EXHIBIT 4.10
XXXXXXXXX FARMS, INC.
FORM OF
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement"), dated as of the
day of ________________, ____ (the "Date of Grant"), is delivered by Xxxxxxxxx
Farms, Inc., and its subsidiaries and affiliates (collectively referred to as
"SFI") to ________________________________________ (the "Optionee"), who is an
executive officer or key employee of SFI.
WHEREAS, the Board of Directors of Xxxxxxxxx Farms, Inc. (the "Board")
recommended stockholder approval of, the stockholders approved and the Board
adopted the Xxxxxxxxx Farms, Inc. Stock Option Plan (as amended and restated to
the date hereof, the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options
by the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) to executive officers and key employees of SFI to
purchase, or to exercise certain rights with respect to, shares of the Common
Stock of SFI, par value $1.00 per share (the "Stock"), in accordance with the
terms and provisions thereof; and
WHEREAS, the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) considers the Optionee to be a person
who is eligible for grant of an incentive stock option under the Plan, and has
determined that it would be in the best interest of SFI to grant the incentive
stock option documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. GRANT OF INCENTIVE STOCK OPTION.
(a) Subject to the terms and conditions hereinafter set forth, SFI,
with the approval and at the direction of the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan), hereby
grants to the Optionee, as of the Date of Grant, an option to purchase up to
_______ shares of Stock at a price of $__________ per share, which price per
share is at or above the present fair market value. Such option is hereinafter
referred
to as the "Incentive Stock Option" and the shares of stock purchasable upon
exercise of the Incentive Stock Option are hereinafter sometimes referred to as
the "Incentive Stock Option Shares." The Incentive Stock Option is intended by
the parties hereto to be, and shall be treated as, an "incentive stock option,"
pursuant to and as such term is defined under Sections 421 and 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
(b) This Incentive Stock Option is granted subject to the following
additional terms and conditions (if none, so indicate):
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2. TERM AND EXERCISE.
This Incentive Stock Option may be exercised during a period beginning
one year after and ending _____ years after the date of grant thereof (the
"option term"). Unless a shorter period is provided by the Board (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of the
Plan), this Incentive Stock Option shall be exercised in accordance with this
section 2. During the first year of the option term, no more than 25% of the
initial total number of shares covered by the Incentive Stock Option may be
exercised and purchased by the Optionee. During the second year of the option
term, no more than 50% of the initial total number of shares covered by the
Incentive Stock Option may be exercised and purchased by the Optionee, such
percentage to include the percentage, by number of shares, purchased in the
previous year of the option term. During the third year of the option term, no
more than 75% of the initial total number of shares covered by the Incentive
Stock Option may be exercised and purchased by the Optionee, such percentage to
include the percentages, by number of shares, previously purchased in earlier
years of the option term on a cumulative basis. During the fourth year and any
succeeding year of the option term, 100% of the initial total number of shares
covered by the Incentive Stock Option may be exercised and purchased by the
Optionee, such percentage to include the percentages, by number of shares,
previously purchased in earlier years of the option term on a cumulative basis.
No fractional shares shall be issued as a result of the exercise of this
Incentive Stock Option. No Incentive Stock Option shall be exercisable after the
expiration of its option term.
3. TERMINATION OF INCENTIVE STOCK OPTION.
(a) Except as provided in Sections 3(b), 3(c) and 3(d) of this
Agreement, the Incentive Stock Option, to the extent not previously exercised,
shall terminate immediately upon termination of the Optionee's employment or the
appointment or transfer of the Optionee to a position within SFI that does not
qualify for participation in the Plan.
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(b) Upon termination of the Optionee's employment by reason of death of
the Optionee, the Incentive Stock Option may be exercised, but only to the
extent exercisable on the date of such death, within one (1) year from and after
the date of the Optionee's death. The Incentive Stock Option may be exercised by
the executor or administrator of the deceased Optionee's estate or by a person
receiving the Incentive Stock Option by will or under the laws of descent and
distribution of the state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by reason of
permanent and total disability as defined under Section 22(e)(3) of the Code,
the Incentive Stock Option may be exercised, but only to the extent exercisable
on the date of such permanent and total disability, during the one (1) year
period following the date of such termination of the Optionee's employment.
(d) Upon termination of the Optionee's employment by reason of
retirement or disability other than as defined by Section 3(c) of this
Agreement, the Incentive Stock Option may be exercised, but only to the extent
exercisable on the date of such retirement or disability, during the three (3)
month period following the date of such termination of the Optionee's
employment.
(e) A transfer of the Optionee's employment from one affiliate of SFI
to another shall not be deemed to be a termination of the Optionee's employment.
