UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

March 31, 2008

(Date of earliest event reported)

 

Access Integrated Technologies, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

000-51910

22-3720962

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

55 Madison Avenue, Suite 300, Morristown, New Jersey

07960

(Address of principal executive offices)

(Zip Code)

 

 

973-290-0080

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


TABLE OF CONTENTS

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

Item 9.01

Financial Statements and Exhibits

 

Signatures

 

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Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(e)        On March 31, 2008, Access Integrated Technologies, Inc. (the “Company”) entered into an amended and restated employment agreement with A. Dale Mayo, the Company’s Chief Executive Officer, President and Chairman of the Board of Directors (the “Employment Agreement”).

 

The Employment Agreement with Mr. Mayo, which supersedes the terms and conditions of his existing employment agreement, became effective on April 1, 2008 and extends the term of his employment to March 31, 2011. Upon such expiration, either the Board or Mr. Mayo may exercise the option to have Mr. Mayo serve only as Chairman and Chief Executive Officer of the Company for a term of three years, with both his time commitment and Base Salary (as defined therein) reduced by 50% from their levels immediately before such change in roles.

 

Under his previous employment agreement, Mr. Mayo received an annual base salary of $600,000 and a guaranteed bonus of $240,000 per year. Under the Employment Agreement, Mr. Mayo will receive a base salary of $600,000, subject to increase for subsequent years in the sole discretion of the Compensation Committee of the Board (the “Committee”), and an annual bonus based on the satisfaction of certain performance targets to be set annually by the Committee, which bonus shall not exceed 131.25% of Mr. Mayo’s then-Base Salary and is payable in cash, as to the portion of any bonus earned for an initial target, and then 50% in cash and 50% in restricted stock for any additional bonus amount earned for higher targets. Mr. Mayo will also be entitled to participate in all benefit plans provided to senior executives of the Company.

 

On March 31, 2008, pursuant to the Employment Agreement, Mr. Mayo received 750,000 non-qualified stock options under the Company’s Second Amended and Restated 2000 Equity Incentive Plan. The options have an exercise price of $3.25 and an expiration date of March 31, 2014, and will vest on the third anniversary of the date of grant or earlier upon the satisfaction of the following targets for the price of the Company’s Class A Common Stock:

 

Measurement and Vesting Date

Number of Options to Vest

Price Target

March 31, 2009

1/3

$7.00 for 10 consecutive trading days during April 1, 2008-March 31, 2009

March 31, 2009

2/3

$9.50 for 10 consecutive trading days during April 1, 2008-March 31, 2009

March 31, 2009

all

$12.00 for 10 consecutive trading days during April 1, 2008-March 31, 2009

March 31, 2010

1/3 of previously unvested options

$7.00 for 10 consecutive trading days during April 1, 2008-March 31, 2010

March 31, 2010

2/3 of previously unvested options

$9.50 for 10 consecutive trading days during April 1, 2008-March 31, 2010

March 31, 2010

all previously unvested options

$12.00 for 10 consecutive trading days during April 1, 2009-March 31, 2010

 

The grant is subject to approval of shareholders to the extent required by law.

 

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The descriptions of the amended and restated employment agreement and the non-qualified stock option agreement set forth above are qualified in their entirety by reference to the Employment Agreement, which is attached as Exhibit 10.1 and is incorporated herein by reference, and the form of non-qualified stock option agreement, which is attached as Exhibit 10.2 and is incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

 

(c)

Exhibits .

 

 

 

 

 

Exhibit Number

 

Description

 

10.1

Amended and Restated Employment, dated March 31, 2008, between Access Integrated Technologies, Inc. and A. Dale Mayo.

 

10.2

Form of Non-Qualified Stock Option Agreement.

