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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1998
Commission File Number 0-19579
INTERACTIVE NETWORK, INC.
(Exact name of registrant as specified in its charter)
California 94-3025019
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation and organization)
1161 Old County Road, Belmont California 94002
----------------------------------------------
(Address of principal executive offices, including zip code)
(650) 508-8793
--------------
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value per share
(Title of class)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No X
___ ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based on the closing price of the Common Stock on March 15,
1999, as reported on the OTC Bulletin Board, by Dow Jones Interactive Quotes &
Market Data, was approximately $8,452,605. Shares of Common Stock held by each
officer and director and by each person who owns 5% or more of the outstanding
Common Stock have been excluded from this computation in that such persons may
be deemed to be affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.
As of March 15, 1999 the Registrant had outstanding 30,840,441 shares of
Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Registrant's Annual Report to Stockholders for the fiscal
year ended December 31, 1998, are incorporated by reference into Parts I, II and
III of this Form 10-K Report. With the exception of those portions which are
incorporated by reference, the Registrant's 1998 Annual Report is not deemed
filed as part of this Report.
2. Portions of the Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on March 31, 1999, are incorporated by reference in
Parts I and III of this Form 10-K Report.
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INDEX
INTERACTIVE NETWORK, INC.
<TABLE>
<CAPTION>
Page No.
--------
PART I
<S> <C> <C>
Item 1. BUSINESS.................................................. 4
Item 2. PROPERTIES................................................ 4
Item 3. LEGAL PROCEEDINGS......................................... 4
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....... 4
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS....................................... 4
Item 6. SELECTED FINANCIAL DATA................................... 4
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS....................... 5
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK............................................... 5
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............... 5
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.................... 5
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT........ 5
Item 11. EXECUTIVE COMPENSATION.................................... 6
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT............................................ 6
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............ 6
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K............................................... 6
SIGNATURES................................................ 8
</TABLE>
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PART I
Item 1. BUSINESS.
Pages 1-3 of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1998, and the section labeled "Certain Transactions --
Lawsuit and Settlement Agreement with Certain Principal Shareholders; Chapter 11
Bankruptcy Proceedings," appearing on pages 15-17 of the Registrant's Proxy
Statement for the Special Meeting of Shareholders held on March 31, 1999, are
incorporated herein by reference. As a condition to confirmation of Registrant's
plan of reorganization in its pending Chapter 11 Bankruptcy proceeding, the
Bankruptcy Court has asked that Registrant furnish assurance that creditors to
whose claims Registrant is objecting in the Bankruptcy proceeding will be paid
if Registrant's objections are not successful, by establishing an escrow or
similar arrangement with an independent institution of a portion of the cash
proceeds received from the consummation of its Settlement Agreement totaling 75%
of disputed claims and a lien on income generated from its patent portfolio (but
not on the patents themselves). Subject to approving such arrangements, the
Bankruptcy Court has advised Registrant that its plan of reorganization will be
confirmed.
Item 2. PROPERTIES.
The Registrant's only physical property is approximately 1104 square feet
of subleased office space in Belmont, California.
Item 3. LEGAL PROCEEDINGS.
Paragraphs 1-3 of the section labeled "Other Contingencies and
Commitments -- Litigation Claims in Chapter 11 Proceedings which the Company is
Contesting and Contractual Commitments," appearing on pages 7-8 of the
Registrant's Annual Report to Shareholders for the year ended December 31, 1998
and the section labeled "Certain Transactions -- Lawsuit and Settlement
Agreement with Certain Principal Shareholders; Chapter 11 Bankruptcy
Proceedings," appearing on pages 15-17 of the Registrant's Proxy Statement for
the Special Meeting of Shareholders held on March 31, 1999, are incorporated
herein by reference.
Registrant originally filed an action in 1992, which it amended in December
1998, in the Federal Court of Canada against NTN Communications, Inc., NTN
Sports, Inc., and NTN Canada, Inc., for infringement of its Canadian Patent No.
1,274,903 and for damages and an injunction.
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS.
None.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The section labeled "Market Price, Dividends and Forward-Looking
Statements," "Holders of Record" and "Dividends," appearing on pages 10-11 of
the Registrant's Annual Report to Stockholders for the year ended December 31,
1998, is incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA.
The section labeled "Selected Financial Data," appearing on page 6 of the
Registrant's Annual Report to Stockholders for the year ended December 31, 1998,
is incorporated herein by reference.
4
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The section labeled "Management's Discussion and Analysis of Financial
Condition and Results of Operations," appearing on pages 6 through 10 of the
Registrant's Annual Report to Stockholders for the year ended December 31, 1998,
is incorporated herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Registrant has not entered into any derivative transactions that are
required to be disclosed herein.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements and related notes and independent
auditors' report, appearing on pages F-1 through F-16 of the Registrant's Annual
Report to Stockholders for the year ended December 31, 1998, are incorporated
herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information with respect to the
directors and executive officers of Interactive Network:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Bruce W. Bauer /(1)/ 48 Chairman of the Board of Directors,
President and Chief Executive
Officer of the Company
John J. Bohrer /(1)/ 76 Director, Secretary and Treasurer
of the Company
Donald D. Graham 64 Director
William H. Green 72 Director
William L. Groeneveld /(1)/ 33 Director
David B. Lockton /(2)/ 63 Director
</TABLE>
____________________
/(1)/ Member of the Executive Committee.
/(2)/ Mr. Lockton was not included on management's slate for election of
directors at the Special Meeting of Shareholders on March 31, 1999.
5
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The section labeled "Current Directors and Executive Officers of the
Company" appearing on page 5 of the Registrant's Annual Report to Shareholders
for the Year ended December 31, 1998 and the section labeled "Compliance with
Section 16(a) of the Securities Exchange Act of 1934" appearing on page 8 of the
Registrant's Proxy Statement for the Special Meeting of Shareholders held on
March 31, 1999, are incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION.
The section labeled "Executive Compensation," appearing on pages 9 through
14 of the Registrant's Proxy Statement for the Special Meeting of Shareholders
held on March 31, 1999, is incorporated herein by reference. The Registrant
follows a practice of compensating directors through grants of stock options
rather than payment of fees for attendance at meetings.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The section labeled "Principal Shareholders and Share Ownership by
Management," appearing on pages 7 and 8 of the Registrant's Proxy Statement for
the Special Meeting of Shareholders held on March 31, 1999, is incorporated
herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The section labeled "Certain Transactions," appearing on pages 15 through
21 of the Registrant's Proxy Statement for the Special Meeting of Shareholders
held on March 31, 1999, is incorporated herein by reference.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Report:
(1) Financial Statements.
The Financial Statements and Independent Auditors' Report, appearing at
pages F-1 through F-16 of the Registrant's Annual Report for the fiscal years
ended December 31, 1998, 1997, and 1996, are hereby incorporated by reference.
(2) Financial Statement Schedules.
Not applicable.
All other financial statement schedules are omitted because they are not
applicable or not required, or because the required information is presented in
the financial statements or related notes, or such amounts are immaterial.
(3) Exhibits.
The exhibits listed on the accompanying Exhibit Index are filed as part of,
or are incorporated by reference into, this Report. The exhibits include the
following executive compensation plans and arrangements:
1999 Stock Option Plan -- Exhibit 10.8.
Form of Stock Option Agreement -- Exhibit 10.9.
6
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Employment Agreement between the Co0mpany and David B. Lockton dated
January 1, 1991--Exhibit 10.6(a)--and Rider thereto -- Exhibit 10.6(b).
Deferred Compensation and Non-Competition Agreement between the Company and
David B. Lockton dated December 10, 1994--Exhibit 10.7.
Employment Agreement between the Company and Bruce Bauer dated June 14,
1998--Exhibit 10.22.
(b) Reports on Form 8-K.
The Company filed the following report on Form 8-K during the quarter ended
December 31, 1998:
Report dated December 23, 1998, filed with the Commission on December 22,
1998 -- describing filing of Plan of Reorganization and related Settlement
Agreement with the United States Bankruptcy Court for the Northern District of
California, and attaching copy of Plan of Reorganization and Settlement
Agreement and related press release and letter to shareholders.
7
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.
INTERACTIVE NETWORK, INC.
