EXHIBIT 10.37
AMERICA'S FAVORITE CHICKEN COMPANY
STOCK BONUS AGREEMENT - EXECUTIVE
THIS STOCK BONUS AGREEMENT (this "Agreement") is made and entered into as
of _____________________, 1996 by and between America's Favorite Chicken Company
(the "Company") and _________________________ ("Employee").
R E C I T A L S:
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A. The Company desires to grant to Employee shares of Common Stock, $0.01
par value per share, of the Company (the "Common Stock"), subject to the terms
and conditions set forth in this Agreement and the Company's 1996 Employee Stock
Bonus Plan. The date on which such grant shall occur shall be
____________________, 1996 (the "Closing Date").
B. In order to induce the Company to grant such shares of Common Stock,
Employee agrees to hold such shares and any other shares of Common Stock that
Employee now holds or hereinafter acquires subject to the restrictions and
interests created by this Agreement.
A G R E E M E N T:
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NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. Grant of Stock. The Company hereby agrees to grant to Employee,
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subject to the conditions and restrictions contained in this Agreement,
_____________ shares (individually, a "Share," and collectively, the "Shares")
of the Common Stock. In connection with the purchase of Shares hereunder,
Employee acknowledges that he or she has reviewed the memorandum regarding
Section 83(b) of the Internal Revenue Code of 1986, as amended, attached hereto
as Exhibit A.
2. Repurchase Option Upon Termination.
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(a) The Company's Repurchase Option. In the event that Employee's
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employment or other relationship with the Company and all of its directly or
indirectly owned subsidiaries (individually, a "Subsidiary," and collectively,
the "Subsidiaries") terminates for any reason on or prior to the fifth
anniversary of the Closing Date (including, without limitation, by reason of
Employee's death, disability, retirement, voluntary resignation or dismissal by
the Company or any of its Subsidiaries, with or without cause), the Company
shall have the option (the "Repurchase Option") to purchase from Employee all or
any portion of the Shares for a period of six months after the effective date of
such termination (the effective date of termination is hereinafter referred to
as the "Termination Date").
(b) Repurchase Price. The purchase price for each share to be
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purchased pursuant to the Repurchase Option (the "Repurchase Price") shall be
the Fair Market Value (as hereinafter defined) per Share (subject to adjustment
as provided in Section 2(d) below). For purposes hereof, the Repurchase Price
for shares of capital stock or other securities of the Company or any successor
or assign of the Company which are issued in respect of, in exchange for or in
substitution of the Shares by reason of any stock dividend, stock split, reverse
split, recapitalization, reclassification, combination, merger, consolidation or
otherwise shall be determined in the same manner and proportion as the
underlying Shares on which such shares of capital stock or other securities were
issued.
(c) Definition of Fair Market Value. As used herein, the "Fair Market
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Value" of a Share shall be determined by the Board of Directors on the basis of
the best available evidence, which determination shall be final and binding.
(d) Adjustments of Purchase Price Under Repurchase Option. The
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Repurchase Price for any Shares to be purchased pursuant to the Repurchase
Option shall be increased or decreased appropriately to reflect any distribution
of shares of capital stock or other securities of the Company or any successor
or assign of the Company which is made in respect of, in exchange for or in
substitution of the Shares by reason of any stock dividend, stock split, reverse
split, recapitalization, reclassification, combination, merger, consolidation or
otherwise.
(e) Exercise of Repurchase Option. The Repurchase Option shall be
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exercised by the Company by delivery to Employee, within the six-month period
specified in Section 2(a) hereof, of a written notice of its election to so
exercise. Such notice shall therein specify (i) the number of Shares which the
Company elects to repurchase; (ii) the calculation of the Repurchase Price for
such Shares; and (iii) a day, which shall not be more than 30 days after the
date such notice is delivered, on or before which Employee shall surrender (if
Employee has not already done so) the certificate or certificates representing
the Shares to be purchased pursuant to the Repurchase Option (with a stock
assignment or stock assignments duly endorsed in blank for Transfer) at the
principal office of the Company in exchange for a check, payable to Employee or
such person as Employee shall request, in the amount equal to the Repurchase
Price, calculated as provided in this Section 2, multiplied by the number of the
Shares to be purchased. If Employee fails to so surrender such certificate or
certificates on or before such date, from and after such date the Shares which
the Company elected to repurchase shall be deemed to be no longer outstanding,
and Employee shall cease to be a stockholder with respect to such Shares and
shall have no rights with respect thereto except only the right to receive
payment of the Repurchase Price, without interest, upon surrender of the
certificate or certificates therefor (with a stock assignment or stock
assignments duly endorsed in blank for Transfer). Notwithstanding the foregoing
in this Section 2(e), in the event any principal, interest, fees, expenses or
other amounts are owed to the Company by Employee (the "Outstanding Amount"),
the Repurchase Price for the number of the Shares to be repurchased hereunder
shall be reduced (to an amount not less than zero) by such Outstanding Amount,
which reduction shall be specified in reasonable detail in the Company's written
notice of election to exercise the Repurchase Option. If the Outstanding Amount
exceeds the Repurchase Price for the number of the Shares to be repurchased,
Employee shall remain obligated and liable to the Company for the unpaid balance
thereof.