 

 

 

 

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SIGNATURE

 

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

Dated as of April 2, 2008

 

 

 

 

 

By: 

/s/ Gary S. Loffredo

 

 

Name:

Gary S. Loffredo

 

 

Title:

Senior Vice President—Business Affairs, General Counsel and Secretary

 

 

 

 

 

 

 

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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of the 31st day of March, 2008, by and between Access Integrated Technologies, Inc., a Delaware Corporation (the "Company"), and A. Dale Mayo (the "Employee").

 

WITNESSETH:

 

WHEREAS , the Employee is employed as President, Chief Executive Officer and Chairman of the Board of Directors of the Company pursuant to an Employment Agreement effective in December, 2000, (the “Original Agreement”), which was amended and restated as of December 15 th , 2005 (the “Restated Agreement”); and

 

WHEREAS , the Company and the Employee wish to extend his employment by entering into a further Amended and Restated Employment Agreement (the “Agreement”), upon the terms and conditions set below;

 

NOW, THEREFORE , in consideration of the mutual covenants and agreements set forth herein, and intending to be legally bound hereby, the parties agree as follows:

 

1.          Employment . The Company agrees to continue to employ the Employee, and the Employee agrees to continue to be employed by the Company, for the period stated in Section 3 hereof and upon the other terms and conditions herein provided.

 

2.          Position and Responsibilities . The Employee shall serve as President, Chief Executive Officer and Chairman of the Board of Directors of the Company (the “Board”). The Employee shall be responsible for such duties as are commensurate with his office and as may from time to time be reasonably assigned to the Employee by the Board, as the case may be.

 

3.          Term . The term of this Agreement shall be from the April 1, 2008 (the “Effective Date”) through March 31, 2011. Upon the expiration of this Agreement on March 31, 2011, either the Employee or the Board may exercise the option to require that the Employee cease to serve as President, and instead assume the role of Chairman and Chief Executive Officer of the Company for a term of three years, with both his time commitment and Base Salary reduced by 50% from their levels immediately before such change in roles. In such event, the provisions of Section 4(b)(but ignoring the reference to $240,000), Section 4(c), Section 5 and Section 9 of this Agreement shall continue in full force and effect. Nothing in the previous two sentences shall preclude the parties from negotiating in good faith for the Employee to continue as full time President and Chief Executive Officer after the expiration of this Agreement.

 


 

4.

Compensation, Reimbursement of Expenses.

 

(a)         Salary . For all services rendered by the Employee in any capacity during his employment under this Agreement, including, without limitation, service as an executive, officer, director, or member of any committee of the Company or of any subsidiary, affiliate, or division thereof, the Company shall pay the Employee as compensation a salary (“Base Salary”) at the minimum rate of $600,000 per year commencing with the Effective Date, subject to increase for subsequent years in the sole discretion of the Compensation Committee of the Board.

 

(b)        Bonus . Employee shall be eligible for a bonus based on overall Company performance with goals to be established by the Committee for Threshold level, Target level and Maximum level payouts. Achievement of Target level will result in a bonus of 75% of Base Salary; achievement of Threshold level will result in a bonus of 50% of Target level payout or $240,000, whichever is greater; and achievement of Maximum level will result in a bonus of 175% of Target level payout. Intermediate results will pay a bonus based upon straight line interpolation. Any bonus over the Threshold level will be paid 50% in cash and 50% in restricted Company stock with a three-year prorated vesting period.

 

(c)         Reimbursement of Expenses . The Company shall pay, or reimburse the Employee for, all reasonable travel, entertainment and other expenses incurred by the Employee in the performance of his duties under this Agreement.