Dated: March 24, 1999 By /s/ Bruce W. Bauer
_______________________________________
Bruce W. Bauer, Chairman of the Board,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Bruce W. Bauer and John J. Bohrer, or either or
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any and all amendments to this Report on
Form 10-K, and to file the same, with all exhibits thereto and other 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 connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report on Form 10-K has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- -----
<S> <C> <C>
/s/ Bruce W. Bauer
______________________________ Director, Chairman of the Board, March 24, 1999
Bruce W. Bauer President and Chief Executive Officer
(Principal Executive, Financial and
Accounting Officer)
/s/ John J. Bohrer
_______________________________ Director, Secretary and Treasurer March 24, 1999
John J. Bohrer
/s/ Donald D. Graham
_______________________________ Director March 24, 1999
Donald D. Graham
/s/ William H. Green
_______________________________ Director March 26, 1999
William H. Green
/s/ William L. Groeneveld
_______________________________ Director March 24, 1999
William L. Groeneveld
_______________________________ Director March __, 1999
David B. Lockton
</TABLE>
8
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
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<C> <S>
2.1(a) Plan of Reorganization, filed by Registrant in the United States
Bankruptcy Court for the Northern District of California, and
attached Settlement Agreement with TeleCommunications, Inc.,
National Broadcasting Company, Inc., Motorola, Inc. and Sprint
Corporation (incorporated by reference to Exhibit 1.1 of Exhibits
to Registrant's Form 8-K, as filed with the Commission on
December 22, 1998)
2.1(b) First Amendment to Plan of Reorganization, filed by Registrant in
the United States Bankruptcy Court for the Northern District of
California on February 19, 1999 -- filed herewith
3.1 Amended and Restated Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 4.1 of Exhibits to
Registrant's Form S-8 Registration Statement, as filed with the
Commission on November 10, 1992)
3.2 Certificate of Determination of the Registrant, filed with the
California Secretary of State on September 20, 1994 (incorporated
by reference to Exhibit 3.3 of Exhibits to Registrant's Form 8-K
Report, as filed with the Commission on October 3, 1994)
3.3 Certificate of Amendment of Amended and Restated Articles of
Incorporation of Registrant, dated May 22, 1995 -- filed herewith
3.4(a) Bylaws of the Registrant, as amended (incorporated by reference
to Exhibit 4.2 of Exhibits to Registrant's Form S-8 Registration
Statement, as filed with the Commission on November 10, 1992)
3.4(b) Amendment to By-laws of the Registrant, dated February 26,
1999 -- filed herewith
4.1 Specimen Common Stock Certificate of the Registrant (incorporated
by reference to Exhibit 4.1 of Exhibits to Registrant's Form S-1
Registration Statement (No. 33-58780), filed with the Commission
on February 25, 1993)
+4.2 Note Purchase Agreement, dated as of September 19, 1994, by and
among the Registrant, TCI Sub, NBC, Motorola and Sprint, as
amended by a letter agreement, dated as of September 23, 1994
(incorporated by reference to Exhibit 4.2 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
October 3, 1994)
+4.3 Form of 12% Senior Secured Convertible Note (incorporated by
reference to Exhibit 4.3 of Exhibits to Registrant's Form 8-K
Report, as filed with the Commission on October 3, 1994)
+4.4 Amended and Restated Security Agreement, dated as of September
19, 1994, by and among the Registrant, TCI Sub, NBC, Motorola,
Sprint, and TDC (incorporated by reference to Exhibit 4.4 of
Exhibits to Registrant's Form 8-K Report, as filed with the
Commission on October 3, 1994)
</TABLE>
9
<PAGE>
9.1 Voting Trust Agreement, included in Settlement Agreement attached
as an Exhibit to the Plan of Reorganization, filed by Registrant
in the United States Bankruptcy Court for the Plan of
Reorganization, filed by Registrant in the United States
Bankruptcy Court for the Plan of Reorganization, filed by
Registrant in the United States Bankruptcy Court for the Plan of
Reorganization, filed by Registrant in the United States
Bankruptcy Court for the Northern District of California
(incorporated by reference to Exhibit 1.1 of Exhibits to
Registrant's Form 8-K, as filed with the Commission on December
22, 1998)
*10.1 Sale of Patent Agreement, between the Registrant and David B.
Lockton, dated November 18, 1986, and amendments thereto, dated
December 21, 1987 and July 30, 1990
+*10.2 Shareholders' Agreement, dated December 21, 1987, by and among
the Registrant and the purchasers of its Series A Preferred Stock
(Exhibit 10.3 of Registration Statement)
+*10.3(a) Joint Development Agreement, between the Registrant and National
Broadcasting Company, Inc., dated December 21, 1987, and
amendment thereto, dated February 13, 1988 (Exhibit 10.8 of
Registration Statement)
+10.3(b) Second Amendment, dated as of September 19, 1994, to the Joint
Development Agreement, dated as of December 21, 1987, between the
Registrant and National Broadcasting Company, Inc. (incorporated
by reference to Exhibit 10.58 of Exhibits to Registrant's
Form 8-K Report, as filed with the Commission on October 3, 1994)
+*10.4(a) Warrant Agreement, between the Registrant and National
Broadcasting Company, Inc., dated December 21, 1987, and
amendments thereto, dated February 13, 1989 and August 19, 1991
(Exhibit 10.9 of Registration Statement)
+10.4(b) Amended and Restated Warrant Agreement, dated as of September 19,
1994, between the Registrant and National Broadcasting Company,
Inc. (incorporated by reference to Exhibit 10.57 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
October 3, 1994)
*10.5 Settlement Agreement and Covenant Not to Sue, between the
Registrant and NTN Communications, Inc., dated April 1987, and
attached Patent License Agreement (Exhibit 10.17 of Registration
Statement)
*10.6(a) Employment Agreement, between the Registrant and David B.
Lockton, dated January 1, 1991 (Exhibit 10.22 of Registration
Statement)
10.6(b) Rider to Employment Agreement, between the Registrant and David
B. Lockton, dated December 10, 1994 (incorporated by reference to
Exhibit 10.54 to the Annual Report of the Registrant on Form 10-K
for the year ended December 31, 1994)
10
<PAGE>
*10.7 Deferred Compensation and Non-Competition Agreement, between the
Registrant and David B. Lockton, dated December 10, 1994
(incorporated by reference to Exhibit 10.53 of Exhibit B to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994)
10.8 1999 Stock Option Plan (incorporated by reference to Exhibit A to
the Proxy Statement for the Special Meeting of Shareholders of
Registrant to be held on March 31, 1999 -- filed with the
Commission on March 15, 1999)
10.9 Form of Stock Option Agreement for use with the 1999 Stock Option
Plan -- filed herewith
*10.10 Form of Indemnification Agreement (Exhibit 10.27 of Form S-1
Registration Statement)
*10.11 Know-How License, dated September 29, 1992, between the
Registrant and Interactive Network Limited (incorporated by
reference to Exhibit 10.32 of Exhibits to Registrant's Form S-1
Registration Statement (No. 33-58780), filed with the Commission
on February 25, 1993)
10.12(a) Stock Purchase Agreement, dated December 2, 1992, among the
Registrant, Gannett Co., Inc. and David B. Lockton (incorporated
by reference to Exhibit 28.4 of Exhibits to Registrant's Form 8-K
Report, as filed with the Commission on December 17, 1992)
10.12(b) Waiver and Amendment of Stock Purchase Agreement, with Gannett
Co., Inc., dated September 22, 1994 -- filed herewith
+10.13 Stock Purchase Agreement, dated December 2, 1992, among the
Registrant, National Broadcasting Company, Inc., Rainbow
Programming Holdings, Inc., and David B. Lockton (incorporated by
reference to Exhibit 28.5 of Exhibits to Registrant's Form 8-K
Report, as filed with the Commission on December 17, 1992)
+10.14(a) Amended and Restated Stock Purchase Agreement, dated June 4,
1993, between the Registrant, TCI Development Corporation, and
David B. Lockton (incorporated by reference to Exhibit 10.38 of
Exhibits to Registrant's Form 8-K Report, filed with the
Commission on June 23, 1993)
+10.14(b) Amendment dated as of September 19, 1994 to Amended and Restated
Stock Purchase Agreement dated June 4, 1993 between the
Registrant, TCI Development Corporation and David B. Lockton
(incorporated by reference to Exhibit 10.59 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
October 3, 1994)
+10.15 Form of Common Stock Purchase Warrant (incorporated by reference
to Exhibit 10.52 of Exhibits to Registrant's Form 8-K Report, as
filed with the Commission on October 3, 1994)
11
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<TABLE>
<CAPTION>
<S> <C>
+10.16 Registration Rights Agreement, dated as of September 23, 1994, by
and among the Registrant, TCI Development Corporation, TCI
Programming Holding Company 111, the National Broadcasting
Company, Inc., Motorola, Inc., and Sprint Corporation
(incorporated by reference to Exhibit 10.53 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
October 3, 1994)
+10.17 Securityholders Agreement dated as of September 19, 1994 by and
among the Registrant, TCI Development Corporation, TCI
Programming Holding Company III, the National Broadcasting
Company, Inc., Motorola, Inc. and Sprint Corporation
(incorporated by reference to Exhibit 10.54 of Exhibits to
Registrant's Form 8-K Report, as filed with the Commission on
October 3, 1994)
+10.18 Letter Agreement, dated as of September 27, 1994, between the
Registrant and Motorola, Inc. (incorporated by reference to
Exhibit 10.55 of Exhibits to Registrant's Form 8-K Report, as
filed with the Commission on October 3, 1994)
+10.19 Letter Agreement, dated as of September 19, 1994, between the
Registrant and Sprint Corporation (incorporated by reference to
Exhibit 10.56 of Exhibits to Registrant's Form 8-K Report, as
filed with the Commission on October 3, 1994)
10.20 Form of Common Stock Purchase Warrant, dated March 30, 1995 and
expiring on March 20, 2000, evidencing right to purchase an
aggregate of 234,753 shares of Registrant's common stock -- filed
herewith
10.21 Employment Agreement, between the Registrant and Bruce Bauer,
dated June 14, 1998 -- filed herewith
13.1 Annual Report to Shareholders (incorporated by reference to the
Annual Report to Shareholders for the year ended December 31,
1998, as filed with the Commission on March 15, 1999)
25.1 Power of Attorney. Reference is made to page 8 of this Report
99.1 Definitive Proxy Statement for Special Meeting of Shareholders,
to be held on March 31, 1999 (incorporated by reference to the
Definitive Proxy Statement, as filed with the Commission on March
15, 1999)
</TABLE>
- -----------------
12
<PAGE>
* Incorporated by reference to the Exhibits of corresponding number (unless
otherwise noted) to Registrant's Form S-1 Registration Statement
(No. 33-42951) filed with the Commission on September 24, 1991, as amended.