(f) Termination of Repurchase Option. The Repurchase Option shall
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terminate upon (i) the Company's initial underwritten public offering of shares
of Common Stock registered under the Securities Act of 1933, as amended, on Form
S-1, that results in gross proceeds to the Company in excess of $25 million from
the sale of Common Stock or (ii) the acquisition by any person or group (as
defined in Section 13d of the Securities Act of 1934) of beneficial ownership of
more than fifty percent (50%) of the Company's then outstanding shares of Common
Stock.
3. Investment Representations. Employee represents and warrants to the
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Company as follows:
(a) Employee's Own Account. Employee is acquiring the Shares for
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Employee's own account and not with a view to or for sale in connection with any
distribution of the Shares.
(b) Access to Information. Employee (i) is familiar with the business
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of the Company and its Subsidiaries; (ii) has had an opportunity to discuss with
representatives of the Company and its Subsidiaries the condition of and
prospects for the continued operation and financing of the Company and its
Subsidiaries and such other matters as Employee has deemed appropriate in
considering whether to
2.
invest in the Shares; and (iii) has been provided access to all available
information about the Company and its Subsidiaries requested by Employee.
(c) Shares Not Registered. Employee understands that the Shares have
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not been registered under the Act or registered or qualified under the
securities laws of any state and that Employee may not Transfer the Shares
unless they are subsequently registered under the Act and registered or
qualified under applicable state securities laws, or unless an exemption is
available which permits Transfers without such registration and qualification.
4. Partial Termination. This Agreement shall terminate with respect to
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those Shares which are acquired by the Company pursuant to Section 2(a), upon
such acquisition.
5. Miscellaneous.
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(a) Legends on Certificates. Any and all certificates now or
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hereafter issued evidencing shares of Common Stock shall have endorsed upon them
a legend substantially as follows:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO REPURCHASE
BY THE COMPANY PURSUANT TO THAT CERTAIN STOCK BONUS AGREEMENT DATED AS
OF _____________, 1996 BY AND BETWEEN AMERICA'S FAVORITE CHICKEN
COMPANY AND THE ORIGINAL EMPLOYEE HEREOF, A COPY OF WHICH AGREEMENT IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF AMERICA'S FAVORITE
CHICKEN COMPANY."
Such certificates shall also bear such legends and shall be subject to such
restrictions on transfer as may be necessary to comply with all applicable
federal and state securities laws and regulations.
(b) Further Assurances. Each party hereto agrees to perform any
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further acts and execute and deliver any documents which may be reasonably
necessary to carry out the intent of this Agreement.
(c) Notices. Except as otherwise provided herein, all notices,
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requests, demands and other communications under this Agreement shall be in
writing, and if given by telegram, telecopy or telex, shall be deemed to have
been validly served, given or delivered when sent, if given by personal
delivery, shall be deemed to have been validly served, given or delivered upon
actual delivery and, if mailed, shall be deemed to have been validly served,
given or delivered three business days after deposit in the United States mails,
as registered or certified mail, with proper postage prepaid and addressed to
the party or parties to be notified, at the following addresses (or such other
address(es) a party may designate for itself by like notice):
If to the Company:
America's Favorite Chicken Company
0 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
If to Employee:
______________________________
______________________________
______________________________
3.
(d) Amendments; No Waiver. This Agreement may be amended only by a
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written agreement executed by both of the parties hereto.
(e) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Minnesota.
(f) Disputes. In the event of any dispute among the parties arising
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out of this Agreement, the prevailing party shall be entitled to recover from
the nonprevailing party the reasonable expenses of the prevailing party
including, without limitation, reasonable attorneys' fees and expenses.
(g) Entire Agreement. This Agreement and the instruments and
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agreements referenced herein constitute the entire agreement and understanding
among the parties pertaining to the subject matter hereof and supersede any and
all prior agreements, whether written or oral, relating hereto.
(h) Recapitalizations or Exchanges Affecting the Company's Capital
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Stock. The provisions of this Agreement shall apply to any and all shares of
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capital stock or other securities of the Company or any successor or assign of
the Company which may be issued in respect of, in exchange for or in
substitution of, the Shares by reason of any stock dividend, stock split,
reverse split, recapitalization, reclassification, combination, merger,
consolidation or otherwise, and such shares or other securities shall be
encompassed within the term "Shares" for purposes of this Agreement.
(i) No Rights. Nothing in this Agreement shall affect in any manner
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whatsoever the rights of the Company or any of its Subsidiaries to terminate
Employee's employment or other relationship for any reason, with or without
cause, subject to the terms and conditions of any agreement to which Employee
may be a party.
(j) Disclosure. The Company shall have no duty or obligation to
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affirmatively disclose to Employee, and Employee shall have no right to be
advised of, any material information regarding the Company or any of its
Subsidiaries at any time prior to, upon or in connection with the Company's
repurchase of the Shares under this Agreement at or after the cessation or
termination of Employee's employment or other relationship with the Company
and/or any of its Subsidiaries.