 

(d)        Stock Option Grant . Employee shall be granted 750,000 stock options under the Second Amended and Restated 2000 Stock Option Plan of Access Integrated Technologies, Inc. (the “Stock Option Plan”). To the extent the Company does not have a sufficient number of shares authorized, any excess grant will be subject to sufficient shares becoming available. These options will be non-statutory options. The grant will represent a three-year grant. The Employee will not be eligible to receive any further equity grant during the term of this Agreement. The options shall have an exercise price of $3.25. The grant date shall be the date first above written and the options will have a duration of six years. The options shall vest on the earlier to occur of the third anniversary of the Effective Date, the death of Employee, and a Change in Control, provided the Employee remains an employee of the Company through such date. Furthermore:

 

(i)        on the first anniversary of the Effective Date, one-third of the options will vest if shares of the Company have traded at $7.00 or more for at least ten consecutive trading days during the first year of this Agreement;

 

(ii)       on the first anniversary of the Effective Date, two-thirds of the options will vest if shares of the Company have traded at $9.50 or more for at least ten consecutive trading days during the first year of this Agreement;

 

(iii)      on the first anniversary of the Effective Date, all of the options will vest if shares of the Company have traded at $12.00 or more for at least ten consecutive trading days during the first year of this Agreement;

 

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(iv)      on the second anniversary of the Effective Date, one-third of the options which have not previously vested under (i) or (ii) will vest if shares of the Company have traded at $7.00 or more for at least ten consecutive trading days during the first two years of this Agreement;

 

(v)       on the second anniversary of the Effective Date, two-thirds of the options which have not previously vested under (i) or (ii) will vest if shares of the Company have traded at $9.50 or more for at least ten consecutive trading days during the first two years of this Agreement; and

 

(vi)      on the second anniversary of the Effective Date, all of the options which have not previously vested under (i) or (ii) will vest if shares of the Company have traded at $12.00 or more for at least ten consecutive trading days during the second year of this Agreement.

 

5.          Participation in Benefit Plans . Employee will be entitled to participate in all benefit plans provided to senior executives of the Company; provided that:

 

(a)       The Company will pay the full cost of medical and dental coverage for the Employee and his eligible dependents;

 

(b)       The Company will pay for the long term care policy currently in force for the Employee which provides a monthly benefit of $10,200, with home care covered at 100%.  The policy has a waiting period of 90 days and a benefit period of seven years; 

 

(c)       The Company will provide the Employee with an automobile allowance of $17,057 annually adjusted for increases in the consumer price index;

 

(d)       The Company will pay for the $5 million life insurance policy currently in force, the proceeds of which shall be used to purchase Employee’s stock from Employee’s estate in the event of Employee’s death.

 

6.          Termination . (a) The Company shall have the right to terminate this Agreement prior to the expiration of the term set forth in Section 3 only upon the conviction in a recognized court of law in the United States of Employee of theft or embezzlement of money or property, fraud, unauthorized appropriation of any tangible or intangible assets or property or any other felony involving dishonesty or moral turpitude. The Company shall have no obligations to the Employee for any period subsequent to the effective date of any termination of this Agreement pursuant to this Section 6, except for the payment of salary and benefits earned prior to such termination.

 

(b)       In the event that the Company terminates the Employee's employment for reason(s) other than those set forth in Section 6(a) prior to expiration of this Agreement under Section 3 hereof or if the Employee resigns for Good Reason, the Employee shall be entitled to continue to receive his Base Salary (plus bonuses calculated at Target level as set forth in Section

 

3

 


4 hereof) until the expiration of this Agreement under Section 3 hereof. During such period, the Employee shall have a duty to seek other employment, but shall not be required to accept any position other than a position (i) as a senior executive officer with the same general responsibilities that the Employee possessed at the Company at the time of the Employee's termination from the Company and (ii) with a company equal or larger in earnings and tangible net worth than the Company at the time of the Employee's termination. The Employee may, however, accept any full-time position at any level and at any salary with any entity, profit or non-profit, and the Employee, by accepting such employment, shall be conclusively deemed to have fulfilled his duty to seek employment under this Section 6. The Company shall be entitled to reduce the salary (including bonus) paid to the Employee during his employment by another entity by an amount equal to the amount earned by the Employee from any such Employment during such period. In the event that a dispute shall arise as to this Section 6(b), (i) the Company shall continue to pay the Employee's salary (including bonus) into an escrow account not under the control of the Company and (ii) the Company shall pay the legal fees and expenses incurred by the Employee in litigating any dispute under this Section 6 in the event that the Employee prevails in such dispute.

