Independent Directors (as such term is defined below).
The purposes of this Plan are as follows:
(1) To provide an additional incentive for Directors of the Company to
further the growth, development and financial success of the Company by
personally benefiting through the ownership of Company stock and rights which
recognize such growth, development and financial success.
(2) To enable the Company to obtain and retain the services of
Directors considered essential to the long range success of the Company by
offering them an opportunity to own stock in the Company and rights which will
reflect the growth, development and financial success of the Company.
ARTICLE I
DEFINITIONS
I.1 General. Wherever the following terms are used in this Plan they
shall have the meaning specified below, unless the context clearly indicates
otherwise.
I.2 "Board" shall mean the Board of Directors of the Company.
I.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
I.4 "Common Stock" shall mean the common stock of the Company, par
value $.01 per share, and any equity security of the Company issued or
authorized to be issued in the future, but excluding any warrants, options or
other rights to purchase Common Stock. Debt securities of the Company
convertible into Common Stock shall be deemed equity securities of the Company.
I.5 "Company" shall mean On Command Corporation, a Delaware
corporation.
I.6 "Corporate Transaction" shall mean any of the following
stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State in which the Company is incorporated, form a holding company or
effect a similar reorganization as to form whereupon this Plan and all Options
are assumed by the successor entity;
<PAGE> 2
(b) the sale, transfer, exchange or other disposition of all
or substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a), above; or
(c) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or person different from those who held such securities
immediately prior to such merger.
I.7 "Director" shall mean a member of the Board.
I.8 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
I.9 "Fair Market Value" of a share of Common Stock as of a given date
shall be (i) the mean between the highest and lowest selling price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any, on such date, or if shares were not traded on such date, then
on the closest preceding date on which a trade occurred, or (ii) if Common Stock
is not traded on an exchange, the mean between the closing representative bid
and asked prices for the Common Stock on such date as reported by NASDAQ or, if
NASDAQ is not then in existence, by its successor quotation system; or (iii) if
Common Stock is not publicly traded, the Fair Market Value of a share of Common
Stock as established by the Board acting in good faith.
I.10 "Independent Director" shall mean a Director who is not an
employee of the Company nor an officer or employee of Ascent Entertainment
Group, Inc. or COMSAT Corporation so long as Ascent Entertainment, Inc. or
COMSAT Corporation, respectively, directly or indirectly holds 50% or more of
the outstanding Common Stock.
I.11 "Option" shall mean a stock option granted under Article III of
this Plan.
I.12 "Optionee" shall mean an Independent Director granted an Option
under this Plan.
I.13 "Plan" shall mean the 1997 Non-employee Directors Stock Plan.
I.14 "Registration Statement" shall mean the Company's Form S-8
Registration Statement to be filed with the Securities and Exchange Commission
in connection with this Plan.
I.15 "Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.
I.16 "Stock Award" shall mean an award of shares of Common Stock.
I.17 "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
I.18 "Termination of Directorship" shall mean the time when an Optionee
ceases to be a Director for any reason, including, but not by way of limitation,
a termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship.
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<PAGE> 3
ARTICLE II
SHARES SUBJECT TO PLAN
II.1 Shares Subject to Plan. The shares of stock subject to Options and
Stock Awards shall be Common Stock, initially shares of the Company's Common
Stock, par value $.01 per share. The aggregate number of such shares which may
be issued upon exercise of such options or upon any such awards under the Plan
shall not exceed 110,000 (One hundred ten thousand).
II.2 Unexercised Options. If any Option expires or is cancelled without
having been fully exercised, the number of shares subject to such Option but as
to which such Option was not exercised prior to its expiration or cancellation
may again be optioned hereunder, subject to the limitations of Section II.1.
ARTICLE III
GRANTING OF OPTIONS
III.1 Eligibility. Each Independent Director of the Company shall be
eligible to be granted Options at the times and in the manner set forth in
Section III.2.
III.2 Granting of Options
(a) On the date that the Company's Registration Statement is
declared or deemed to be effective by the Securities Exchange Commission, each
individual then serving as an Independent Director (or nominated for election at
the first shareholder's meeting to elect Directors following such date) shall be
granted an Option to acquire 4,000 shares of Common Stock.
(b) As of the close of each annual shareholder's meeting at
which Directors are elected, each individual then serving as an Independent
Director shall be granted an Option to acquire 4,000 shares of Common Stock.
ARTICLE IV
TERMS OF OPTIONS
IV.1 Option Agreement. Each Option shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Optionee and an
authorized officer of the Company and which shall contain such terms and
conditions as the Board shall determine, consistent with this Plan.
IV.2 Option Price. The price per share of the shares subject to each
Option shall be the Fair Market Value of a share of Common Stock on the date of
grant of the Option.
IV.3 Option Term. The term of an Option shall be ten (10) years from
the date the Option is granted.