(f) Notwithstanding any other provisions set forth herein or in the
Plan, if the Optionee shall (i) commit any act of malfeasance or wrongdoing
affecting SFI, (ii) breach any covenant not to compete or employment contract
with SFI, or (iii) engage in conduct that would warrant the Optionee's discharge
for cause (excluding general dissatisfaction with the performance of the
Optionee's duties, but including any act of disloyalty or any conduct clearly
tending to bring discredit upon SFI), then any unexercised portion of the
Incentive Stock Option shall immediately terminate and be void.
(g) Notwithstanding any other provisions set forth herein or in the
Plan, if during the period that the Optionee is employed by SFI or during the
two year period following the Optionee's voluntary termination of employment or
his termination by SFI for cause (excluding general dissatisfaction with the
performance of the Optionee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon SFI) the Optionee shall, without
the prior written consent of the Board, directly or indirectly, as employee,
agent, consultant, stockholder, director, co-partner or in any other individual
or representative capacity, own, operate, manage, control, engage in, invest in
or participate in
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any manner in, act as a consultant or advisor to, render services for, or
otherwise assist any person or entity that directly or indirectly engages in,
the business of producing, marketing, distributing or selling poultry products
anywhere that SFI is then doing business, then: (i) any unexercised portion of
the Incentive Stock Option shall immediately terminate and be void; and (ii) the
Optionee shall be required, and hereby agrees, upon thirty (30) days' written
notice from SFI, to return to SFI in immediately available funds the difference
between the exercise price and the fair market value on the date of exercise of
the exercised portion of the Incentive Stock Option. The provisions of this
Section 3(g) shall not apply, however, to the passive investment by the Optionee
in publicly traded common equity of any entity that is engaged in the business
of producing marketing, distributing or selling poultry products so long as such
investment does not exceed two percent of the outstanding common equity or such
entity.
The determination of whether the Optionee has voluntarily terminated
his employment, has been terminated for cause or has engaged in any conduct
described in the first sentence of the preceding paragraph shall be determined
by the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) in good faith and in its sole discretion, and any
such determinations by such body shall be final and binding on the Optionee.
4. EXERCISE OF INCENTIVE STOCK OPTION.
(a) During the Option Term, the Optionee may exercise the Incentive
Stock Option with respect to all or any part of the number of Incentive Stock
Option Shares then exercisable hereunder by giving the Board of SFI (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of the
Plan) written notice of intent to exercise substantially in the form attached
hereto as Exhibit A. The notice of exercise shall specify the number of
Incentive Stock Option Shares as to which the Incentive Stock Option is to be
exercised and the date of exercise thereof, which date shall be at least five
days after the giving of such notice unless an earlier date shall have been
mutually agreed upon. The Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) may require the Optionee to
certify that he has not engaged in any conduct described in the first sentence
of Section 3(g).
(b) Full payment (in U.S. dollars) by the Optionee of the option price
for the Incentive Stock Option Shares purchased shall be made on or before the
exercise date specified in the notice of exercise in cash, or, with the prior
written consent of the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan), in
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whole or in part through the surrender of previously acquired shares of Stock at
their fair market value on the exercise date.
On the exercise date specified in the Optionee's notice or as soon
thereafter as is reasonably practicable, SFI shall cause to be delivered to the
Optionee, a certificate or certificates for the Incentive Stock Option Shares
then being purchased (out of theretofore unissued Stock or reacquired or
surrendered Stock, as SFI may elect) upon full payment for such Incentive Stock
Option Shares. The obligation of SFI to deliver Stock shall, however, be subject
to the condition that if at any time the Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) shall determine in
its discretion that (i) the listing, registration or qualification of the
Incentive Stock Option or the Incentive Stock Option Shares upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any governmental regulatory body, or (iii) an agreement by the Optionee with
respect to the disposition of shares of Common Stock, is necessary or desirable
as a condition of, or in connection with, the Incentive Stock Option or the
issuance or purchase of Stock thereunder, the Incentive Stock Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent , approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan).
(c) If the Optionee fails to pay for any of the Incentive Stock Option
Shares specified in such notice or fails to accept delivery thereof, the
Optionee's right to purchase such Incentive Stock Option Shares may be
terminated by SFI. The date specified in the Optionee's notice as the date of
exercise shall be deemed to be the date of exercise of the Incentive Stock
Option, provided that payment in full for the Incentive Stock Option Shares to
be purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF SFI.
In the event of a reorganization, recapitalization, change of shares,
stock split, spinoff, stock dividend, reclassification, subdivision or
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of capital stock of SFI, the Board
(or, if applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan) shall make such adjustment as it deems appropriate in the number and
kinds of shares of Stock subject to the Incentive Stock Option or in the option
price; provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Incentive Stock Option.