 

(c)       If the Company terminates the Employee’s employment for reason(s) other than those set forth in Section 6(a), or if the Employee resigns for Good Reason, in each event after a Change in Control (as defined in the Stock Option Plan), Employee will receive a lump sum payment equal to the his then Base Salary plus bonus at Target level, multiplied by the greater of (i) two or (ii) a fraction, the numerator of which is the number of months remaining in the term of this Agreement, and the denominator of which is twelve; provided however that such payment shall be limited to an amount which would not result in an “excess parachute payment” as that term is defined in Internal Revenue Code section 280G.

 

For these purposes, “Good Reason”  means, without the Employee's consent,  (i) a reduction in the Employee’s title or job responsibilities compared with the Employee’s title or job responsibilities on the date of this Agreement, (ii) any requirement that the Employee relocate to a work location more than 50 miles from his current location; or (iii) any material breach of this Agreement by the Company, which breach is not cured by the Company within 3 business days of the Employee notifying the Company that it is in breach.

 

7.          Disability .       If the Employee is completely disabled in the written opinion of a physician mutually agreeable to the Employee (or his legal representative) and the Company, or in the event that no such physician is chosen, if the Employee is unable to perform his services on substantially a full-time basis for a period in excess of six consecutive months, the Company shall be entitled to reduce the salary (including bonus) paid to the Employee by subtracting from such salary and bonus (i) the salary of such person as is hired by the Company to perform the office of President, Chief Executive Officer, and Chairman of the Board of Directors and (ii) any amounts received by the Employee from any disability insurance policy maintained by the Company in favor of the Employee; provided, however, that in no event shall the salary (including bonus) paid to the Employee plus any disability insurance proceeds actually paid to the Employee be less than the minimum annual salary applicable in such year. In no event will Employee's salary and bonus be reduced by more than 50% during the first three years of this Agreement.

 

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8.          Death . The Employee's employment shall be terminated upon the Employee's death; provided, however, that in such event the Company shall pay to the Employee's estate an amount equal to the Employee's salary plus bonus for a six-month period immediately following the Employee's death. Such payment may be made in a lump sum immediately following such termination or may be paid over the six-month period in accordance with the normal payroll practices of the Company, at the discretion of the Board.

 

 

9.

Confidential Information; Non-Competition; Enforceability .

 

(a)       The Employee shall not at any time, whether before or after the termination of this Agreement, divulge, furnish or make accessible to anyone (other than in the ordinary course of the business of the Company or any subsidiary thereof) any knowledge or information with respect to confidential or secret designs, processes, formulae, plans, devices, material, or research or development work of the Company or any subsidiary thereof, or with respect to any other confidential or secret aspect of the business of the Company or any subsidiary thereof.

 

(b)       For a period of one year after the termination of this Agreement, the Employee shall not, directly or indirectly, engage or become interested in (as owner, stockholder, partner or otherwise) the operation of any business similar to or in competition (direct or indirect) with the Company within the United States. If any court construes the covenant in this Section 9 or any part thereof, to be unenforceable because of its duration or the area covered thereby, the court shall have the power to reduce the duration or area to the extent necessary so that such provision is enforceable.

 

(c)       The covenants set forth in this Section 9 shall be deemed separable and the invalidity of any covenant shall not affect the validity or enforceability of any other covenant. If any period of time or limitation of geographical area stated in Section 9(b) is longer or greater than the maximum period or geographical area permitted by law, then the period of time or geographical area stated therein shall be deemed to be such maximum permissible period of time or geographical area, as the case may be. All parties recognize that the foregoing covenants are a prime consideration for the Company to enter into this Agreement and that the Company's remedies at law for damages in the event of any breach shall be inadequate. In the event that there is a breach of any of the foregoing covenants, the Company, shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance of any such covenants by the Employee or to enjoin the Employee from performing acts in breach of any such covenant.