+ The operative effect of these documents will terminate upon consummation of
the Settlement Agreement described in Exhibit 2.1(a).
13
<PAGE>
EXHIBIT 2.1(b)
FILED
FEB 18 1998
KEENAN G. CASADY, CLERK
UNITED STATES BANKRUPTCY COURT
SAN FRANCISCO, CA
ADAM A. LEWIS (BAR. NO. 88736)
J. ROBERT NELSON (BAR NO. 51235)
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: (415) 268-7000
Attorneys for Debtor and Debtor in Possession
INTERACTIVE NETWORK, INC.
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re | Case No. 98-34055-DM-11
|
INTERACTIVE NETWORK, INC., a | Chapter 11
California corporation, |
| FIRST AMENDMENT TO CHAPTER 11
| PLAN OF DEBTOR AND DEBTOR IN
Debtor. | POSSESSION INTERACTIVE
Tax ID. No. 94-3025019 | NETWORK, INC
|
| Date: [NA]
| Time:
| Place:
_____________________________________|
<PAGE>
Debtor and debtor in possession Interactive Network, Inc., a California
corporation, hereby amends its Chapter 11 Plan of Debtor and Debtor in
Possession Interactive Network, Inc. (filed December 22, 1998) (the "Plan") as
follows:
Article III.C.3 is amended and restated to provide, in full that:
General Unsecured Claims are Unsecured Claims not entitled to priority
under Bankruptcy Code section 507(a). On the Effective Date of the Plan or as
soon thereafter as such Claims are Allowed, general Unsecured Claims will paid
in full with post-petition interest to the extent that the Claims are Allowed
Claims.
Article V.A.1 of the Plan is amended and restated to provide, in full,
that:
As of the Effective Date, the Debtor will assume the Settlement Agreement,
its employment and compensation agreements with its current officers and
employees, its sublease of its office space at 1161 Old County Road, Belmont,
California 94002 and the following agreements:
1. AGREEMENTS WITH GANNETT CO., INC.
---------------------------------
A. SECTION 7.5 OF THE STOCK PURCHASE AGREEMENT DATED AS OF DECEMBER 2,
1992, AS AMENDED BY A WAIVER AND AMENDMENT AGREEMENT EXECUTED IN
SEPTEMBER 1994 IN CONNECTION WITH CLOSING OF THE 1994 NOTE PURCHASE
AGREEMENT WHICH ENTITLES GANNETT TO DESIGNATE ONE PERSON TO BE
ELECTED TO THE BOARD OF DIRECTORS OF THE DEBTOR.
B. SECTION 8 OF THE 1992 STOCK PURCHASE AGREEMENT WHICH GIVES CERTAIN
REGISTRATION RIGHTS TO GANNETT IN CONNECTION WITH SALE OF THE
DEBTOR'S SECURITIES.
C. SECTION 7.6 OF THE 1992 STOCK PURCHASE AGREEMENT UNDER WHICH THE
DEBTOR AGREES TO COORDINATE WITH GANNETT IN THE DEVELOPMENT OF
OPPORTUNITIES FOR REAL TIME ELECTRONIC NEWS SERVICES ON A NATIONAL
BASIS AND TO PROVIDE GANNETT WITH THE RIGHT OF FIRST REFUSAL TO
PARTICIPATE EXCLUSIVELY IN A PARTNERSHIP OR JOINT VENTURE WITH THE
DEBTOR IN EXPLOITATION OF THESE OPPORTUNITIES; ALSO, THE INTENTION OF
THE DEBTOR TO ENTER INTO A JOINT VENTURE ARRANGEMENT WITH GANNETT
WHICH WILL UTILIZE THE DEBTOR'S TECHNOLOGY FOR PURPOSE OF OFFERING
REAL TIME SERVICES TO SUBSCRIBERS, SUCH AS RESULTS OF SPORTING
EVENTS, LEAGUE TOURNAMENTS AND STANDINGS; ALSO, UNDERTAKING OF THE
DEBTOR TO USE ITS BEST EFFORTS TO ASSIST OF GANNETT'S 81 DAILY
NEWSPAPER ENTITIES IN EACH OF THEIR RESPECTIVE METROPOLITAN OR RURAL
SERVICE AREAS AS THE IVDs LICENSES ARE AWARDED THROUGH LOTTERIES
THROUGHOUT THE NATION.
2. AGREEMENT WITH TWO-WAY TV (FORMERLY KNOWN AS INTERACTIVE NETWORK, LTD.)
-----------------------------------------------------------------------
A. KNOW-HOW LICENSE AGREEMENT DATED SEPTEMBER 29, 1992 BETWEEN THE
DEBTOR AND INTERACTIVE NETWORK, LTD. ("INL"), PURSUANT TO WHICH IN
HAS GRANTED INL CERTAIN
2
<PAGE>
RIGHTS TO USE KNOW-HOW AND PATENTS OF THE DEBTOR IN DESIGNATED
COUNTRIES IN EUROPE.
3. DIRECTOR STOCK OPTIONS IN ADDITION TO MR. BAUER'S 900,000 SHARE OPTION
----------------------------------------------------------------------
IN HIS EMPLOYMENT AGREEMENT
- ---------------------------
A. A 150,000 SHARE STOCK OPTION ISSUED TO BRUCE BAUER IN 1995 AT
$.09/SHARE (WHICH THEN WAS AT LEAST THE FAIR MARKET VALUE PER SHARE).
B. A 150,000 SHARE STOCK OPTION ISSUED TO DONALD GRAHAM IN 1995 AT
$.09/SHARE (WHICH THEN WAS AT LEAST THE FAIR MARKET VALUE PER SHARE).
C. A 150,000 SHARE STOCK OPTION ISSUED TO JOHN BOHRER IN 1995 AT
$.09/SHARE (WHICH THEN WAS AT LEAST THE FAIR MARKET VALUE PER SHARE).
4. OTHER OUTSTANDING WARRANT AGREEMENTS
------------------------------------
A. WARRANT ISSUED TO SOCIETE FINANCIERE DU SEUJET FOR 84,233 SHARES,
EXPIRING 3/30/2000, AT EXERCISE PRICE OF $2.858
B. WARRANT ISSUED (OR TRANSFERRED) TO GEORGE RAINES FOR 15,000 SHARES,
EXPIRING 3/30/2000, AT EXERCISE PRICE OF $2.858
C. WARRANTS ISSUED (OR TRANSFERRED) TO GRIFFIN PARTNERS, INC. FOR (I)
10,000 SHARES, EXPIRING 3/30/2000, AT EXERCISE PRICE OF $4.80, AND
(II) 125,520 SHARES, EXPIRING 3/30/2000, AT EXERCISE PRICE OF $4.589
The first of these amendments is not a change in the Plan, but -- as
indicated at the hearing on February 11, 1999 -- clarificatory of its intent in
the Plan as originally written. The Debtor believes that the amendment to
Article V.A.1 of the Plan is not material. There are no defaults of which the
Debtor is aware in any of the agreements listed; hence, there will be no cure
costs. By contrast,
3
<PAGE>
rejection of the agreements might create damage claims. The Debtor also will be
amending its schedules to reflect these agreements, which have been overlooked.