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6. FAIR MARKET VALUE.
"Fair market value" as of any date and in respect of any share of
Common Stock means the closing price on such date or on the next business day,
if such date is not a business day, of a share of Common Stock reflected in the
NASDAQ National Market System traded under the Symbol SAFM, provided that, if
shares of Common Stock shall not have been traded on NASDAQ for more than 10
days immediately preceding such date or if deemed appropriate by the Board (or,
if applicable, a committee thereof appointed pursuant to Section 1.02(d) of the
Plan) for any other reason, the fair market value of shares of Common Stock
shall be as determined by the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) in such other manner as it
may deem appropriate. In no event shall the fair market value of any share of
Common Stock be less than its par value.
7. NO RIGHTS AS A STOCKHOLDER.
Neither the Optionee nor any personal representative shall be, or shall
have any of the rights and privileges of, a stockholder of SFI with respect to
any shares of Stock purchasable or issuable upon the exercise of this Incentive
Stock Option, in whole or in part, prior to the issuance of certificates for
shares of Common Stock to said person.
8. XXXXXXX XXXXXXX SHORT-SWING PROFIT LIABILITY EXEMPTION REQUIREMENTS.
Notwithstanding any other provision of this Agreement to the contrary,
the Incentive Stock Option granted under this Agreement shall be transferrable
(i) by the option holder only by will or under the laws of descent and
distribution of the state in which the option holder resided on the date of his
death , and (ii) by the Company pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security Act
or the Rules thereunder.
9. NO RIGHTS OF EMPLOYMENT.
Neither the granting of this Incentive Stock Option nor its exercise
shall be construed as granting to the Optionee any right with respect to
continuance of employment with SFI. Except as may otherwise be limited by a
written agreement between SFI and the Optionee, and acknowledged by the
Optionee, the right of SFI to terminate at will the Optionee's employment with
it at any time (whether by dismissal, discharge, retirement or otherwise) is
specifically reserved by SFI.
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10. AMENDMENT OF INCENTIVE STOCK OPTION.
The Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) may, without further action by the stockholders and
without the consent of or further consideration from the Optionee, amend,
condition or modify this Incentive Stock Option in response to changes in
securities or other laws or rules, regulations or regulatory interpretations
thereof applicable to the Incentive Stock Option or to comply with stock
exchange rules or requirements. The Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) may amend this
Incentive Stock Option otherwise with the written consent of the Optionee.
11. NOTICE.
Any notice to SFI provided for in this instrument shall be addressed to
it in care of its Secretary at its executive offices at Xxxx Xxxxxx Xxx 000,
Xxxxxx, Xxxxxxxxxxx 00000, and any notice to the Optionee shall be addressed to
the Optionee at the current address shown on the payroll records of SFI. Any
notice shall be deemed to be duly given if and when properly addressed and
posted by registered or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
This Incentive Stock Option is granted pursuant to the terms of the
Plan, which terms are incorporated herein by reference, and the Incentive Stock
Option shall in all respects be interpreted in accordance with the Plan. The
Board (or, if applicable, a committee thereof appointed pursuant to Section
1.02(d) of the Plan) shall interpret and construe the Plan and this instrument,
and its interpretations and determinations shall be conclusive and binding on
the parties hereto and any other person claiming an interest hereunder, with
respect to any issue arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in accordance with
the laws of the State of Mississippi, except to the extent preempted by federal
law, which shall to that extent govern.
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IN WITNESS WHEREOF, SFI has caused its duly authorized officers to
execute and attest this Incentive Stock Option Agreement, and to apply the
corporate seal hereto, and the Optionee has placed his or her signature hereon,
effective as of the Date of Grant.
XXXXXXXXX FARMS, INC.
ATTEST:
By:
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Name:
---------------------------------
Title:
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ACCEPTED AND AGREED TO:
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Optionee
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NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
XXXXXXXXX FARMS, INC.
ATTENTION: [ ] The Board of Directors
[ ] Stock Option Committee
Gentlemen:
Notice is hereby given of the undersigned's intent to exercise the
Incentive Stock Option granted to the undersigned pursuant to the Incentive
Stock Option Agreement dated _______________, ______ entered into by and between
the undersigned and Xxxxxxxxx Farms, Inc. The Incentive Stock Option shall be
exercised with respect to ________________________ (_____) shares of the common
stock, par value $1.00 per share, of Xxxxxxxxx Farms, Inc., at the exercise
price of $______________ per share. The date of exercise shall be
_______________, ______ which is five days or more after the date of this
notice.
In connection with the exercise of the Incentive Stock Option, the
undersigned acknowledges that no withholding of income taxes is required.
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Employee/Optionee
Dated: ________________, ______
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Exhibit A
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