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<PAGE> 4
IV.4 Option Vesting
(a) Except as set forth below in subsection (b), each Option
shall vest as follows:
<TABLE>
<CAPTION>
PERCENT OF OPTION
TIME FROM GRANT DATE WHICH IS EXERCISABLE
- -------------------- --------------------
<S> <C>
Prior to the first anniversary of the Grant Date 0%
On the first anniversary of the Grant Date 25%
On the second anniversary of the Grant Date 50%
On the third anniversary of the Grant Date 100%
</TABLE>
(b) No portion of an Option which is unexercisable at
Termination of Directorship shall thereafter become exercisable.
IV.5 Consideration. In consideration of the granting of an Option, the
Optionee shall agree, in the written Stock Option Agreement, to serve as an
Independent Director of the Company or any Subsidiary until the next annual
meeting of stockholders of the Company. Nothing in this Plan or in any Stock
Option Agreement hereunder shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
ARTICLE V
EXERCISE OF OPTIONS
V.1 Partial Exercise. An exercisable Option may be exercised in whole
or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Board may require that, by the terms of the Option, a
partial exercise be with respect to a minimum number of shares.
V.2 Manner of Exercise. All or a portion of an exercisable Option shall
be deemed exercised upon delivery of all of the following to the Secretary of
the Company or his/her office:
(a) A written notice complying with the applicable rules
established by the Board stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion;
(b) Such representations and documents as the Board, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Board 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-
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<PAGE> 5
transfer notices to agents and registrars;
(c) In the event that the Option shall be exercised pursuant
to Section X.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
(d) Full cash payment to the Secretary of the Company for the
shares with respect to which the Option, or portion thereof, is exercised.
However, at the discretion of the Board the terms of the Option may (i) allow a
delay in payment up to thirty (30) days from the date the Option, or portion
thereof, is exercised; (ii) allow payment, in whole or in part, through the
delivery of shares of Common Stock owned by the Optionee for a period of not
less than six months, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the delivery of property of any kind which constitutes good and
valuable consideration; (iv) allow payment, in whole or in part, through the
delivery of a full recourse promissory note bearing interest (at no less than
such rate as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Board, or (v) allow payment
through any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii) and (iv). In the case of a promissory note, the Board
may also prescribe the form of such note and the security to be given for such
note. The Option may not be exercised, however, 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.
V.3 Certain Timing Requirements. At the discretion of the Board, 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, 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.
V.4 Conditions to Issuance of Stock Certificates. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other qualification
of such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body which the Board shall, in its absolute discretion, deem
necessary or advisable;
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable;
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<PAGE> 6
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Board may establish from time to time for reasons
of administrative convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.
V.5 Rights as Stockholders. The holders of Options shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.
V.6 Ownership and Transfer Restrictions. The Board, in its discretion,
may impose such restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares.
V.7 Limitations on Exercise of Options. No Option may be exercised to
any extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the
Optionee's death;
(b) the expiration of twelve (12) months from the date of the
Optionee's Termination of Directorship by reason of his/her permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the
Optionee's Termination of Directorship for any reason other than such Optionee's
death or his/her permanent and total disability, unless the Optionee dies within
said three-month period;
(d) a Corporate Transaction; provided, however, that any
Option granted or deemed regranted within six months of such Corporate
Transaction shall remain exercisable until the expiration of six months and one
day from the later of the date such Option was granted or the date such Option
was deemed regranted; or
(e) The expiration of ten years from the date the Option was
granted.
ARTICLE VI
STOCK AWARDS
VI.1 Eligibility. Each Independent Director of the Company shall be
eligible to be granted Stock Awards at the times and in the manner set forth in
Section VI.2.
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<PAGE> 7
VI.2 Granting of Stock Awards
(a) On the date that the Company's Registration Statement is
declared or deemed to be effective by the Securities Exchange Commission, each
individual then serving as an Independent Director (or nominated for election at
the first shareholder's meeting to elect Directors following such date) shall be
granted a Stock Award of 400 shares of Common Stock.
(b) As of the close of each annual shareholder's meeting at
which Directors are elected, each individual then serving as an Independent
Director shall be granted a Stock Award of 400 shares of Common Stock.
ARTICLE VII
ADMINISTRATION
VII.1 Duties and Powers of Board. It shall be the duty of the Board to
conduct the general administration of this Plan in accordance with its
provisions. The Board shall have the power to interpret this Plan and the
agreements pursuant to which Options are granted, and to adopt such rules for
the administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules. Any such
grant under this Plan need not be the same with respect to each Optionee.
VII.2 Majority Rule. The Board shall act by a majority of its members
in attendance at a meeting at which a quorum is present or by a memorandum or
other written instrument signed by all members of the Board.