Dated: February 18, 1999
INTERACTIVE NETWORK, INC., DEBTOR AND DEBTOR IN
POSSESSION
By: /s/ Bruce W. Bauer
-------------------------
Bruce W. Bauer
Its: Chairman, President and Chief Executive
Officer
Dated: February 18, 1999
ADAM A. LEWIS
J. ROBERT NELSON
MORRISON & FOERSTER LLP
By: /s/ Adam A. Lewis
-------------------------
Adam A. Lewis
Attorneys for Debtor and Debtor in
Possession
INTERACTIVE NETWORK, INC.
4
<PAGE>
PROOF OF SERVICE BY MAIL
FRCivP 5(b)
I am employed with the law firm of Morrison & Foerster LLP, whose
address is 425 Market Street, San Francisco, California, 94105; I am not a
party to the within cause; I am over the age of eighteen years and I am
readily familiar with Morrison & Foerster's practice for collection and
processing of correspondence for mailing with the United States Postal Service
and know that in the ordinary course of Morrison & Foerster's business
practice the document described below will be deposited with the United States
Postal Service on the same date that it is placed at Morrison & Foerster with
postage thereon fully prepaid for collection and mailing.
I further declare that on the date hereof I served a copy of:
First Amendment to Chapter 11 Plan of Debtor and Debtor in Possession
Interactive Network, Inc.
on the following by placing a true copy thereof enclosed in a sealed envelope
addressed as follows for collection and mailing at Morrison & Foerster LLP,
425 Market Street, San Francisco, California, 94105, in accordance with
Morrison & Foerster's ordinary business practices:
See attached Service List
I declare under penalty of perjury under the laws of the State of California
that the above is true and correct.
Executed at San Francisco, California, this 18th day of February, 1999.
Jeannie Baker-Sanders /s/ Jeannie Baker-Sanders
- ----------------------------------- -----------------------------------
(typed) (signature)
<PAGE>
SERVICE LIST
- -------------------------------------------------------------------------------
John Walshe Murray, Esq. Bruce D. M. Prescott, Esq.
Murray & Murray Trump Alioto Trump & Prescott
3030 Hansen Way, Suite 200 2201 Walnut Avenue, Suite 200
Palo Alto, California 94304-1009 Fremont, California 94538
- -------------------------------------------------------------------------------
James L. Lopes, Esq. Anne L. Keck, Esq.
Howard, Rice, Nemerovski Ahern & Keck
3 Embarcadero Center, 7th Floor 438 First Street, Suite 290
San Francisco, California 94111 Santa Rosa, California 94105
- -------------------------------------------------------------------------------
Joshua R. Floum, Esq. Stephen L. Johnson, Esq.
Legal Strategies Group Attorney-Advisor
5905 Christie Avenue Office of the United States Trustee
Emeryville, California 94608-1925 250 Montgomery Street, Suite 1000
San Francisco, California 94104
- -------------------------------------------------------------------------------
William S. Thomas, Jr.
Nixon, Hargrave, Devans & Doyle
Clinton Square
Post Office Box 1051
Rochester, New York 14603-1051
- -------------------------------------------------------------------------------
<PAGE>
EXHIBIT 3.3
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
INTERACTIVE NETWORK, INC.
The undersigned, David B. Lockton and Thomas T.M. Donaher, hereby
certify that:
A. They are the duly elected and acting President and Secretary,
respectively, of Interactive Network, Inc., a California corporation (the
"Corporation").
B. Article THREE of the Amended and Restated Articles of Incorporation
of the Corporation is amended to read in its entirety as follows:
"THREE: This corporation is authorized to issue two classes of shares
to be designated, respectively, Preferred Stock ("Preferred") and
Common Stock ("Common"). The total number of shares of Preferred this
corporation shall have authority to issue is 10,000,000, without par
value, and the total number of shares of Common this corporation shall
have authority to issue is 150,000,000, without par value. The
Preferred may be divided into such number of series as the board of
directors may determine. The board of directors is authorized to
determine and alter the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued series,
and to fix the number of shares of any series of Preferred and the
designation of any such series of Preferred. The board of directors
may also, within the limits and restrictions stated herein or in any
resolution or resolutions originally fixing the number of shares
constituting any such series, increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares
of any such series subsequent to the issue of shares of that series.
One million (1,000,000) shares of the authorized shares of Preferred
are designated and known as Series F Preferred Convertible Stock
("Series F Preferred") and one million shares of the authorized shares
of Preferred are designated and known as Series G Convertible
Redeemable Stock ("Series G Preferred"). The rights, preferences,
<PAGE>
privileges and restrictions of the Series F Preferred and Series G
Preferred are set forth in the Certificate of Determination of the
Rights, Preferences, Privileges and Restrictions of Series F
Convertible Preferred Stock and Series G Convertible Redeemable
Preferred Stock of Interactive Network, Inc. filed with the California
Secretary of State on September 20, 1994."
C. The foregoing amendment of the Amended and Restated Articles of
Incorporation has been duly approved by the Board of Directors of the
Corporation.
D. The foregoing amendment of the Amended and Restated Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Section 902 of the Corporations code. The total number of
outstanding shares of the Corporation is 27,348,377 shares of Common Stock. The
number of shares voting in favor of the amendment equaled or exceeded the vote
required. The percentage vote required was more than fifty percent (50%) of the
outstanding shares of Common Stock. There are no shares of Series F Preferred
Stock or Series G Preferred Stock outstanding.
We further declare under penalty of perjury under the laws of the
State of California that we have read the foregoing certificate and know the
contents thereof and that the same is true and correct of our own knowledge.
DATED: May 22, 1995
/s/ David B. Lockton
------------------------------------
David B. Lockton, President
/s/ Thomas T.M. Donaher
------------------------------------
Thomas T.M. Donaher, Secretary
2.
<PAGE>
EXHIBIT 3.4(b)
--------------
AMENDMENT TO BY-LAWS
OF INTERACTIVE NETWORK, INC.,
A CALIFORNIA CORPORATION
Subject to approval by the shareholders of the Corporation at the Special
Meeting of Shareholders to be held on March 31, 1999, Section 3.2 of the By-Laws
of this Corporation is amended to read as follows:
3.2 NUMBER OF DIRECTORS.
-------------------
The number of directors of this corporation shall be not less than
five (5) nor more than nine (9). The exact number of directors shall be
five (5) until changed, within the limits specified above, by a By-Law
amending this Section 3.2, duly adopted by the Board of Directors or by the
shareholders. The indefinite number of directors may be changed, or a
definite number fixed without provision for an indefinite number, by a duly
adopted amendment to the Articles of Incorporation or by an amendment to
this By-Law adopted by the vote or written consent of holders of a majority
of the outstanding shares entitled to vote; provided, however, that an
amendment reducing the number of directors to a number less than five (5)
cannot be adopted if the votes cast against its adoption at a meeting, or
the shares not consenting in the case of action by written consent, are
equal to more than sixteen and two-thirds percent (16-2/3%) of the
outstanding shares entitled to vote thereon.
<PAGE>
EXHIBIT 10.9
INTERACTIVE NETWORK, INC. 1999 STOCK OPTION PLAN
NOTICE OF STOCK OPTION AWARD
----------------------------
Grantee's Name and Address: _________________________________
_________________________________
_________________________________
You have been granted an option to purchase shares of Common Stock of the
Company, subject to the terms and conditions of this Notice of Stock Option
Award (the "Notice"), the Plan and the Stock Option Award Agreement (the "Option
Agreement") attached hereto, as follows:
Award Number _________________________________
Date of Award _________________________________
Vesting Commencement Date _________________________________
Exercise Price per Share $ _________________________________
Total Number of Shares
subject to the Option _________________________________
Total Exercise Price $ _________________________________
Type of Option: _____ Incentive Stock Option
_____ Non-Qualified Stock Option
Expiration Date: _________________________________
Post-Termination Exercise
Period: Three (3) Months
Vesting Schedule:
- ----------------
Subject to Grantee's Continuous Service and other limitations set forth in
this Notice, the Plan and the Option Agreement, the Option may be exercised, in
whole or in part, in accordance with the following schedule:
[___%] of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and an additional [___%] of the Shares subject to
the Option shall vest on each yearly anniversary of the Vesting Commencement
Date thereafter.