 

10.        Tax Withholding . The Company shall withhold from any benefits payable under this Agreement all federal, state, local or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

 

11.        Effect of Prior Agreements . This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement

 

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between the Company or any predecessor of the Company and the Employee, including, without limitation, the Original Agreement and the Restated Agreement.

 

 

12.

General Provisions .

 

(a)        Nonassignability . Neither this Agreement nor any right or interest hereunder shall be assignable by the Employee or his beneficiaries or legal representatives without the Company's prior written consent; provided, however, that nothing in this Section 12(a) shall preclude (i) the Employee from designating a beneficiary to receive any benefit payable hereunder following his death, or (ii) the executors, administrators, or other legal representatives of the Employee or his estate from assigning any rights hereunder to the person or persons entitled thereto.

 

(b)        No Attachment . Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

 

(c)        Binding Agreement . This Agreement shall be binding upon, and inure to the benefit of, the Employee and the Company and their respective permitted successors and assigns.

 

(d)        Compliance with 409A. Any severance type of payments made under this Agreement will not commence until six months after the Employee’s termination of employment and shall otherwise comply with Code section 409A.

 

 

13.

Modification and Waiver .

 

(a)        Amendment of Agreement . This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto, and approved by a majority of the members of the Board who were not nominated by Employee.

 

(b)        Waiver . No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

14.        Severability . If, for any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, and each such other provision shall to the full extent consistent with law continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision,

 

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together with all other provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect.

 

15.        Headings . The headings of sections herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

16.        Governing Law . This Agreement has been executed and delivered in the State of New York, and its validity, interpretation, performance, and enforcement shall be governed by the laws of said State other than the conflict of laws provisions of such laws.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized, and the Employee has signed this Agreement, all as of the day and year first above written.

 

 

 

 

ACCESS INTEGRATED TECHNOLOGIES, INC.

 


By:


 /s/ Gary S. Loffredo

 

 

 

Gary S. Loffredo

Title: Senior Vice President—Business Affairs, General Counsel and Secretary

 

 

 

 

 

Employee

 


 /s/ A. Dale Mayo

 

 

A. Dale Mayo

 

 

 

7

 

 

 

STOCK OPTION AGREEMENT

 

as of _____________

 

The parties to this Non-Statutory Stock Option Agreement (this “Agreement”) are Access Integrated Technologies, Inc. (the “Company”), a Delaware corporation, and ______________ the “Optionee”), an employee of the Company.

 

The Company desires to have the Optionee serve as an employee of the Company and to provide the Optionee with an incentive to put forth maximum effort for the success of the business.

 

The Company has adopted the Second Amended and Restated 2000 Stock Option Plan of Access Integrated Technologies, Inc. (the “Plan”), as amended, to attract and retain highly competent key employees, directors and consultants and to provide an incentive in motivating these individuals to achieve long-term corporate objectives. Capitalized terms used in this Agreement, unless otherwise defined herein, shall have the meanings given to such terms in the Plan.

 

This Agreement sets forth the terms and conditions applicable to options to purchase shares of the Class A Common Stock of the Company, par value $0.001 per share (the “Common Stock”), granted to the Optionee under the Plan as of the date first above written (the “Grant Date”).

 

Accordingly, intending to be legally bound hereby, the parties agree as follows:

 

ARTICLE I

Grant of Options

 

1.1        Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Optionee as of the Grant Date the right and option to purchase from the Company up to, but not exceeding in the aggregate, __________ shares of Common Stock, at an option price of $_____ per share (the “Options”), and for the period beginning on the Grant Date and ending on ____________ (the “Option Term”).

 

 

1.2

The Options are non-statutory stock options.

