Homeland Holding Corporation
Xxxxx X. Xxxxxxxx Stock Option Agreement
This Stock Option Agreement ("Agreement") is made the day of
, 1998, by and between Homeland Holding Corporation, a Delaware
corporation ("Holding"), and Xxxxx X. Xxxxxxxx ("Holder").
Recitals
A. The Holder and Homeland Stores, Inc., a Delaware corporation
("Stores"), are parties to that certain letter agreement dated July 2, 1998
("Employment Agreement"), under which the Holder will become an officer and an
employee of Holding and Stores. Stores is a wholly- owned subsidiary of Holding.
B. To induce the Holder to enter into the Employment Agreement,
Holding has committed to grant the Holder the option to purchase an aggregate
of 50,000 shares of Common Stock, par value $0.01 per share ("Common Stock"),
of Holding.
C. This Agreement sets forth the terms and the conditions on which
Holding is granting such option to the Holder.
For good and valuable consideration, the receipt and the sufficiency
of which are hereby acknowledged, Holding and the Holder agree as follows:
1. Grant of Stock Option. Holding hereby grants to the Holder the
option ("Option") to purchase an aggregate of 50,000 shares of Common Stock of
Holding on the terms and subject to the conditions contained herein.
2. Purchase Price. The purchase price of the shares of Common
Stock subject to the Option shall be equal to the last sales price on the date
on which the Holder commences employment as an officer and an employee of
Holding and Homeland or, if no shares were traded on such date, on the
immediately preceding date on which shares were traded
Upon any exercise of the Option, unless otherwise permitted, the
Holder shall pay in cash the purchase price with respect to the shares of
Common Stock for which the Option is then being exercised in cash. The Board
of Directors of Holding ("Board") or, if there is a Stock Option Committee
("Committee"), the Committee may permit the Holder (a) to pay such purchase
price by transferring to Holding shares of Common Stock equal in value (as
determined by the Board or, if there is a Committee, the Committee) to the
purchase price or (b) to pay in cash the aggregate par value of the shares of
Common Stock for which the Option is then being exercised and to pay the balance
of the purchase price on terms and subject to conditions determined by the
Board or, if there is a Committee, the Committee.
3. Option Vesting Schedule. The Option shall be exercisable as
follows:
Number of Shares First Date of Exercise
10,000 First Anniversary of Date of Employment
10,000 Second Anniversary of Date of Employment
10,000 Third Anniversary of Date of Employment
10,000 Fourth Anniversary of Date of Employment
10,000 Fifth Anniversary of Date of Employment
The First Date of Exercise shall mean, with respect to each group
of shares of Common Stock covered by the Option, the date on which the Option
becomes exercisable with respect to such shares of Common Stock. Such shares
may be purchased either in whole or in part at any time and from time to time
on or after the First Date of Exercise and prior to the Expiration Date (as
defined below).
If there is a Change in Control (as defined below), the Option shall
be immediately exercisable in its entirety and the Holder shall have the right
to exercise the Option in its entirety at any time and from time to time prior
to the Expiration Date. The term "Change of Control" means (a) the earliest date
a new shareholder or a related group of new shareholders acquires beneficial
ownership of 30% or more of the then issued and outstanding Common Stock, (b)
the date on which Holding ceases to own all of the issued and outstanding
capital stock of Stores or (c) the date on which Holding or Stores disposes of
50% or more of its assets.
The Board or, if there is a Committee, the Committee may also
accelerate the vesting of the Option.
4. Term of Option. The Option shall expire and terminate on the
earliest of (a) ten (10) years from the date the Option is granted; (b)
termination of the employment of the Holder as an officer and an employee for
Cause (as defined in the Employment Agreement); and (c) forty-five (45) days
after the termination of the employment of the Holder as an officer or an
employee other than for Cause ("Expiration Date").
If the Holder dies or becomes disabled during the period in which
the Holder is an officer or an employee of Holding or within the period of
time, if any, after termination of such employment during which the Holder is
entitled to exercise the Option, the legal representative of the Holder shall
have the right to exercise the Option.
The Holder shall have none of the rights of a stockholder with
respect to the shares of Common Stock subject to the Option until the date of
issuance of the shares to the Holder and only after such shares are fully
paid.
5. Nontransferability. The Option is not assignable or
transferable by the Holder, other than by will or the laws of descent and
distribution. During the life of Holder, the rights of the Holder under this
Agreement may be exercised only by the Holder. Any attempted assignment or
transfer, voluntarily or by operation of law, that is not permitted by this
Section 5 shall be null and void and without effect.
6. Adjustments. The Board, or, if there is a Committee, the
Committee may adjust the number and the kind of shares covered by the Option
and the price per share thereof as the Board or the Committee, as the case may
be, determines, in its sole discretion and in good faith, is equitably required
to prevent dilution or enlargement of the rights of the Holder that would
otherwise result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of Holding;
(b) any merger, consolidation, separation, reorganization or partial or
complete liquidation; or (c) any other corporate transaction or any other event
having an effect similar to any of the foregoing events.
No fractional shares shall be issuable upon any exercise of the
Option following an adjustment and the aggregate purchase price shall be
appropriately reduced on account of any fractional share not issued.
7. Investment Intent. The Holder represents and agrees for
the Holder and the Holder's legal representatives that any shares of Common
Stock or other securities purchased under the Option will be acquired for
investment only and not with a view to distribution.
8. Exercise of Option. The Option may be exercised by
delivering to the Secretary of Holding notice in writing (in form satisfactory
to Holding) of the Holder's election to exercise the Option for a specified
and permitted number of shares of Common Stock and by paying the purchase price
for the shares of Common Stock for which the Option is then being exercised.
9. Governing Law; Interpretation. This Agreement shall
be subject to, and governed by, the internal laws of the State of Oklahoma,
irrespective of the fact that one or more of the parties now is, or may become
a resident of, a different state.
The interpretation and the construction by the Board or, if there
is a Committee, the Committee of any provision of this Agreement and any
determination by the Board or, if there is a Committee, in connection herewith
shall be final and conclusive. No member of the Board or the Committee, if any,
shall be liable for any action or any determination taken or made in good faith.
10. Section Headings. Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
construction or the interpretation of this Agreement.
IN WITNESS WHEREOF, Holding and the Holder have executed and
delivered this Agreement on the date first above written.
Homeland Holding Corporation
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
President and Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