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall cease after the leave of absence exceeds a
period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity. In the event of the Grantee's change in status
from Employee to Consultant, vesting of the Option shall continue only to the
extent determined by the Administrator as of such change in status.
1
<PAGE>
IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.
Interactive Network, Inc.,
a Delaware corporation
By:
----------------------------------
Title:
-------------------------------
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE COMPANY'S 1999 STOCK OPTION PLAN SHALL
CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF GRANTEE'S
CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT
OR THE COMPANY'S RIGHT TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR
WITHOUT CAUSE.
The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under this Notice, the Plan or the Option Agreement. The Grantee further agrees
to notify the Company upon any change in the residence address indicated in this
Notice.
Dated: Signed:
---------------------- -------------------------
Grantee
2
<PAGE>
Award Number: ___________
INTERACTIVE NETWORK, INC. 1999 STOCK OPTION PLAN
STOCK OPTION AWARD AGREEMENT
----------------------------
1. Grant of Option. Interactive Network, Inc., a Delaware corporation (the
---------------
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 1999
Stock Option Plan (the "Plan") adopted by the Company, which are incorporated
herein by reference. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Option Agreement.
If designated in the Notice as an Incentive Stock Option, the Option is
intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Code. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of Shares subject to Options designated as Incentive
Stock Options which become exercisable for the first time by the Grantee during
any calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options, to the extent of the Shares covered
thereby in excess of the foregoing limitation, shall be treated as Non-Qualified
Stock Options. For this purpose, Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the date the Option with respect to such
Shares is awarded.
2. Exercise of Option.
------------------
(a) Right to Exercise. The Option shall be exercisable during its term
-----------------
in accordance with the Vesting Schedule set out in the Notice and with the
applicable provisions of the Plan and this Option Agreement. The Option shall be
subject to the provisions of Section 11 of the Plan relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction or Related Entity Disposition. No partial exercise of the Option may
be for less than the lesser of five percent (5%) of the total number of Shares
subject to the Option or the remaining number of Shares subject to the Option.
In no event shall the Company issue fractional Shares.
(b) Method of Exercise. The Option shall be exercisable only by
------------------
delivery of an Exercise Notice (attached as Exhibit A) which shall state the
election to exercise the Option, the whole number of Shares in respect of which
the Option is being exercised, such other representations and agreements as to
the holder's investment intent with respect to such Shares and such other
provisions as may be required by the Administrator. The Exercise Notice shall be
signed by the Grantee and shall be delivered in person or by certified mail to
the Secretary of the Company accompanied by payment of the Exercise Price. The
Option shall be deemed to be
1
<PAGE>
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price, which, to the extent selected, shall be deemed to be satisfied
by use of the broker-dealer sale and remittance procedure to pay the Exercise
Price provided in Section 4(d), below.
No Shares will be issued pursuant to the exercise of the Option unless
such issuance and such exercise shall comply with all Applicable Laws. Assuming
such compliance, for income tax purposes, the Shares shall be considered
transferred to the Grantee on the date on which the Option is exercised with
respect to such Shares.
(c) Taxes. No Shares will be delivered to the Grantee or other person
-----
pursuant to the exercise of the Option until the Grantee or other person has
made arrangements acceptable to the Administrator for the satisfaction of
foreign, federal, state and local income and employment tax withholding
obligations.
3. Method of Payment. Payment of the Exercise Price shall be by any of the
-----------------
following, or a combination thereof, at the election of the Grantee; provided,
however, that such exercise method does not then violate any Applicable Law and,
provided further, that the portion of the Exercise Price equal to the par value
of the Shares must be paid in cash or other legal consideration permitted by the
Delaware General Corporation Law:
(a) cash;
(b) check;
(c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require (including
withholding of Shares otherwise deliverable upon exercise of the Option) which
have a Fair Market Value on the date of surrender or attestation equal to the
aggregate Exercise Price of the Shares as to which the Option is being exercised
(but only to the extent that such exercise of the Option would not result in an
accounting compensation charge with respect to the Shares used to pay the
exercise price); or
(d) through a broker-dealer sale and remittance procedure pursuant to
which the Grantee (A) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate exercise price payable
for the purchased Shares and (B) shall provide written directives to the Company
to deliver the certificates for the purchased Shares directly to such brokerage
firm in order to complete the sale transaction.
4. Restrictions on Exercise. The Option may not be exercised if the
------------------------
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws. In addition, the Option, if an Incentive
Stock Option, may not be exercised until such time as the Plan has been approved
by the stockholders of the Company.
5. Termination or Change of Continuous Service. In the event the Grantee's
-------------------------------------------
Continuous Service terminates, the Grantee may, to the extent otherwise so
entitled at the date of
2
<PAGE>
such termination (the "Termination Date"), exercise the Option during the Post-
Termination Exercise Period. In no event shall the Option be exercised later
than the Expiration Date set forth in the Notice. In the event of the Grantee's
change in status from Employee, Director or Consultant to any other status of
Employee, Director or Consultant, the Option shall remain in effect and, except
to the extent otherwise determined by the Administrator, continue to vest;
provided, however, with respect to any Incentive Stock Option that shall remain
in effect after a change in status from Employee to Director or Consultant, such
Incentive Stock Option shall cease to be treated as an Incentive Stock Option
and shall be treated as a Non-Qualified Stock Option on the day three (3) months
and one (1) day following such change in status. Except as provided in Sections
6 and 7 below, to the extent that the Grantee is not entitled to exercise the
Option on the Termination Date, or if the Grantee does not exercise the Option
within the Post-Termination Exercise Period, the Option shall terminate.
6. Disability of Grantee. In the event the Grantee's Continuous Service
---------------------
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the Option to the extent he or she was otherwise
entitled to exercise it on the Termination Date; provided, however, that if such
Disability is not a "disability" as such term is defined in Section 22(e)(3) of
the Code and the Option is an Incentive Stock Option, such Incentive Stock
Option shall cease to be treated as an Incentive Stock Option and shall be
treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Grantee is not
entitled to exercise the Option on the Termination Date, or if the Grantee does
not exercise the Option to the extent so entitled within the time specified
herein, the Option shall terminate.
7. Death of Grantee. In the event of the termination of the Grantee's
----------------
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's Termination of Continuous Service as a
result of his or her Disability, the Grantee's estate, or a person who acquired
the right to exercise the Option by bequest or inheritance, may exercise the
Option, but only to the extent the Grantee could exercise the Option at the date
of termination, within twelve (12) months from the date of death (but in no
event later than the Expiration Date). To the extent that the Grantee is not
entitled to exercise the Option on the date of death, or if the Option is not
exercised to the extent so entitled within the time specified herein, the Option
shall terminate.
8. Transferability of Option. The Option, if an Incentive Stock Option,
-------------------------
may not be transferred in any manner other than by will or by the laws of
descent or distribution and may be exercised during the lifetime of the Grantee
only by the Grantee. The Option, if a Non-Qualified Stock Option, may be
transferred by the Grantee in a manner and to the extent acceptable to the
Administrator as evidenced by a writing signed by the Company and the Grantee.
The terms of the Option shall be binding upon the executors, administrators,
heirs and successors of the Grantee.
9. Term of Option. The Option may be exercised no later than the
--------------
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein.
3
<PAGE>
10. Tax Consequences. Set forth below is a brief summary as of the date of
----------------
this Option Agreement of some of the federal 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. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Incentive Stock Option. If the Option qualifies as an
----------------------------------
Incentive Stock Option, there will be no regular federal income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as income for purposes of the alternative minimum tax for federal tax
purposes and may subject the Grantee to the alternative minimum tax in the year
of exercise.
(b) Exercise of Incentive Stock Option Following Disability. If the
-------------------------------------------------------
Grantee's Continuous Service terminates as a result of Disability that is not
total and permanent disability as defined in Section 22(e)(3) of the Code, to
the extent permitted on the date of termination, the Grantee must exercise an
Incentive Stock Option within three (3) months of such termination for the
Incentive Stock Option to be qualified as an Incentive Stock Option.
(c) Exercise of Non-Qualified Stock Option. On exercise of a Non-
--------------------------------------
Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If the Grantee is an Employee or a former Employee, the Company
will be required to withhold from the Grantee's compensation or collect from the
Grantee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.