VII.3 Compensation; Professional Assistance; Good Faith Actions. All
expenses and liabilities which members of the Board incur in connection with the
administration of this Plan shall be borne by the Company. The Board may, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Board, the Company and the Company's officers and Directors shall be entitled to
rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Board in good faith
shall be final and binding upon all Optionees, the Company and all other
interested persons. No members of the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to this
Plan or Options, and all members of the Board shall be fully protected by the
Company in respect of any such action, determination or interpretation.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
VIII.1 Not Transferable. Options under this Plan may not be sold,
pledged, assigned, or transferred in any manner other than by will or the laws
of descent and distribution. No Option or interest or right therein shall be
liable for the debts, contracts or engagements of the Optionee or his/her
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation,
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<PAGE> 8
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.
During the lifetime of the Optionee, only he may exercise an Option (or
any portion thereof) granted to him under the Plan. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when such
portion becomes unexercisable under the Plan or the applicable Stock Option
Agreement, be exercised by his/her 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.
VIII.2 Amendment, Suspension or Termination of this Plan. Unless sooner
terminated under this Section VIII.2, the Plan will terminate after the
expiration of ten years from the date the Registration Statement is declared or
deemed to be effective by the Securities and Exchange Commission. The Plan may
be wholly or partially amended or otherwise modified, suspended or terminated at
any time or from time to time by the Board. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board, no action of the Board may, except as provided in Section VII.3,
increase the limits imposed in Section II.1 on the maximum number of shares
which may be issued under this Plan, and no action of the Board may be taken
that would otherwise require stockholder approval as a matter of applicable law,
regulation or rule. Notwithstanding the foregoing, except as permitted by the
applicable exemptive conditions of Rule 16b-3, the provisions of this Plan
relating to formula grants of Options and Stock Awards to Directors, including
the amount, price and timing thereof, shall not be amended more than once in any
six-month period other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the respective rules
thereunder. No amendment, suspension or termination of this Plan shall, without
the consent of the holder of Options and Stock Awards, alter or impair any
rights or obligations under any Options or Stock Awards theretofore granted,
unless the award itself otherwise expressly so provides. No Options or Stock
Awards may be granted during any period of suspension or after termination of
this Plan.
VIII.3 Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.
(a) Subject to Section VIII.3(e), in the event that the Board
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, or exchange of Common Stock or
other securities of the Company, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
corporate transaction or event, in the Board's sole discretion, affects the
Common Stock such that an adjustment is determined by the Board to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option or Stock Award then the Board shall, in such manner as it may deem
equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or
other securities or property) with respect to which Options may be granted under
the Plan, or which may be granted as Stock Awards (including, but not limited
to, adjustments of the limitations in Section II.1 on the
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<PAGE> 9
maximum number and kind of shares which may be issued),
(ii) the number and kind of shares of Common Stock
(or other securities or property) subject to outstanding Options and in the
number and kind of shares of outstanding Stock Awards, and
(iii) the grant or exercise price with respect to
any Option.
(b) Subject to Section VIII.3(e), in the event of any
corporate transaction or other event described in Section VIII.3(a) which
results in shares of Common Stock being exchanged for or converted into cash,
securities (including securities of another corporation) or other property, the
Board will have the right to terminate this Plan as of the date of the event or
transaction, in which case all Options and Stock Awards granted under this Plan
shall become the right to receive such cash, securities or other property, net
of any applicable exercise price.
(c) Subject to Sections VIII.3(c)(vii) and VIII.3(e), in the
event of any corporate transaction or other event described in Section VIII.3(a)
or any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Board in its discretion is hereby authorized to take any one or
more of the following actions whenever the Board determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Option or Stock Award under this Plan, to facilitate such transactions or
events or to give effect to such changes in laws, regulations or principles:
(i) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Board may provide, either
automatically or upon the Optionee's request, for either the purchase of any
such Option for an amount of cash equal to the amount that could have been
attained upon the exercise of such Option or realization of the Optionee's
rights had such Option been currently exercisable or payable or the replacement
of such Option or Stock Award with other rights or property selected by the
Board in its sole discretion;
(ii) In its sole and absolute discretion, the Board
may provide, either by the terms of such Option or by action taken prior to the
occurrence of such transaction or event that it cannot be exercised after such
event;
(iii) In its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, the Board may provide, either
by the terms of such Option or by action taken prior to the occurrence of such
transaction or event, that for a specified period of time prior to such
transaction or event, such Option shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in (i) Section IV.4 or (ii)
the provisions of such Option;
(iv) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Board may provide, either by
the terms of such Option or Stock Award or by action taken prior to the
occurrence of such transaction or event, that upon such event, such option,
right or award be assumed by the successor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights or
awards covering the stock of the successor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices; and
ix
<PAGE> 10
(v) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Board may make adjustments in
the number and type of shares of Common Stock (or other securities or property)
subject to outstanding Options, and in the number and kind of outstanding Stock
Awards and/or in the terms and conditions of (including the grant or exercise
price), and the criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future.
(vi) In its sole and absolute discretion, and on such
terms and conditions as it deems appropriate, the Board may provide either by
the terms of a Stock Award or by action taken prior to the occurrence of such
event that, for a specified period of time prior to such event, the restrictions
imposed under a Stock Award Agreement upon some or all shares of the Stock Award
may be terminated.
