EXHIBIT 10(A)
EMPLOYEE AWARD AGREEMENT
NON-QUALIFIED AND INCENTIVE STOCK OPTIONS
PURSUANT TO
THE BOMBAY COMPANY, INC.
1996 LONG-TERM INCENTIVE STOCK PLAN
This Award Agreement (the "Agreement") is made effective as of the 3rd
day of June 2005, between THE BOMBAY COMPANY, INC., a Delaware corporation (the
"Company"), and XXXXX X. XXXXXXXX, an employee of the Company or one of its
subsidiaries (the "Employee").
RECITALS
A. The Company and Employee are parties to that certain Employment
Agreement, dated August 20, 2003 (the Employment Agreement"), whereby Employee
may from time to time receive option grants to purchase shares of the Company's
$1.00 par value common stock (the "Shares"). Capitalized terms used in this
Agreement but not defined herein shall have the meanings given to them under
the Employment Agreement.
B. The Company desires to carry out the purposes of The Bombay
Company, Inc. 1996 Long Term Incentive Stock Plan (the "Plan") by affording
Employee the opportunity to purchase Shares in accordance with the terms of
this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Award. The Company hereby grants to Employee the
right and option (the "Option" or the "Award") to purchase an aggregate of
125,000 Shares (the "Option Shares"), such Shares being subject to adjustment
as provided in paragraph 8 hereof, and on the terms and conditions herein set
forth. Of the Shares granted pursuant to this Option, 34,304 Shares are
granted as an Incentive Stock Option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (an "Incentive Stock Option"), and
such Shares are referred to herein as "ISO Shares." The remaining 90,696
Option Shares are granted as a Non-Qualified Option (a "Non-Qualified Option"),
and such Shares are referred to herein as "NQO Shares."
2. Purchase Price. The purchase price of the Option Shares shall be
$5.83 per Share, such purchase price being 100% of the fair market value of
such Shares on the date first appearing above (the "Date of Grant").
3. Exercise of Award; ISO Savings Clause.
(a) ISO Shares. Unless expired as provided in paragraph 5
below, and subject to the provisions of paragraph 3(d) and paragraph 6 below,
the Option for ISO Shares may be exercised from time to time in whole or in
part for not more than (i) 25% of the entire number of ISO Shares at any time
after the first anniversary of the Date of Grant, (ii) 50% of the entire number
of ISO Shares at any time after the second anniversary of the Date of Grant;
(iii) 75% of the entire number of ISO Shares at any time after the third
anniversary of the Date of Grant; and (iv) the entire number of ISO Shares at
any time after the fourth anniversary of the Date of Grant.
(b) NQO Shares. Unless expired as provided in paragraph 5
below, and subject to the special provisions of paragraph 6 below, the Option
for NQO Shares may be exercised from time to time in whole or in part for not
more than (i) 25% of the entire number of NQO Shares at any time after the
first anniversary of the Date of Grant, (ii) 50% of the entire number of NQO
Shares at any time after the second anniversary of the Date of Grant; (iii) 75%
of the entire number of NQO Shares at any time after the third anniversary of
the Date of Grant and (iv) the entire number of NQO Shares at any time after
the fourth anniversary of the Date of Grant.
(c) Accelerated Vesting. Subject to the provisions of paragraph
3(d) below, if Employee is terminated without Cause or on account of his death
or permanent disability, or if Employee resigns upon Company Breach, then the
Option shall immediately become exercisable for any portion of the Option
Shares for which the Option would have otherwise become exercisable during the
one year period after such termination or resignation. Further, notwithstanding
the provisions of Paragraph 3 above relating to the vesting of this Option in
installments, at any time prior to the fourth anniversary of the Date of Grant,
in the event the Company's annual earnings per share, measured as of the end of
the Company's fiscal year, equals or exceeds fifty cents ($.50) per share, the
Option Shares shall be 100% vested effective with the public announcement of
such earnings.
(d) Savings Clause for ISO Shares. Notwithstanding anything to the
contrary contained herein, in no event may the sum of the fair market value of
(i) the ISO Shares (determined on the Date of Grant in accordance with
paragraph 2 above) plus (ii) all other options to purchase Shares or other
securities of the Company's subsidiaries granted to Employee as Incentive Stock
Options (determined on the date of grant of such other options) that become
exercisable by Employee for the first time during any calendar year exceed
$100,000. To the extent any Option to purchase ISO Shares granted under this
Agreement exceeds this limit or otherwise fails to qualify as an Incentive
Stock Option, such Option (or any such portion thereof) shall be a Non-
Qualified Option.
4. Manner of Exercise; Payment of Purchase Price.
(a) Subject to the terms and conditions of this Agreement, the
Award shall be exercised by written notice to the Company at its principal
office. Such notice shall state the election to exercise the Award and shall
specify (i) the total number of Option Shares and (ii) the number of ISO Shares
and NQO Shares sought to be exercised pursuant to the notice. Such notice of
exercise shall be signed by Employee and shall be irrevocable when given. If
the limitations specified in paragraph 3(d) above prevent Employee from being
able to exercise the Award for the number of ISO Shares specified in the
notice, the Company shall promptly notify Employee in writing of the number of
ISO Shares that are available, and the remaining portion of the Award subject
to the exercise notice shall be a Non-Qualified Option. At any time while this
Award remains exercisable, the Company shall, within five business days of the
receipt of a request from the Employee, provide Employee with a calculation of
the number of Option Shares that are eligible for Incentive Stock Option
treatment.
(b) The notice of exercise shall be accompanied by the full
payment of the purchase price for the Option Shares in cash by certified check
or bank cashiers check or through satisfactory arrangements for payment by a
broker representing Employee in the sale of some or all of the Option Shares.