(d) Disposition of Shares. In the case of a Non-Qualified Stock
---------------------
Option, if Shares are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes and subject to tax at a maximum rate of 20%. In the case of
an Incentive Stock Option, if Shares transferred pursuant to the Option are held
for more than one year after receipt of the Shares and are disposed more than
two years after the Date of Award, any gain realized on disposition of the
Shares also will be treated as capital gain for federal income tax purposes and
subject to the same tax rates and holding periods that apply to Shares acquired
upon exercise of a Non-Qualified Stock Option. If Shares purchased under an
Incentive Stock Option are disposed of prior to the expiration of such one-year
or two-year periods, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market
Value of the Shares on the date of exercise, or (ii) the sale price of the
Shares.
11. Entire Agreement: Governing Law. The Notice, the Plan and this Option
-------------------------------
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof
4
<PAGE>
and supersede in their entirety all prior undertakings and agreements of the
Company and the Grantee with respect to the subject matter hereof, and may not
be modified adversely to the Grantee's interest except by means of a writing
signed by the Company and the Grantee. These agreements are to be construed in
accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of the
Notice or this Option Agreement be determined by a court of law to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.
12. Headings. The captions used in the Notice and this Option Agreement
--------
are inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.
13. Interpretation. Any dispute regarding the interpretation of the Notice,
--------------
the Plan, and this Option Agreement shall be submitted by the Grantee or by the
Company forthwith to the Administrator, which shall review such dispute at its
next regular meeting. The resolution of such dispute by the Administrator shall
be final and binding on all persons.
5
<PAGE>
EXHIBIT A
---------
INTERACTIVE NETWORK, INC. 1999 STOCK OPTION PLAN
EXERCISE NOTICE
---------------
Interactive Network, Inc.
1161 Old Country Road
Belmont, California 94002
Attention: Secretary
1. Exercise of Option. Effective as of today, ______________, ___ the
------------------
undersigned (the "Grantee") hereby elects to exercise the Grantee's option to
purchase ___________ shares of the Common Stock (the "Shares") of Interactive
Network, Inc. (the "Company") under and pursuant to the Company's 1999 Stock
Option Plan (the "Plan") and the [ ] Incentive [ ] Non-Qualified Stock Option
Award Agreement (the "Option Agreement") and Notice of Stock Option Award (the
"Notice") dated ______________, ________.
2. Representations of the Grantee. The Grantee acknowledges that the
------------------------------
Grantee has received, read and understood the Notice, the Plan, and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.
3. Rights as Stockholder. Until the stock certificate evidencing such
---------------------
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 10 of the Plan.
4. Delivery of Payment. The Grantee herewith delivers to the Company the
-------------------
full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 4(d) of the Option Agreement.
5. Tax Consultation. The Grantee understands that the Grantee may suffer
----------------
adverse tax consequences as a result of the Grantee's purchase or disposition of
the Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for
any tax advice.
6. Taxes. The Grantee agrees to satisfy all applicable federal, state and
-----
local income and employment tax withholding obligations and herewith delivers to
the Company the full amount of such obligations or has made arrangements
acceptable to the Company to satisfy such
1
<PAGE>
obligations. In the case of an Incentive Stock Option, the Grantee also agrees,
as partial consideration for the designation of the Option as an Incentive Stock
Option, to notify the Company in writing within thirty (30) days of any
disposition of any shares acquired by exercise of the Option if such disposition
occurs within two (2) years from the Award Date or within one (1) year from the
date the Shares were transferred to the Grantee. If the Company is required to
satisfy any federal, state or local income or employment tax withholding
obligations as a result of such an early disposition, the Grantee agrees to
satisfy the amount of such withholding in a manner that the Administrator
prescribes.
7. Successors and Assigns. The Company may assign any of its rights under
----------------------
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.
8. Headings. The captions used in this Exercise Notice are inserted for
--------
convenience and shall not be deemed a part of this agreement for construction or
interpretation.
9. Interpretation. Any dispute regarding the interpretation of this
--------------
Exercise Notice shall be submitted by the Grantee or by the Company forthwith to
the Administrator, which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and binding
on all persons.
10. Governing Law; Severability. This Exercise Notice is to be construed in
---------------------------
accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
the other provisions shall nevertheless remain effective and shall remain
enforceable.
11. Notices. Any notice required or permitted hereunder shall be given in
-------
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
12. 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.
2
<PAGE>
13. Entire Agreement. The Notice, the Plan, and the Option Agreement are
----------------
incorporated herein by reference, and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee.
Submitted by: Accepted by:
GRANTEE: INTERACTIVE NETWORK, INC.
By:
----------------------------
Title:
----------------------------
- --------------------------------
(Signature)
Address: Address:
- ------- -------
- -------------------------------- 1161 Old Country Road
Belmont, California 94002
- --------------------------------
3
<PAGE>
EXHIBIT 10.12B
INTERACTIVE NETWORK, INC.
-------------------------
WAIVER AND AMENDMENT OF STOCK PURCHASE AGREEMENT
------------------------------------------------
WITH GANNETT CO., INC.
----------------------
WHEREAS, the undersigned entered into a Stock Purchase Agreement dated
December 2, 1992 (the "Agreement") with Interactive Network, Inc. (the
"Company") and David B. Lockton, under which the undersigned was granted a right
of first refusal to purchase certain securities proposed to be issued by the
Company.
WHEREAS, the Company proposes to raise $50,000,000 through the sale
and issuance of convertible secured promissory notes (the "Notes") and other
securities of the Company, on the terms and subject to the conditions set forth
in a Summary of Terms attached hereto as Appendix I. The Notes are convertible
into shares of Common Stock of the Company (the "Conversion Shares"). The Notes,
Conversion Shares and other securities of the Company issued or to be issued
pursuant to the Summary of Terms are referred to collectively herein as the
"Securities".
WHEREAS, the Company desires to grant registration rights to the
holders of the Notes with respect to the Conversion Shares and other shares of
Common Stock of the Company that may be issued upon conversion or exercise of
other Securities contemplated by the Summary of Terms or pursuant to anti-
dilution rights referred to in the Summary of Terms (collectively, the
"Shares").
IN CONSIDERATION OF, and as an inducement to, the consummation of the
transactions contemplated by the Summary of Terms, the undersigned agrees as
follows:
1. Waiver and Termination of Right of First Refusal. The undersigned
-------------------------------------------------
hereby waives the provisions of Section 9.1 of the Agreement with respect to the
sale and issuance of the Securities in the transactions contemplated by the
Summary of Terms. The undersigned further agrees that the provisions of Section
9.1 of the Agreement are hereby terminated and shall be of no further force and
effect after the date hereof.
2. Board of Directors. The provisions of Section 7.5 of the
--------------------
Agreement are hereby amended to read in their entirety as follows:
"7.5 Board of Directors.
-------------------
(a) The Company shall include in the slate of nominees recommended by
the Company's Board of Directors or management to shareholders for
election as directors at
<PAGE>
each annual meeting of shareholders of the Company one (1) person
designated by the Purchaser. The nominee may be employed by Purchaser.
The Company shall use its best efforts to cause all Common Stock for
which the Company's management or directors hold proxies or are
otherwise entitled to vote to be voted in favor of the election of
such designee and Lockton agrees to vote or cause all shares of Common
Stock of the Company owned of record or beneficially by him to be
voted in favor of such designee. In the event that such designee shall
cease to serve as a director for any reason (including removal for
cause), the Company shall use its best efforts to fill such vacancy
with another like designee.
(b) The designee of Purchaser shall be entitled to excuse himself from
all deliberations of the Board of Directors of the Company, or
discussions of such Board concerning business relationships between
the Company and Purchaser."
3. Registration Rights. The undersigned hereby consents pursuant to
--------------------
Section 8.12 of the Agreement to the grant of registration rights to Tele-
Communications, Inc., National Broadcasting Company, Inc., Motorola, and Sprint
Corporation or their respective wholly-owned subsidiaries, with respect to the
Shares. The undersigned further agrees that the provisions of Section 8 of the
Agreement are hereby amended as follows:
(A) Section 8.1 is hereby amended to add the following subsection (e):
"(e) "Strategic Lender Registrable Stock" means (i) all shares of
Common Stock of the Company issued to Tele-Communications, Inc.