(vii) None of the foregoing discretionary terms of
this Section VIII.3(c) shall be permitted with respect to Options and Stock
Awards to the extent that such discretion would be inconsistent with the
requirements of Rule 16b-3. In the event of a Corporate Transaction, to the
extent that the Board does not have the ability under Rule 16b-3 to take or to
refrain from taking the discretionary actions set forth above, each Option shall
be exercisable as to all shares covered thereby during the five days immediately
preceding the consummation of such Corporate Transaction and subject to such
consummation, notwithstanding anything to the contrary in Section IV.4 and
except as provided in Section V.7(d), Options cannot be exercised following such
event.
(d) Subject to Section VIII.3(e) and VIII.8, the Board may, in
its discretion, include such further provisions and limitations in any Option or
Stock Award agreement or certificate, as it may deem equitable and in the best
interests of the Company.
(e) No adjustment or action described in this Section VIII.3
or in any other provision of the Plan shall be authorized to the extent that
such adjustment or action would violate Section 16 or the exemptive conditions
of Rule 16b-3. The number of shares of Common Stock subject to any option, right
or award shall always be rounded to the next whole number.
VIII.4 Approval of Plan by Stockholders. This Plan will be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan. Options and Stock Awards may
be granted prior to such stockholder approval, provided that such Options shall
not be exercisable prior to the time when this Plan is approved by the
stockholders, and provided further that if such approval has not been obtained
at the end of said twelve-month period, all Options and Stock Awards previously
granted under this Plan shall thereupon be cancelled and become null and void.
VIII.5 Forfeiture Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to awards under the Plan, the
Board shall have the right (to the extent consistent with the requirements of
Rule 16b-3) to provide, in the terms of Options or other awards made under the
Plan, or to require the recipient to agree by separate written instrument, that
(a) any proceeds, gains or other economic benefit actually or constructively
received by the recipient upon any receipt or exercise of the award, or upon the
receipt or resale of any Common Stock underlying such award, must be paid to the
Company, and (b) the award shall terminate and any unexercised portion of such
award (whether or not vested) shall be forfeited, if (i) a Termination of
Directorship occurs prior to a specified date, or within a specified time period
following receipt or exercise of the award, or (ii) the
x
<PAGE> 11
recipient at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Board.
VIII.6 Limitations Applicable to Section 16 Persons. Notwithstanding
any other provision of this Plan, the Plan and any Option or Stock Award granted
to a Director who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan, Options and Stock
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.
VIII.7 Effect of Plan Upon Options and Compensation Plans. The adoption
of this Plan shall not affect any other compensation or incentive plans in
effect for the Company or any Subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for employees or Directors of the Company or any
Subsidiary or (ii) to grant or assume options or other rights otherwise than
under this Plan in connection with any proper corporate purpose including but
not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm or association.
VIII.8 Compliance with Laws. This Plan, the granting and vesting of
Options under this Plan and the issuance and delivery of shares of Common Stock
under Options or Stock Awards granted hereunder are subject to compliance with
all applicable federal and state laws, rules and regulations (including but not
limited to state and federal securities law and federal margin requirements) and
to such approvals by any listing, regulatory or governmental authority as may,
in the opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall be subject
to such restrictions, and the person acquiring such securities shall, if
requested by the Company, provide such assurances and representations to the
Company as the Company may deem necessary or desirable to assure compliance with
all applicable legal requirements. To the extent permitted by applicable law,
the Plan, Options and Stock Awards granted hereunder shall be deemed amended to
the extent necessary to conform to such laws, rules and regulations.
VIII.9 Titles. Titles are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of this Plan.
VIII.10 Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
xi
<PAGE> 1
EXHIBIT 4(e)
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
DIRECTORS NONQUALIFIED STOCK OPTION GRANT
This Stock Option Grant (this "GRANT") is made and entered into as of
the date of grant set forth below (the "DATE OF GRANT") by and between On
Command Corporation, a Delaware corporation (the "COMPANY"), and the Optionee
named below ("OPTIONEE").
-----------------------------------------
Optionee:
-----------------------------------------
Optionee's Address:
-----------------------------------------
Total Shares Subject to Option: 4,000
-----------------------------------------
Exercise Price Per Share:
-----------------------------------------
Date of Grant:
-----------------------------------------
Expiration Date:
-----------------------------------------
1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(this "OPTION") to purchase up to the total number of shares of Common Stock of
the Company set forth above (collectively, the "SHARES") at the exercise price
per share set forth above (the "EXERCISE PRICE"), subject to all of the terms
and conditions of this Grant and the Company's 1997 Non-Employee Directors Stock
Option Plan (the "PLAN"). Unless otherwise defined herein, capitalized terms
used herein shall have the meanings ascribed to them in the Plan.