(k) Successors and Assigns. The Company may assign with absolute
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discretion any or all of its rights and/or obligations and/or delegate any of
its duties under this Agreement to any of its affiliates, successors and/or
assigns and this Agreement shall inure to the benefit of, and be binding upon,
such respective affiliates, successors and/or assigns of the Company in the same
manner and to the same extent as if such affiliates, successors and/or assigns
were original parties hereto. Without limiting the foregoing, the Company may
assign the Repurchase Option provided for in Section 2 of this Agreement to any
nominee, affiliate, successor and/or assign. Unless specifically provided herein
to the contrary, Employee may not assign any or all of its rights and/or
obligations and/or delegate any or all of its duties under this Agreement
without the prior written consent of the Company. Upon an assignment of any or
all of Employee's rights and/or obligations and/or a delegation of any or all of
its duties under this Agreement in accordance with the terms of this Agreement,
this Agreement shall inure to the benefit of, and be binding upon, Employee's
respective affiliates, successors and/or assigns in the same manner and to the
same extent as if such affiliates, successors and/or assigns were original
parties hereto.
(l) Headings. Introductory headings at the beginning of each section
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and subsection of this Agreement are solely for the convenience of the parties
and shall not be deemed to be a limitation upon or description of the contents
of any such section and subsection of this Agreement.
4.
(m) Counterparts. This Agreement may be executed in two counterparts,
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each of which shall be deemed an original and both of which, when taken
together, shall constitute one and the same Agreement.
(n) RIGHT IN OTHER CAPACITIES; EMPLOYEE'S REVIEW OF AGREEMENT.
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(i) ALTHOUGH AFTER HIS/HER RECEIPT OF THE SHARES, EMPLOYEE WILL BE OR
CONTINUE TO BE AN EMPLOYEE, OFFICER AND/OR DIRECTOR OF THE COMPANY (OR OF A
DIRECT OR INDIRECT SUBSIDIARY OR OTHER AFFILIATE OF THE COMPANY), EMPLOYEE
REPRESENTS THAT EMPLOYEE IS ACQUIRING THE SHARES FOR THEIR POTENTIAL AS AN
EQUITY INVESTMENT AND WITHOUT ANY EXPECTATION UNDER SECTION 302A.751 OF THE
MINNESOTA BUSINESS CORPORATION ACT OR OTHERWISE THAT THE OWNERSHIP OF THE SHARES
WILL ENTITLE EMPLOYEE TO ANY RIGHTS AS AN EMPLOYEE, OFFICER OR DIRECTOR OF THE
COMPANY (OR ANY DIRECT OR INDIRECT SUBSIDIARY OR OTHER AFFILIATE OF THE COMPANY)
THAT WOULD NOT EXIST IF EMPLOYEE WERE NOT A SHAREHOLDER. EMPLOYEE FURTHER
AGREES THAT NO CHANGE IN HIS OR HER EXPECTATIONS CONCERNING EMPLOYMENT OR
CONCERNING HIS OR HER PARTICIPATION AS AN OFFICER OR DIRECTOR, IF APPLICABLE,
WILL HAVE A REASONABLE BASIS UNLESS SET FORTH IN A WRITTEN AGREEMENT EXPRESSLY
GIVING EMPLOYEE ADDITIONAL RIGHTS AS TO SUCH MATTERS. THE COMPANY HEREBY
ADVISES EMPLOYEE THAT THE COMPANY IS ISSUING THE SHARES IN RELIANCE ON THE
FOREGOING REPRESENTATIONS OF EMPLOYEE AND IN THE EXPECTATION THAT EMPLOYEE WILL
NOT HAVE ANY RIGHT TO EMPLOYMENT BY THE COMPANY (OR BY ANY DIRECT OR INDIRECT
SUBSIDIARY OR OTHER AFFILIATE OF THE COMPANY) OR TO CONTINUE TO BE AN OFFICER OR
DIRECTOR OF THE COMPANY (OR OF ANY SUCH SUBSIDIARY OR OTHER AFFILIATE) BY VIRTUE
OF EMPLOYEE'S OWNERSHIP OF THE SHARES AND THAT THE COMPANY WOULD NOT ISSUE
SHARES TO EMPLOYEE IF EMPLOYEE HAD ANY CONTRARY EXPECTATIONS.
(ii) EMPLOYEE CONFIRMS THAT EMPLOYEE HAS CAREFULLY REVIEWED THIS
AGREEMENT AND UNDERSTANDS IT. EMPLOYEE FURTHER CONFIRMS THAT EMPLOYEE HAS BEEN
ADVISED TO CONSULT WITH LEGAL COUNSEL REPRESENTING EMPLOYEE CONCERNING THIS
AGREEMENT AND ANY OTHER AGREEMENTS BETWEEN OR AMONG EMPLOYEE, THE COMPANY AND
ANY OF ITS PRESENT OR PROSPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS AND/OR
EMPLOYEES.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
THE COMPANY:
AMERICA'S FAVORITE CHICKEN COMPANY
By: ________________________________
Name:
Title:
5.
EMPLOYEE:
_______________________________________
ADDRESS:
_______________________________________
_______________________________________
_______________________________________
6.