("TCI"), National Broadcasting Company, Inc. ("NBC"), and Motorola and
Sprint Corporation ("Sprint") (collectively, the "Strategic
Partners"), or their respective wholly owned subsidiaries
(collectively, the "Strategic Lenders"), or any of them, upon
conversion of promissory notes, or securities into which said
promissory notes are convertible, issued to the Strategic Lenders by
the Company in connection with a loan (the "Loan") to the Company
pursuant to a definitive Note Purchase Agreement (the "Note
Agreement") having substantially the terms set forth in a Term Sheet
dated August 31, 1994, as amended, among the Company and the Strategic
Partners (the "Term Sheet"), (ii) all shares of Common
2
<PAGE>
Stock of the Company issued to the Strategic Lenders, or any of them,
or issued upon conversion of promissory notes, or securities into which
said promissory notes are convertible, in connection with financings
provided to the Company by the Strategic Lenders from June 1, 1994 to
the date hereof, (iii) all shares of Common Stock of the Company issued
pursuant to the anti-dilution provisions of the Note Agreement, (iv)
all shares of Common Stock of the Company issued to NBC pursuant to the
anti-dilution provisions of the Stock Purchase Agreement dated December
2, 1992 by and among the Company, NBC, Rainbow Programming Holdings,
Inc. and David B. Lockton, (v) all shares of Common Stock of the
Company issued to TCI Development Corporation ("TDC"), a wholly owned
subsidiary of TCI pursuant to the anti-dilution provisions of the
Amended and Restated Stock Purchase Agreement dated June 4, 1993 by and
among the Company, TDC and David B. Lockton, (vi) all shares of Common
Stock of the Company issued to the Strategic Lenders upon exercise of
warrants issued to the Strategic Lenders in connection with the
Commitment Fee as described in the Term Sheet, (vii) all shares of
Common Stock of the Company issued to the Strategic Lenders upon
exercise of warrants issued to the Strategic Lenders in connection with
the Funding Fee, as described in the Term Sheet, and (viii) all shares
of Common Stock of the Company issued as (or issuable upon conversion
of any securities issued by the Company pursuant to the Loan Agreement,
or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of any of the
foregoing; excluding in all cases, however, any Strategic Lender
Registrable Stock sold by a person in a transaction in which its
registration rights with respect to such stock are not assigned."
(B) Section 8.6 is hereby amended to add the following introductory clause:
"Except as otherwise provided in Section 8.14,"
(C) A new Section 8.14 shall be added to read in its entirety as follows:
"8.14 Limitation on Registration Rights. Notwithstanding any other
-----------------------------------
provision set forth in this Section 8:
(a) If the underwriter in any registration for an
underwritten offering of Common Stock of the Company determines that
(i) marketing factors require a limitation of the number of shares to
be underwritten,
3
<PAGE>
(ii) the offering price per share would be reduced by the inclusion of
any shares other than the Strategic Lender Registrable Stock, or (iii)
some other limitation is advisable, then the number of shares of
Common Stock of the Company to be included in the registration and
underwriting shall first be allocated among all Strategic Lenders who
indicated to the Company their decision to distribute any of their
Strategic Lender Registrable Stock through such underwriting, and then
pursuant to the terms of this Section 8.
(b) Holders are not permitted to include any Registrable
Stock, or any other securities of the Company, in any registration
initiated by the Strategic Lenders in which any Strategic Lender
Registrable Stock is included in such registration."
4. Remainder of Agreement. Except as specifically provided herein,
-----------------------
the Agreement shall remain in full force and effect.
Dated: September ___, 1994 GANNETT CO., INC.
By:
---------------------------------
Title:
------------------------------
AGREED AND ACKNOWLEDGED
INTERACTIVE NETWORK, INC.
By:
-------------------------------
Title:
----------------------------
4
<PAGE>
EXHIBIT 10.20
INTERACTIVE NETWORK, INC.
COMMON STOCK PURCHASE WARRANT
To Purchase Fifteen Thousand (15,000) Shares
Warrant No. 1995-1
FOR CONSIDERATION, the sufficiency and receipt of which is hereby
acknowledged by INTERACTIVE NETWORK, INC., a California corporation (the
"Company"), GEORGE RANEY (the "Holder"), is hereby granted a warrant (the
"Warrant") to purchase, at any time from the date hereof until 5:00 p.m., San
Francisco time, on March 30, 2000 (the "Expiration Date"), the number of shares
of fully paid and non-assessable shares (the "Shares") of Common Stock of the
Company set forth above.
The Shares shall be available for purchase at a price per Share of
$2.858 (the "Purchase Price"), subject to adjustment as provided for herein. The
Purchase Price shall be payable in cash, by certified or official bank check or
postal or express money order, in U.S. Dollars. Upon surrender of this Warrant
with the Subscription Form attached to this Warrant duly executed, together with
payment of the Purchase Price times the number of Shares purchased, to the
Company at its address set forth below, the Holder shall be entitled to receive
certificates for the number of the Shares purchased.
The purchase rights represented by this Warrant are exercisable at the
option of the Holder, in whole at any time, or in part from time to time (but
not as to a fractional Share), from the date hereof but not later than 5:00
p.m., San Francisco time on the Expiration Date. This Warrant shall
automatically terminate, without any further action by the Company, after such
time on the Expiration Date. In the case of the purchase of less than all of the
Shares purchasable hereunder, upon surrender of this Warrant for cancellation,
together with the duly executed subscription form and funds sufficient to pay
any transfer tax, the Company shall cause to be delivered to the Holder without
charge a new Warrant of like tenor to this Warrant evidencing the right of the
Holder to purchase the number of Shares purchasable hereunder as to which this
Warrant has not been exercised. The issuance of certificates for the Shares upon
the exercise of this Warrant shall be made without charge to the Holder for such
certificates or for any tax in respect of the issuance of such certificates, and
such certificates shall (subject to the provisions of the following paragraph of
this Warrant) be issued in the name of, or in such names as may be directed by,
the Holder; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance of
any such certificate in a name other than that of the registered Holder, and the
Company shall not be required to issue or deliver such certificates unless or
until
<PAGE>
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
The Holder, by acceptance hereof, represents, warrants, covenants and
agrees that: (i) the Holder has knowledge of the business and affairs of the
Company; (ii) the Holder has received information regarding the Company that he
or she considers necessary or appropriate for his or her investment decision;
and (iii) this Warrant and the Shares issuable upon the exercise of this Warrant
are being acquired pursuant to an exemption from registration provided by
Regulation S promulgated under the Securities Act of 1933. THIS WARRANT AND THE
SHARES RECEIVABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("ACT"), AND THIS WARRANT CANNOT BE EXERCISED
BY OR ON BEHALF OF ANY U.S. PERSON UNLESS THE SHARES HAVE BEEN REGISTERED UNDER
THE ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. ANY PERSON
EXERCISING THIS WARRANT IS REQUIRED TO GIVE A WRITTEN CERTIFICATION, AS SET
FORTH ON THE SUBSCRIPTION FORM, THAT HE OR SHE IS NOT A U.S. PERSON AND THAT THE
WARRANT IS NOT BEING EXERCISED ON BEHALF OF A U.S. PERSON. Subject to the terms
hereof, this Warrant and all rights hereunder are transferable, in whole or in
part, on the books of the Company maintained for such purpose at its principal
office referred to below by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant properly endorsed and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any partial transfer, the Company will issue and deliver to the Holder a
new warrant or warrants of like tenor with respect to the Shares not so
transferred. Each Holder, by taking or holding this Warrant, consents and agrees
that the Holder may be treated by the Company and all other persons dealing with
this Warrant, as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented hereby, or to the transfer hereof on
the books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the Holder as the owner for
all purposes.
In case the Company shall at any time subdivide or combine the
outstanding shares of Common Stock, the Purchase Price shall forthwith be
proportionately decreased in the case of subdivision or increased in the case of
combination. Upon each adjustment of the Purchase Price pursuant to the
provisions of this paragraph, the number of Shares issuable upon the exercise of
each Warrant shall be adjusted to the nearest full Share by multiplying the
Purchase Price in effect immediately prior to such adjustment by the number of
Shares issuable upon exercise of the Warrant immediately prior to such
adjustment and dividing the product so obtained by the adjusted Purchase Price.
In case of any reclassification of Common Stock (other than a change in par
2.