2. EXERCISE AND VESTING OF OPTION. Subject to the terms and conditions
of the Plan and this Grant, this Option shall become exercisable as it vests.
Subject to the terms and conditions of the Plan and this Grant, this Option
shall vest as to twenty-five percent (25%) of the Shares on the first
anniversary of the Date of Grant, as to twenty-five percent (25%) of the Shares
on the second anniversary of the Date of Grant and as to fifty percent (50%) of
the Shares on the third anniversary of the Date of Grant so long as the Optionee
continuously remains a member of the Board of Directors (a "BOARD MEMBER") of
the Company.
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless
such exercise is in compliance with the Securities Act, and all applicable state
securities laws, as they are in effect on the date of exercise, and the
requirements of any stock exchange or national market system on which the
Company's Common Stock may be listed at the time of exercise. Optionee
understands that the Company is under no obligation to register, qualify or list
the Shares with the SEC, any state securities commission or any stock exchange
or national market system to effect such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section,
this Option shall terminate if Optionee ceases to be a Board
<PAGE> 2
Member of the Company. The date on which Optionee ceases to be a Board Member of
the Company shall be referred to as the "TERMINATION DATE." No portion of an
Option which is unexercisable at the Termination Date will thereafter become
exercisable.
4.1 Termination Generally. If Optionee ceases to be a Board
Member of the Company for any reason except death or permanent and total
disability, then this Option, to the extent (and only to the extent) that it
would have been exercisable by Optionee on the Termination Date, may be
exercised by Optionee within three (3) months after the Termination Date, or, if
the Optionee dies within such three-month period, may be exercised by the
Optionee's legal representative within twelve (12) months after the Optionee's
death but in no event later than the Expiration Date.
4.2 Death or Disability. If Optionee ceases to be a Board Member
of the Company because of the death of Optionee or the permanent and total
disability of Optionee within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended, then this Option, to the extent (and only to
the extent) that it would have been exercisable by Optionee on the Termination
Date, may be exercised by Optionee (or Optionee's legal representative) within
twelve (12) months after the Termination Date, but in no event later than the
Expiration Date.
4.3 Corporate Transaction. This Option shall terminate upon the
occurrence of a Corporate Transaction, as defined in the Plan; provided however
that any Option granted or deemed regranted within six months of such Corporate
Transaction shall remain exercisable until the expiration of six months and one
day from the later of the date such Option was granted or the date such Option
was deemed regranted.
5. MANNER OF EXERCISE.
5.1 Exercise Agreement. This Option shall be exercisable by
Optionee (or, in the case of exercise after Optionee's death or incapacity,
Optionee's executor, administrator, heir or legatee, as the case may be)
delivery to the Company of an executed written Directors Stock Option Exercise
Agreement in the form attached hereto as Exhibit A, or in such other form as may
be approved by the Board, which shall set forth Optionee's election to exercise
some or all of this Option, the number of shares being purchased, any
restrictions imposed on the Shares and such other representations and agreements
as may be required by the Company to comply with applicable securities laws. If
someone other than Optionee exercises the Option, then such person must submit
documentation reasonably acceptable to the Company that such person has the
right to exercise the Option.
5.2 Payment. Payment for the Shares purchased upon exercise of
this Option may be made (a) in cash or by check; (b) by surrender of shares of
Common Stock of the Company that have been owned by Optionee for more than six
(6) months (and which have been paid for within the meaning of SEC Rule 144 and,
if such shares were purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares), having a Fair Market
Value equal to the Exercise Price of the Option; (c) by waiver of compensation
due or accrued to Optionee for services rendered; (d) provided that a public
market for the Company's stock exists, through a "same day sale" commitment from
the Optionee and a broker-dealer that is a member of the National Association of
Securities Dealers (an "NASD DEALER") whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company; (e)
provided that a public market for the Company's stock exists, through a "margin"
commitment from the Optionee and a NASD Dealer whereby the Optionee irrevocably
elects to exercise the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company; (f) [OPTIONAL AT THE DISCRETION OF THE BOARD:] THROUGH THE DELIVERY OF
A FULL RECOURSE PROMISSORY NOTE BEARING INTEREST (AT NO LESS THAN SUCH RATE AS
SHALL THEN PRECLUDE THE IMPUTATION OF INTEREST UNDER THE INTERNAL REVENUE CODE
OF 1986) AND PAYABLE ON SUCH
2
<PAGE> 3
TERMS AS MAY BE PRESCRIBED BY THE BOARD; or (g) by any combination of the
foregoing, provided that the par value of the shares shall be paid in cash or by
check.
5.3 Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee shall pay or make adequate provision for any
applicable federal or state withholding obligations of the Company. If the Board
permits, Optionee may provide for payment of withholding taxes upon exercise of
the Option by requesting that the Company retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case, the
Company shall issue the net number of Shares to the Option by deducting the
Shares retained from the Shares issuable upon exercise.