 

1.3       The Options shall be subject to the terms and conditions of the Plan as well as the provisions of this Agreement. The Plan, a copy of which has been provided to the Optionee, is incorporated by reference herein in its entirety. In the event of any conflict between the Plan and this Agreement, the provisions of the Plan shall govern.

 


 

ARTICLE II

Vesting, Exercise and Tax Withholding

 

2.1       Unless sooner vested or terminated pursuant to this Agreement, the Options granted to the Optionee hereunder shall vest in accordance with the terms of Exhibit A attached hereto. On and after the date Options have vested, they may be exercised at any time and from time to time during the Option Term, subject to earlier termination in accordance with Article III. Upon the termination of any of the Options pursuant to Article III, the Options so terminated shall cease to be exercisable and the Optionee shall have no further rights under this Agreement with respect to the Options so terminated.

 

2.2       The Company, in its sole discretion, shall have the right (but shall not in any case be obligated), exercisable at any time after the Grant Date, to vest the Options, in whole or in part, prior to the time the Options would otherwise vest under the terms of this Agreement.

 

2.3        Vested Options shall be exercised by the Optionee (i) by delivering to the Company a Notice in the form set forth as Exhibit B hereto, together with a check payable to the order of the Company or such other consideration as may be appropriate pursuant to the Notice or (ii) in such other form as may be permitted by the Company.

 

2.4       The Company shall notify the Optionee of the amount of withholding tax or other tax, if any, that must be paid under federal and, where applicable, state and local law in connection with the exercise of the Options or the sale of shares of Common Stock subject to the Options. The Optionee shall meet his withholding requirement (i) by direct payment to the Company in cash of the amount of any taxes required to be withheld with respect to such exercise, or (ii) in such other form as may be permitted by the Company.

 

ARTICLE III

Termination of Employment

 

3.1       In the event of the termination of employment of the Optionee by the Optionee or the Company for any reason whatsoever other than death or permanent disability (as defined in Section 3.2), any Options that were vested prior to the date of such termination (and which were not previously exercised), together with any other Options designated in writing by the Committee, shall terminate on the earliest of (i) thirty days after the date of such termination, or (ii) the last day of the Option Term. Any Options that were not vested prior to the date of such termination and do not become vested pursuant to the immediately preceding sentence shall terminate as of the date of such termination and shall not be exercisable at any time thereafter. For purposes of this Article III, termination of employment with respect to an Optionee who is a director or consultant and who is not otherwise an employee of the Company shall mean voluntary or involuntary termination of Board service or the consulting relationship, as the case may be, for any reason.

 

 

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3.2       In the event of the termination of the employment of the Optionee by reason of death or permanent disability, any Options that were vested prior to the date of such termination (and which were not previously exercised), together with any other Options designated in writing by the Committee, shall terminate on the earliest of (i) one hundred eighty days after the date of such termination, or (ii) the last day of the Option Term. Any Options that were not vested prior to the date of such termination and do not become vested pursuant to the immediately preceding sentence shall terminate as of the date of such termination and shall not be exercisable at any time thereafter. As used in this Agreement, the term “permanent disability” means the Optionee being deemed to have suffered a disability that makes the Optionee eligible for immediate benefits under any long-term disability plan of the Company, as in effect from time to time.

 

3.3       In the event of termination of employment, the Company, in its sole discretion, shall have the right (but shall not in any case be obligated), exercisable on or at any time after the Grant Date, to permit an Option to be exercised, in whole or in part, after its expiration date described in Section 3.1 or Section 3.2, but not after the expiration of the Option Term.

