Exhibit 10.24
HOMETOWN AUTO RETAILERS, INC.
FORM OF STOCK OPTION AGREEMENT
Dated: _________, 1998
Hometown Auto Retailers, Inc. a Delaware corporation (the "COMPANY"),
grants to _____________ (the "OPTIONEE"), a stock option to purchase a total of
_______ shares of the Company's Common Stock, par value $.001 per share, at the
initial public offering price of $______ per share on the terms and conditions
set forth herein and in the Company's 1998 Stock Option Plan.
1. DURATION.
This option shall expire five (5) years from the date hereof (the
"Termination Date").
2. CHARACTERIZATION OF OPTIONS.
The option granted pursuant to this Agreement is intended to constitute and
qualify as an Incentive Stock Option, as defined by Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). That part of the option that
does not meet the criteria of an Incentive Stock Option, as defined in Section
422 of the Code, shall constitute a non-qualified option, subject to Section 83
of the Code.
3. ANTI-DILUTION PROVISIONS.
(a) If there is any stock dividend, stock split, or combination of
shares of Common Stock of the Company, the number and amount of shares then
subject to this option shall be proportionately and appropriately adjusted; no
change shall be made in the aggregate purchase price to be paid for all shares
subject to this option, but the aggregate purchase price shall be allocated
among all shares subject to this option after giving effect to the adjustment.
(b) If there is any other change in the Common Stock of the Company,
including recapitalization, reorganization, sale or exchange of assets, exchange
of shares, offering of subscription rights, or a merger or consolidation in
which the Company is the surviving corporation, an adjustment, if any, shall be
made in the shares then subject to this
option as the Board of Directors may deem equitable. Failure of the Board of
Directors to provide for an adjustment pursuant to this subparagraph prior to
the effective date of any Company action referred to herein shall be conclusive
evidence that no adjustment is required in consequence of such action.
(c) If the Company is merged into or consolidated with any other
corporation, or if it sells all or substantially all of its assets to any other
corporation, then either (i) the Company shall cause provisions to be made for
the continuance of this option after such event, or for the substitution for
this option of an option covering the number and class of securities which the
Optionee would have been entitled to receive in such merger or consolidation by
virtue of such sale if the Optionee had been the holder of record of a number of
shares of Common Stock of the Company equal to the number of shares covered by
the unexercised portion of this option, or (ii) the Company shall give to the
Optionee written notice of its election not to cause such provision to be made
and this option shall become exercisable in full (or, at the election of the
Optionee, in part) at any time during a period of 20 days, to be designated by
the Company, ending not more than 10 days prior to the effective date of the
merger, consolidation or sale, in which case this option shall not be
exercisable to any extent after the expiration of such 20-day period. In no
event, however, shall this option be exercisable after the Termination Date.
4. INVESTMENT REPRESENTATION; LEGEND ON CERTIFICATES; SPECIAL RESTRICTION
ON RESALE.
The Optionee agrees that until such time as a registration statement
under the Securities Act of 1933 becomes effective with respect to the option
and/or the stock, the Optionee is taking this option and will take the stock
underlying this option, for his own account, for investment and not with a view
to the resale or distribution thereof. The Company shall have the right to
place upon the face of any stock certificate or certificates evidencing shares
issuable upon the exercise of this option such legend as the Board of
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Directors may prescribe for the purpose of preventing disposition of such shares
in violation of the Securities Act of 1933, as now or hereafter provided.
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5. NON-TRANSFERABILITY.
This option shall not be transferable by the Optionee other than by
will or by the laws of descent or distribution, and is exercisable during the
lifetime of the Optionee only by the Optionee.
6. CERTAIN RIGHTS NOT CONFERRED BY OPTION.
The Optionee shall not, by virtue of holding this option, be entitled
to any rights of a stockholder in the Company.
7. EXPENSES.
The Company shall pay all original issue and transfer taxes with
respect to the issuance and transfer of shares of Common Stock of the Company
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith.