<PAGE>
value or as a result of a subdivision or combination), or in the case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
surviving corporation and which does not result in any reclassification or
change of the outstanding shares of Common Stock, except a change as a result of
a subdivision or combination or such shares or a change in par value, as
aforesaid), or in the case of a sale or conveyance to another corporation of the
property of the Company as an entirety, the Holder of this Warrant shall
thereafter have the right to purchase the kind and number of Shares and other
securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a Holder of the number of Shares
which the Holder of such Warrant would have had the right to purchase
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance, at a price equal to the product of
(Y) the number of Shares issuable upon exercise of this Warrant, and (Z) the
Purchase Price in effect immediately prior to the record date for such
reclassification, change, consolidation, merger, sale or conveyance. No
adjustment of the Purchase Price or number of Shares shall be made upon the
issuance or sale of shares of Common Stock, options, rights or warrants,
conversion or exchange of convertible or exchangeable securities or the
occurrence of any event other than as set forth in this paragraph.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and, in case of
such loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will make and deliver a new warrant of like tenor, in
lieu of this Warrant. The Company shall not be required to issue certificates
representing fractions of Shares, nor shall it be required to issue scrip or pay
cash in lieu of fractional interests, it being the intent of the parties that
all fractional interests shall be eliminated. The Company shall at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon the exercise of the Warrant, such number of shares of
Common Stock as shall be issuable upon the exercise hereof. The Company
covenants and agrees that, upon exercise of this Warrant and payment of the
Purchase Price therefor, all shares of Common Stock issuable upon such exercise
shall be duly and validly issued, fully paid and non-assessable.
Nothing contained in this Warrant shall be construed as conferring
upon the Holder the right to vote or consent to or receive notice as a
shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the
3.
<PAGE>
Company. If, however, at any time prior to the expiration of the Warrant or its
exercise, any of the following events shall occur: (a) the Company shall take a
record of the holders of its Common Stock for the purpose of entitling the
Holders to receive a dividend or distribution payable otherwise than in cash, or
a cash dividend or distribution payable otherwise than out of current or
retained earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or (b) the Company shall offer to all
the holders of its common stock any additional shares of stock of the Company or
securities convertible into or exchangeable for shares of common stock of the
Company, or any option, right or warrant to subscribe therefore; or (c) a
dissolution, liquidation or winding-up of the Company (other than in connection
with a consolidation or merger) or a sale of all or substantially all of its
property, assets and business as an entirety shall be proposed; then, in any one
or more of said events, the Company shall give written notice of such events at
least ten (10) days prior to the date fixed as a record date or the date of
closing the transfer books for the determination of the shareholders entitled to
such dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding-up or sale. Such notice shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration of payment of any such dividend, or the
issuance of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding-up or
sale.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or three (3) days after posting if mailed by registered or certified mail,
return receipt requested it to the registered Holder, to the address of such
Holder as shown on the books of the Company; or if to the Company, to 2840
Junction Avenue, San Jose, California 95134, or to such other address as may be
specified by the Holder or the Company in accordance with the foregoing
provisions. All the covenants, agreements, representations and warranties
contained in this Warrant shall bind the parties hereto and their respective
heirs, executors, administrators, distributees, successors and assigns. This
Warrant is delivered in the State of California and shall be construed and
enforced in accordance with, and governed by, the laws of the State of
California.
INTERACTIVE NETWORK, INC.
Dated: March 30, 1995 By:
-----------------------------------------
4.
<PAGE>
--------------------------
ASSIGNMENT FORM
--------------------------
FOR VALUE RECEIVED, , hereby
-------------------------------
sells, assigns, and transfers unto:
Name:
--------------------------------------
(Please type or print in block letters)
Address:
--------------------------------------
--------------------------------------
the right to purchase the Shares represented by this Warrant to the extent of
Shares as to which such right is exercisable and does hereby irrevocably
- -------
constitute and appoint
---------------------------------------------------------
attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.
Dated:
---------------- -----------------------------------
Signature
<PAGE>
----------------------------
SUBSCRIPTION FORM
----------------------------
(To be Executed by the Registered Holder
in order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the right to
purchase Shares covered by this Warrant No. according to the
--------- -------
conditions hereof and herewith makes payment of the Purchase Price of such
Shares in full. The undersigned represents that he is not a U.S. Person as
defined below and is not exercising this Warrant on behalf of any U.S. Person.
Date:
----------- ------------------------------------
Signature
------------------------------------
Name
Address:
------------------------------------
------------------------------------
A U.S. Person is any of the following:
(a) Any natural person resident in the United States;
(b) Any partnership or corporation organized or incorporated under the laws of
the United States;
(c) Any estate of which any executor or administrator is a U.S. person;
(d) Any trust of which any trustee is a U.S. person;
(e) Any agency or branch of a foreign entity located in the United States;
(f) Any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. person;
(g) Any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or (if
an individual) resident in the United States; and
<PAGE>
(h) Any partnership or corporation if (A) organized or incorporated under the
laws of any foreign jurisdiction; and (B) formed by a U.S. person
principally for the purpose of investing in securities not registered under
the Securities Act of 1933, unless it is organized or incorporated, and
owned, by accredited investors (as defined in Rule 501(a) of Regulation D)
who are not natural persons, estates or trusts.
Notwithstanding the above, the following are not "U.S. Persons":
---
(i) Any discretionary account or similar account (other than an estate or
trust) held for the benefit or account of a non-U.S. person by a dealer or
other professional fiduciary organized, incorporated, or (if an individual)
resident in the United States;
(j) Any estate of which any professional fiduciary acting as executor or
administrator is a U.S. person if an executor or administrator of the
estate who is not a U.S. person has sole or shared investment discretion
with respect to the assets of the estate, and the estate is governed by
foreign law;
(k) Any trust of which any professional fiduciary acting as trustee is a U.S.
person, if another of the trustees is a non-U.S, person with sole or shared
investment discretion with respect to the trust assets, and no beneficiary
of the trust (and no settlor if the trust is revocable) is a U.S. person;
(l) An employee benefit plan established and administered in accordance with
the law of a country other than the United States and customary practices
and documentation of such country;
(m) Any agency or branch of a U.S. person located outside the United States if
the agency or branch operates for valid business reasons; and the agency or
branch is engaged in the business of insurance or banking and is subject to
substantive insurance or banking regulation, respectively, in the
jurisdiction where located; and
(n) The International Monetary Fund, the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the Asian Development
Bank, the African Development Bank, the United Nations, and their agencies,
affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans.
"United States" means the United States of America, its territories and
possessions, any State of the United States, and the District of Columbia.
2.
<PAGE>
EXHIBIT 10.21
Board of Directors of Interactive Network, Inc.:
INTERACTIVE NETWORK, INC. ACTION OF THE BOARD OF DIRECTORS BY MAJORITY WRITTEN
CONSENT CONFIRM THE BOARD RESOLUTION EFFECTIVE JUNE 14, 1998.
- --------------------------------------------------------------------------------
Date: June 17, 1998
Re: Board Resolution of June 14, 1998 and Employment Agreement to Bruce W. Bauer
- --------------------------------------------------------------------------------
WHEREAS Interactive Network, Inc. (the Company) passed a board resolution by
majority vote on June 14, 1998 to hire Bruce W. Bauer to the position of Chief
Executive Officer and President of the Company for a one year employment
contract effective the 14th of June 1998 through the 13th of June 1999, the
Company shall provide under terms and conditions set forth as follows:
1. Amount of $125,000.00 (one hundred twenty five thousand dollars)
effective June 14, 1998.
2. The contract amount to be payable by the Company to Mr. Bauer in two
payments per month, or 24 equal payments per year ($125,000 / 24 = 5208.33).
3. If terminated, or if job is ended, the remaining balance of the yearly
contractual salary not yet paid is due payable immediately at job termination.
4. The Corporation hereby grants nonstatutory stock options to Mr. Bruce W.
Bauer to purchase in the amount of 900,000 (nine hundred thousand) shares of The
Corporation's Common Stock to Bruce W. Bauer; and further resolved that the
exercise price of each share shall be $0.2l (twenty one cents) per share at not
less than the fair market value as of this day hereof and that each such option
shall be immediately vested and exercisable immediately, and shall have a term
of five years, and that the proper officers of the Company are hereby authorized
and duly directed to execute such documents and to take whatever, action as
required to carry out the foregoing resolutions.
5. It is the instructions and authorization of the Company and its Board of
Directors that the issuance of the above compensation be provided as intended
and herewith ratifies and confirms the same by the majority of the Board of
Directors of Interactive Network, Inc.
This document may be executed in one or more counterparts, each of which is and
shall be deemed to be an original, and all of which when taken together shall
constitute one instrument.
Authorization and Acceptance by:
/s/ John Bohrer
- ------------------------------- ------------------------------
Don Graham, Director John Bohrer, Director
/s/ Bill Green
- ------------------------------- ------------------------------
Bill Green, Director David B Lockton, Director
/s/ Bruce W. Bauer
- -------------------------------
Bruce W. Bauer, Director