Subject to approval of an authorized Committee of the Board of Directors (the
"Committee"), payment of the purchase price may be accomplished by the
surrender of stock certificates representing Shares that (i) have an aggregate
fair market value on the date of exercise equal to the purchase price of the
Option Shares and (ii) have not been acquired from the Company within six (6)
months prior to the date of the notice of exercise, or by a combination of cash
and such Shares.
(c) Upon receipt of the purchase price, and subject to the
terms of paragraph 11, a certificate representing the Option Shares exercised
shall be registered in the name of the person or persons so exercising the
Award. In the event the Award shall be exercised pursuant to paragraph 7, by
any person or persons other than Employee, such notice shall be accompanied by
appropriate proof satisfactory to the Company of the right of such person or
persons to exercise the Award. All Shares issued as a result of an exercise of
the Award as provided herein shall be fully paid and non-assessable.
(d). The payment of withholding tax liability by Employee shall
be a condition precedent to the Company's obligation to issue any certificates
for Shares resulting from an exercise of the Award.
5. Exercise and Expiration of Award. This Award, if not exercised,
shall expire and become null and void upon the expiration of three (3) months
after Employee ceases to be employed by the Company or any of its subsidiaries
(subject to being extended based upon service duration with the Company).
Notwithstanding the above, if Employee retires from the Company or any of its
subsidiaries (as determined by the Committee in its sole discretion), the Award
may, at the Committee's discretion remain exercisable for a period not to
exceed 36 months following such retirement; provided, however, that any Option
to purchase ISO Shares that Employee elects to exercise more than three (3)
months after such retirement shall be a Non-Qualified Option. In the event of
Employee's death, the Award shall be exercisable for a period of 12 months
following such death. Further, if (i) a Change of Control occurs and (ii)
within twelve months of the Change of Control, Employee's employment is
terminated other than for Cause or by Employee's resignation without Company
Breach (collectively, a "Change of Control Event"), then the Award shall
continue to be exercisable for a period of 12 months following such
termination; provided, however, that any Option to purchase ISO Shares that
Employee elects to exercise more than three (3) months after such termination
shall be a Non-Qualified Option. Notwithstanding the above, the Award shall,
without exception, become null and void once a period of 10 years shall have
lapsed since the Date of Grant. Except as provided in paragraph 3(c) and
paragraph 6 herein, only those portions of this Award vested on or before the
date of termination of Employee's employment may be exercised.
6. Acceleration upon Change of Control. Notwithstanding any
provision of this Agreement to the contrary, but subject to the limitations
contained in paragraph 3(d), this Award shall become immediately exercisable
for the entire number of Option Shares covered hereby upon the occurrence of a
Change of Control Event, and shall continue to be exercisable until the end of
the applicable period provided in paragraph 5 above.
7. Award Non-transferable. Unless permitted by law and regulation
and approved by the Committee, the Award and any right related thereto shall
not be transferable by Employee otherwise than by will or by the laws of
descent and distribution and may be exercised during Employee's lifetime, only
by Employee. Upon the death of Employee, the Award may be exercised by
Employee's executor, administrator, legatee or distributee, as the case may be.
8. Adjustments of Shares Subject to Award. If any Shares shall at
any time be changed or exchanged by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split, combination of
shares or a dividend payable in stock, then the aggregate number of Option
Shares subject to this Agreement and the purchase price of such Option Shares
shall be automatically adjusted such that Employee's proportionate interest
shall be maintained as before the occurrence of such event. The determination
of any such adjustment by the Committee shall be final, binding and conclusive.
9. No Contract. This Agreement does not constitute a contract for
employment and shall not affect the right of the Company to terminate
Employee's employment for any reason whatsoever.
10. Rights as Shareholder. This Award shall not entitle Employee or
any permitted transferee to any rights of a shareholder of the Company or to
any notice of proceedings of the Company with respect to any Option Shares
issuable upon exercise of this Award unless and until the Award has been
exercised for such Shares.
11. Restriction on Issuance of Shares. The Company shall not be
required to issue or deliver any certificates for Shares purchased upon the
exercise of an Award prior to the obtaining of any approval from any
governmental agency which the Company shall, in its sole discretion, determine
to be necessary or advisable, and the completion of any registration or other
qualification of such Shares under any state or federal law or ruling or
regulations of any governmental body which the Company shall, in its sole
discretion, determine to be necessary or advisable. In addition, if shares
reserved for issuance upon exercise of Awards shall not then be registered
under the Securities Act of 1933 the Company may, upon Employee's exercise of
an Award, require Employee or his permitted transferee to represent in writing
that the Shares being acquired are for investment and not with a view to
distribution, and may xxxx the certificate for the Shares with a legend
restricting transfer and may issue stop transfer orders relating to such
certificate to the transfer agent.
12. Lapse of Award. The Agreement shall be null and void in the event
Employee shall fail to sign and return a counterpart hereof to the Company
within thirty (30) days of its delivery to Employee.
13. Binding Effect. This Agreement shall be binding upon this heirs,
executors, administrators, and successors of the parties hereto.
14. Governing Instrument and Law. This Award and any Shares issued
hereunder shall in all respects be governed by the terms and provisions of the
Plan, and by the laws of the State of Texas, and in the event of a conflict
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall control. Moreover, in the event of any conflict between the terms
of this Agreement and the terms of the Employment Agreement, the terms of the
Employment Agreement shall control.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
effective as of the date first above written.
THE BOMBAY COMPANY, INC.
By:/S/ XXXXXXX X. XXXXXXXXXXXX
Xxxxxxx X. Xxxxxxxxxxxx, Vice
President, Secretary and General
Counsel
Accepted and Agreed:
/S/ XXXXX X. XXXXXXXX Date: June 3, 2005
Xxxxx X. Xxxxxxxx