 

3.4       In the event of a Change in Control (as defined in the Plan), all Options outstanding on the date of such Change in Control that have not previously vested or terminated under the terms of this Agreement shall become immediately and fully exercisable. Notwithstanding the foregoing, unless otherwise determined by the Board, no change in control of the Company shall be deemed to have occurred for purposes of determining a Participant's rights under this Plan if (i) the Participant is a member of a group that first announces a proposal which, if successful, would result in a Change of Control, which proposal (including any modifications thereof) is ultimately successful, or (ii) the Participant acquires a two percent or more equity interest in the entity that ultimately acquires the Company pursuant to the transaction described in clause (i) of this Section 3.4.

 

ARTICLE IV

Miscellaneous

 

4.1       The number and kind of shares subject to outstanding Options and the option price for such shares shall be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other change in capitalization with a similar substantive effect upon the Options. The Company shall have the power and sole discretion to determine the amount of the adjustment to be made in each case.

 

4.2       In the event of a Merger in which the Company is not the surviving corporation or pursuant to which a majority of the shares which are of the same class as the shares that are subject to outstanding Options are exchanged for, or converted into, or otherwise become shares of another corporation or other consideration, the Committee shall have the sole discretion to determine that (i) the surviving, continuing, successor or purchasing corporation, as the case may be (the “Acquiring Corporation”), will either assume the Company's rights and obligations under this Option Agreement or substitute awards in respect of the Acquiring

 

 

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Corporation's stock for outstanding Options or (ii) the outstanding Options shall be cancelled in exchange for such consideration as the Committee shall approve (based on the value of the consideration received in the Merger by holders of the same class of shares that are subject to outstanding Options).

 

4.3       After any Merger in which the Company shall be a surviving corporation, the Company may grant substituted options, replacing old options granted under a plan of another party to the Merger whose shares or stock subject to the old Options may no longer be issued following the Merger. The foregoing adjustments and manner of application of the foregoing provisions shall be determined by the Company in its sole discretion. Any such adjustments may provide for the elimination of any fractional shares which might otherwise become subject to any Options.

 

4.4       Nothing contained in this Agreement shall be deemed to confer upon the Optionee, in his capacity as a holder of Options, any right to prevent or to approve or vote upon any of the corporate actions described in this Article IV. The existence of the Options granted hereunder shall not affect in any way the right or the power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

4.5       Whenever the term “the Optionee” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom Options may be transferred by will or by the laws of descent and distribution, the term “the Optionee” shall be deemed to include such person or persons.

 

4.6       The Options granted hereunder are not transferable by the Optionee otherwise than by will or the laws of descent and distribution and are exercisable during the Optionee’s lifetime only by him or her. No assignment or transfer of the Options granted hereunder, or of the rights represented thereby, whether voluntary or involuntary, by the operation of law or otherwise (except by will or the laws of descent and distribution), shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon any such assignment or transfer the Options shall terminate and become of no further effect.

 

4.7       The Optionee shall not be deemed for any purpose to be a shareholder of the Company in respect of any shares as to which the Options shall not have been exercised as herein provided.

 

4.8       Nothing in this Agreement shall confer upon the Optionee any right to continue in the employ of the Company or shall affect the right of the Company to terminate the employment of the Optionee, with or without cause.

 

 

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4.9       Nothing in this Agreement or otherwise shall obligate the Company to vest any of the Options, to permit the Options to be exercised other than in accordance with the terms hereof or to grant any waivers of the terms of this Agreement, regardless of what actions the Company, the Board or the Committee may take or waivers the Company, the Board or the Committee may grant under the terms of or with respect to any options now or hereafter granted to any other person or any other options granted to the Optionee.

 

4.10     Notwithstanding any other provision hereof, the Optionee shall not exercise the Options granted hereunder, and the Company shall not be obligated to issue any shares to the Optionee hereunder, if the exercise thereof or the issuance (or such purchase) of such shares would constitute a violation by the Optionee or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Company shall be final and binding. The Company shall in no event be obligated to register any securities pursuant to the Securities Act of 1933 (as the same shall be in effect from time to time) or to take any other affirmative action in order to cause the exercise of the Options or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority.