5.4 Issuance of Shares. Provided that such notice and payment
are in form and substance satisfactory to counsel for the Company, the Company
shall cause the Shares to be issued in the name of Optionee or Optionee's legal
representative. To enforce any restrictions on Optionee's Shares, the Committee
may require Optionee to deposit all certificates, together with stock powers or
other instruments of transfer approved by the Committee appropriately endorsed
in blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee may
cause a legend or legends referencing such restrictions to be placed on the
certificates.
6. NONTRANSFERABILITY OF OPTION. During the lifetime of the Optionee,
this Option shall be exercisable only by Optionee, unless otherwise permitted by
the Board. This Option may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of
descent and distribution.
7. TAX CONSEQUENCES. Set forth below is a brief summary as of the Date
of Grant of some of the federal and California tax consequences of exercise of
the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THIS SUMMARY
DOES NOT ADDRESS IN ANY MANNER TAX CONSEQUENCES IN COUNTRIES OTHER THAN THE
UNITED STATES. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.
8. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the
rights of a shareholder with respect to any Shares until Participant exercises
the Option and pays the Exercise Price.
9. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Board that
administers the Plan, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Board shall be final and
binding on the Company and on Optionee.
10. TENURE AS BOARD MEMBER. In consideration of the granting of this
Option, the Optionee agrees to serve as an Independent Director as defined under
the terms of the Plan until the next annual meeting of the stockholders of the
Company. However, nothing in the Plan or this Grant shall confer on Optionee any
right to continue as a Board Member, and the Company expressly reserves its
rights to discharge Optionee at any time for any reason whatsoever, with or
without good cause.
11. ENTIRE AGREEMENT. The Plan and the Directors Stock Option Exercise
Agreement in the form attached hereto as Exhibit A, and the terms and conditions
thereof, are incorporated herein by reference. This Grant, the Plan and the
Directors Stock Option Exercise Agreement constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior understandings and agreements with respect to such
subject matter.
3
<PAGE> 4
12. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by facsimile, rapifax or telecopier.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer set forth herein, this Agreement shall be binding
upon Optinee and Optionee's heirs, executors, administrators, legal
representatives, successors and assigns.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California. If any provision of this Agreement is determined by
a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.
ON COMMAND CORPORATION
By: __________________________________
Name: _________________________________
Title: _______________________________
4
<PAGE> 5
ACCEPTANCE OF STOCK OPTION GRANT
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the Plan and this
Grant. Optionee acknowledges that there may be adverse tax consequences upon
exercise of this Option or disposition of the Shares and that Optionee has been
advised by the Company that Optionee should consult a qualified tax advisor
prior to such exercise or disposition.
- --------------------------------------------------------------------------------
- --------------------------
-----------------------------------, Optionee
[ACCEPTANCE SIGNATURE PAGE TO 1997 NON-EMPLOYEE
DIRECTORS NONQUALIFIED INITIAL STOCK OPTION GRANT]
5
<PAGE> 6
EXHIBIT A
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION EXERCISE AGREEMENT
<PAGE> 7
Exhibit A
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN (THE "PLAN")
DIRECTORS STOCK OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of ON COMMAND
CORPORATION (the "Company") as set forth below:
<TABLE>
<S> <C>
Optionee: _____________________________________ Number of Shares Purchased: _______________
Social Security Number: _______________________ Purchase Price per Share: _________________
Address: ______________________________________ Aggregate Purchase Price: _________________
_______________________________________________ Date of Stock Option Grant: _______________
Type of Stock Option: Nonqualified Stock Option Exact Name of Title to Shares: ____________
___________________________________________
</TABLE>
1. DELIVERY OF PURCHASE PRICE. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Directors Nonqualified
Stock Option Grant referred to above (the "Grant") as follows (check as
applicable and complete):
[ ] in cash or by check in the amount of $_____, receipt of which is
acknowledged by the Company;
[ ] by delivery of ____________ fully-paid, nonassessable and vested
shares of the Common Stock of the Company owned by Optionee for at
least six (6) months prior to the date hereof (and which have been paid
for within the meaning of SEC Rule 144) and owned free and clear of all
liens, claims, encumbrances or security interests, valued at the
current Fair Market Value of $_____ per share;
[ ] by the waiver hereby of compensation due or accrued to Optionee for
services rendered in the amount of $_____;
[ ] through a "same-day-sale" commitment, delivered herewith, from
Optionee and the NASD Dealer named therein, in the amount of $_____; or
[ ] through a "margin" commitment, delivered herewith from Optionee and
the NASD Dealer named therein, in the amount of $_____.
[ ] through the delivery of a full recourse promissory note acceptable to
the Board in the amount of $_____, secured by a Pledge Agreement of
even date herewith. The portion of the Purchase Price equal to the par
value of the Shares in the amount of $____ is in cash (by check),
receipt of which is acknowledged by the Company.
2. MARKET STANDOFF AGREEMENT. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements. Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.
3. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Plan and the Grant are incorporated herein by
reference. This Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior
understandings and agreements of the Company and Optionee with respect to the
subject matter hereof, and are governed by California law.
Date:____________________ ________________________________________
SIGNATURE OF OPTIONEE
<PAGE> 8
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
SPOUSE'S CONSENT
I acknowledge that I have read the foregoing Directors Stock Option
Exercise Agreement (the "Agreement") and that I know its contents. I hereby
consent to and approve all the provisions of the Agreement and agree that the
shares of the Common Stock of On Command Corporation purchased thereunder (the
"Shares") and any interest I may have in such Shares are subject to all the
provisions of the Agreement. I will take no action at any time to hinder
operation of the Agreement on these Shares or any interest I may have on them.
____________________________________ Date:__________________________
SIGNATURE OF OPTIONEE'S SPOUSE
____________________________________
OPTIONEE'S NAME - TYPED OR PRINTED
____________________________________
SPOUSE'S NAME - TYPED OR PRINTED
<PAGE> 9
NO. ____
ON COMMAND CORPORATION
1997 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
STOCK AWARD AGREEMENT
This Stock Award Agreement (this "AGREEMENT") is made and entered into
as of _______________, 19____ (the "EFFECTIVE DATE") by and between On Command
Corporation, a Delaware corporation (the "COMPANY"), and the participant named
below (the "PARTICIPANT"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Company's 1997 Non-Employee Directors Option
Plan (the "PLAN").
PARTICIPANT: _______________________________________
SOCIAL SECURITY NUMBER: _______________________________________
ADDRESS: _______________________________________
TOTAL NUMBER OF SHARES: _______________________________________
FAIR MARKET VALUE PER SHARE
AT THE EFFECTIVE DATE: _______________________________________
TOTAL FAIR MARKET VALUE
AT THE EFFECTIVE DATE: _______________________________________
TOTAL PAR VALUE
AT THE EFFECTIVE DATE: _______________________________________
1. GRANT OF SHARES.
1.1 GRANT OF SHARES. On the Effective Date and subject to the
terms and conditions of this Agreement and the Plan, and in consideration of
services rendered by Participant to the Company, and provided that the par value
of the shares shall be paid by Participant in cash (by check), the Company
hereby grants to Participant the Total Number of Shares set forth above of the
Company's Common Stock. As used in this Agreement, the term "SHARES" refers to
the shares purchased under this Agreement and includes all securities received
(a) as a result of stock dividends or stock splits in respect of the Shares and
(b) in replacement of the Shares, whether in a merger, recapitalization,
reorganization or similar corporate transaction.
1.2 TITLE TO SHARES. The exact spelling of the name(s) under
which Participant will take title to the Shares is:
________________________________________________________________
________________________________________________________________
Participant desires to take title to the Shares as follows:
[ ] Individual, as separate property
[ ] Husband and wife, as community property
[ ] Joint Tenants
<PAGE> 10
[ ] Alone or with spouse as trustee(s) of the
following trust (including date):
__________________________________________
__________________________________________
[ ] Other; please specify: ___________________
__________________________________________
2. DELIVERY.
2.1 DELIVERIES BY PARTICIPANT. Participant hereby delivers to
the Company (i) this Agreement executed by Participant and (ii) payment for the
par value of the Shares in cash or check.
2.2 DELIVERIES BY THE COMPANY. Upon its receipt of this
Agreement in form and substance satisfactory to counsel for the Company and cash
payment for the par value of the Shares, the Company will issue a duly executed
stock certificate evidencing the Shares in the name specified in Section 1.2
above.
3. REPRESENTATIONS AND WARRANTIES OF PARTICIPANT. Participant
represents and warrants to the Company that Participant has received a copy of
the Plan and this Agreement, has read and understands the terms of the Plan and
this Agreement and agrees to be bound by their terms and conditions.
4. RIGHTS AS STOCKHOLDER. Subject to the terms and conditions of
this Agreement, Participant will have all of the rights of a stockholder of the
Company with respect to the Shares from and after the date that the Shares are
issued until such time as Participant disposes of the Shares.
5. NO OBLIGATION TO CONTINUE AS DIRECTOR. Nothing in the Plan or
this Agreement shall confer on Participant any right to continue as a Director
of, or in any other relationship with, the Company or any Parent or Subsidiary
of the Company, or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant's relationship at any time,
with or without cause.
6. MARKET STANDOFF AGREEMENT. Participant, if requested by the
Company and an underwriter of Common Stock (or other securities) of the Company,
agrees not to sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company held by Participant during the period requested
by the managing underwriter following the effective date of a registration
statement of the Company filed under the Securities Act, provided that all
officers and directors of the Company are required to enter into similar
agreements. Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the shares (or other securities) subject to the foregoing
restriction until the end of such period.