8. EXERCISE OF OPTIONS.
(a) This option shall become exercisable in accordance with its
terms, as follows:
[one-third] shares commencing one year after the date of grant;
[one-third] additional shares commencing on each of the second and
third anniversaries of the date of grant; provided the
Optionee shall then be an employee of the Company.
(b) An option shall be exercisable by written notice of such
exercise, in the form prescribed by the Board of Directors, to the Secretary or
Treasurer of the Company at its principal office. The notice shall specify the
number of shares for which the option is being exercised (which number, if less
than all of the shares then subject to exercise, shall be 50 or a multiple
thereof) and shall be accompanied by payment (i) in cash or by check in the
amount of the full exercise price of such options, (ii) made by the surrender to
the Company of that number of options having an aggregate spread value (ie. the
difference between the exercise price of an option and the closing price of the
Common Stock on the Nasdaq SmallCap Market or other national quotation system or
stock exchange on which the Common Stock is listed on the date of the written
notice of exercise) equal to the aggregate exercise price of the options
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being exercised, or (iii) in such other manner as the Board shall deem
acceptable. No shares shall be delivered upon exercise of any option until all
laws, rules and regulations which the Board of Directors may deem applicable
have been complied with.
(c) The person exercising an option shall not be considered a record
holder of the stock so purchased for any purpose until the date on which he is
actually recorded as the holder of such stock in the records of the Company.
(d) The option shall be exercisable only so long as the Optionee
shall continue to be an employee of the Company and within the thirty day period
after the date of termination of his employment to the extent it was exercisable
on the day prior to the date of termination. Notwithstanding the foregoing, in
no event shall the option be exercisable after the Termination Date.
(e) Notwithstanding the provision of Section 8(d) above, in the
event the Optionee is unable to continue his employment with the Company as a
result of his total and permanent disability (as defined in Section 105(d)(4)
of the Code), he may, but only within three (3) months from the date of
disability, exercise the option to the extent he was entitled to exercise it
at the date of such disability. Notwithstanding the foregoing, in no event
shall the option be exercisable after the Termination Date.
(f) Notwithstanding the provisions of Section 8(d) above, in the
event of death of the Optionee:
(i) during the term hereof, the option may be exercised, at any
time within twelve (12) months following the date of death, by the Optionee's
estate or by a person who acquired the right to exercise this option by bequest
or inheritance, but only to the extent of the right that would have accrued had
the Optionee continued living one (1) month after the date of death, provided
that at the time of his death the Optionee is an employee of the Company and
shall have been in Continuous Status (as defined in the Plan) as an employee
from the date hereof; or
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(ii) within thirty (30) days after the termination of Continuous
Status as an employee, the option may be exercised, at any time within three (3)
months following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.
Notwithstanding the provisions of this Section (f), in no event shall this
option be exercisable after the Termination Date.
9. Nothing herein shall be deemed to create any employment agreement or
guaranty of continued employment or limit in any way the Company's right to
terminate Optionee's employment arrangement at any time.
HOMETOWN AUTO RETAILERS INC.
By:
------------------------------
[Name], [Title]
Accepted as of the date
first set forth above.
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OPTIONEE
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SCHEDULE OF OPTIONEES
Officers
Name No. of Option Shares
Xxxxxx Xxxxxx 36,500
Xxxxx Xxxxxx 36,500
Xxxxxxxxx X. Xxxxxxxx 3,000
Xxxxxx X. Xxxxxxxx 37,000
Xxxxxxx X. Xxxxxx Xx. 20,000
Xxxxx Xxxxxx 20,000
Xxxxxxx X. Xxxxxxxx Xx. 14,000
Xxxxxx Xxxxxx 10,000
Employees
Name No. of Option Shares
Xxxxx Xxxxxx 10,000
Xxxxxx X. Shaker 10,000
Xxxxx Xxxxxx 2,000
Xxxx Xxxxxxx 2,000
Xxxxxxxxxxx Xxxxxxxx 4,000
Xxxxxx X. Xxxxxx 4,000
Xxxxxx X. Xxxxxx 8,000
Xxxxxxx Xxxxxxxxxxxx 8,000
Xxxxxx Xxxxxxx 15,000
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