 

4.11     No amounts of income or other benefits received by the Optionee pursuant to this Agreement shall be considered compensation for purposes of any pension or retirement plan, insurance plan or any other employee benefit plan of the Company unless otherwise provided in such plan.

 

4.12      Every notice or other communication relating to this Agreement shall be in writing and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, however, that unless and until some other address be so designated, all notices or communications by the Optionee to the Company shall be mailed or delivered to the Company at its office at 55 Madison Avenue, Morristown, New Jersey 07960 and all notices or communications by the Company to Optionee may be given to the Optionee personally or may be mailed to him or her.

 

4.13     This Agreement shall be governed by the laws of the State of Delaware applicable to agreements made and performed wholly within the State of Delaware (regardless of the laws that might otherwise govern under applicable conflicts of laws principles).

 

4.14     As used in this Agreement, unless the context otherwise requires (i) references to “Articles” or “Sections” are to articles or sections of this Agreement, (ii) “hereof”, “herein”, “hereunder” and comparable terms refer to this Agreement in its entirety and not to any particular part of this Agreement, (iii) references to any gender include references to all genders, (iv) “including” means including without limitation, and (v) headings of the various articles and sections are for convenience of reference only.

 

4.15     The Optionee agrees and acknowledges that he or she shall be obligated to cooperate with the Company and the underwriters in connection with any public offering of the Company’s securities and any transactions relating thereto and shall execute and deliver such

 

 

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agreements and documents, including without limitation, a lock-up agreement, as may be requested by the Company or the underwriters. The Optionee’s obligations under this Section 4.15 shall apply to any shares of Common Stock issued under the Plan as well as to any and all other securities of the Company or its successor for which such Common Stock may be exchanged or into which such Common Stock may be converted.

 

4.16     This Agreement sets forth a complete understanding between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings with respect thereto. Except as expressly set forth in this Agreement, the Company makes no representations, warranties or covenants to the Optionee with respect to this Agreement or its subject matter, including with respect to (i) the current or future value of the shares subject to the Options and (ii) whether the option price is equal to, less than or greater than the fair market value of a share of Common Stock. Any modification, amendment or waiver to this Agreement will be effective only if it is in writing signed by the Company and the Optionee. The failure of any party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of that or any other provision of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

 

ACCESS INTEGRATED TECHNOLOGIES, INC.

 

 

 

By:______________________

 

Title:

 

 

OPTIONEE:

 

 

_________________________

 

 

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EXHIBIT A

 

VESTING SCHEDULE

 

 

 

I.

Subject to Section II, below, Options shall vest as follows :

 

 


Date of Vesting

 

Cumulative Percentage
of Options Vesting

 

 

 

[Third] Anniversary of grant or Death of Employee

 

[100] percent

 

 

II.

Performance Based Acceleration :

 

[insert as appropriate]

 

 


EXHIBIT B

 

EXERCISE OF STOCK OPTION

 

Pursuant to the provisions of the Stock Option Agreement entered into as of __________ between Access Integrated Technologies, Inc. (the “Company”) and ___________, Optionee (the “Agreement”), I hereby exercise the Stock Option granted under the terms of the Agreement to the extent of _____ shares of the Common Stock of the Company (the “Shares”). I deliver to the Company herewith the following in payment for the Shares:

Method of Payment (check one of the following):

 

o

I have enclosed $_________________ in full payment for the option shares and any applicable withholding.

OR

 

o

I have enclosed stock certificate no(s) _____________ together with stock powers endorsed to the Company, representing ____________ shares of the Company’s Common Stock.

OR

 

o

I have given irrevocable instructions to a broker to deliver prompt payment of the exercise price for the option shares and any applicable withholding.

OR

 

o

A combination of the above methods or other form of payment approved by the Committee (describe):________________________________________________

__________________________________________________________________

 

 

Date:

 

 

 

 

 

 

 

Optionee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Social Security Number