7. TAXES.
7.1 TAX WITHHOLDING. Participant understands and acknowledges
that Participant must recognize ordinary income in the amount of the Total Fair
Market Value of the Shares on the Effective Date. Prior to the issuance of the
Shares, Participant must pay or provide for any applicable federal or state
withholding obligations of the Company. Participant may provide for payment of
withholding taxes by requesting the Company to retain Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the Participant by
deducting the Shares retained from the Total Number of Shares set forth above.
7.2 TAX CONSEQUENCES. PARTICIPANT UNDERSTANDS THAT PARTICIPANT
MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S ACQUISITION OR
DISPOSITION OF THE SHARES. PARTICIPANT REPRESENTS THAT PARTICIPANT HAS CONSULTED
WITH ANY TAX ADVISER PARTICIPANT DEEMS ADVISABLE IN CONNECTION
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WITH THE ACQUISITION OR DISPOSITION OF THE SHARES AND THAT PARTICIPANT IS NOT
RELYING ON THE COMPANY FOR ANY TAX ADVICE.
8. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
the Shares will be subject to and conditioned upon compliance by the Company and
Participant with all applicable state and federal laws and regulations and with
all applicable requirements of any stock exchange or automated quotation system
on which the Company's Common Stock may be listed or quoted at the time of such
issuance or transfer.
9. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware as such
laws are applied to agreements between Delaware residents entered into and to be
performed entirely within Delaware. If any provision of this Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain fully effective and enforceable.
10. NOTICES. Any notice required to be given or delivered to the
Company shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given or
delivered to Participant shall be in writing and addressed to Participant at the
address indicated above or to such other address as Participant may designate in
writing from time to time to the Company. All notices shall be deemed
effectively given upon personal delivery, three (3) days after deposit in the
United States mail by certified or registered mail (return receipt requested),
one (1) business day after its deposit with any return receipt express courier
(prepaid) or one (1) business day after transmission by fax or telecopier.
11. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
12. HEADINGS. The captions and headings of this Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Agreement. All references herein to Sections will refer to Sections of this
Agreement.
13. ENTIRE AGREEMENT. The Plan and this Agreement constitute the entire
agreement and understanding of the parties with respect to the subject matter of
this Agreement and supersede all prior understandings and agreements, whether
oral or written, between the parties hereto with respect to the specific subject
matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate as of the Effective Date.
ON COMMAND CORPORATION PARTICIPANT
By: ______________________________ ____________________________________
(Signature)
__________________________________ ____________________________________
(Please print name) (Please print name)
__________________________________
(Please print title)
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<PAGE> 1
EXHIBIT 5(a)
August 4, 1997
On Command Corporation
6331 San Ignacio Avenue
San Jose, California 95119
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, I have examined the Registration Statement on
Form S-8 (the "Registration Statement") to be filed by you with the Securities
and Exchange Commission on or about August 8, 1997 in connection with the
registration under the Securities Act of 1933, as amended, of an aggregate of
290,000 shares of Common Stock (the "Stock") subject to issuance by you in
connection with stock awards or purchase rights or upon the exercise of stock
options to be granted by you under your 1997 Employee Stock Purchase Plan (the
"Purchase Plan") and 1997 Non-Employee Directors Stock Plan (the "Directors
Plan").
In rendering this opinion, I have examined the following:
(1) the Registration Statement, together with the Exhibits filed
as a part thereof;
(2) the Prospectuses prepared in connection with the Registration
Statement; and
(3) copies of the minutes of meetings of the Company's Board of
Directors and stockholders relating to the adoption of the
Purchase Plan and Directors Plan.
In my examination of documents for purposes of this opinion, I have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to me as
originals, the conformity to originals of all documents submitted to me as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations, modifications, waivers or amendments to any
documents reviewed by me and the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, I have relied solely
upon my examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from records
included in the documents referred to above. I have made no independent
investigations or other attempts to verify the accuracy of any of such
information or to determine the existence or non-existence of any other factual
matters; however, I am not aware of any facts that would lead me to believe that
the opinion expressed herein is not accurate.
Based upon the foregoing, it is my opinion that the 290,000 shares of
Stock that may be issued and sold by you in connection with stock awards or
purchase rights or upon the exercise of stock options to be granted under the
Purchase Plan and Directors Plan when issued and sold in accordance with the
Purchase Plan and Directors Plan and agreements to be entered into thereunder
reflecting the stock awards, purchase rights or stock options, and in the manner
referred to in the relevant Prospectus associated with the Registration
Statement, will be legally issued, fully paid and nonassessable.
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I consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to me, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and is intended solely for your
use as an exhibit to the Registration Statement for the purpose of the above
sale of the Stock and is not to be relied upon for any purpose.
Very truly yours,
/s/ JILL E. FISHBEIN
--------------------------------------
Jill E. Fishbein
Senior Vice President, General Counsel
and Secretary
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EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of On Command Corporation of our report dated January 27, 1997 (March
27, 1997 as to Note 14), appearing in the Annual Report on Form 10-K of On
Command Corporation for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
San Jose, California
August 6, 1997
