EXHIBIT 99.4
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement (the "Option Agreement") by
and between Xxxxx'x Restaurants, Inc. (the "Corporation") and _________________
("Optionee") evidencing the stock option (the "Option") granted this day to
Optionee under the terms of the Corporation's 1999 Stock Incentive Plan, and
such provisions are effective immediately. All capitalized terms in this
Addendum, to the extent not otherwise defined herein, shall have the meanings
assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed in accordance with Paragraph 6 of the Option
Agreement, the Option shall not accelerate upon the occurrence of that Corporate
Transaction, and the Option shall accordingly continue, over Optionee's period
of Service after the Corporate Transaction, to become exercisable for the Option
Shares in one or more installments in accordance with the provisions of the
Option Agreement. However, immediately upon an Involuntary Termination of
Optionee's Service within eighteen (18) months following such Corporate
Transaction, the assumed Option, to the extent outstanding at the time but not
otherwise fully exercisable, shall automatically accelerate so that the Option
shall become immediately exercisable for all the Option Shares at the time
subject to the Option and may be exercised for any or all of those Option Shares
as fully vested shares.
2. The Option shall not accelerate upon the occurrence of a Change
in Control, and the Option shall, over Optionee's period of Service following
such Change in Control, continue to become exercisable for the Option Shares in
one or more installments in accordance with the provisions of the Option
Agreement. However, immediately upon an Involuntary Termination of Optionee's
Service within eighteen (18) months following the Change in Control, the Option,
to the extent outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate so that the Option shall become immediately exercisable
for all the Option Shares at the time subject to the Option and may be exercised
for any or all of those Option Shares as fully vested shares.
3. The Option as accelerated pursuant to this Addendum shall remain
so exercisable until the EARLIER of (i) the Expiration Date or (ii) the
expiration of the one (1)-year period measured from the date of the Optionee's
Involuntary Termination.
4. For purposes of this Addendum the following definitions shall be
in effect:
(i) An INVOLUNTARY TERMINATION shall mean the
termination of Optionee's Service by reason of:
(A) Optionee's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(B) Optionee's voluntary resignation following
(A) a change in Optionee's position with the Corporation (or Parent or
Subsidiary employing Optionee) which materially reduces Optionee's
duties and responsibilities or the level of management to which
Optionee reports, (B) a reduction in Optionee's level of compensation
(including base salary, fringe benefits and target bonus under any
corporate performance based bonus or incentive programs) by more than
fifteen percent (15%) or (C) a relocation of Optionee's place of
employment by more than fifty (50) miles, provided and only if such
change, reduction or relocation is effected by the Corporation without
Optionee's consent.
(ii) A CHANGE IN CONTROL shall be deemed to occur in
the event of a change in ownership or control of the Corporation
effected through either of the following transactions:
(A) the acquisition, directly or indirectly, by
any person or related group of persons (other than the Corporation or
a person that directly or indirectly controls, is controlled by, or is
under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made
directly to the Corporation's stockholders, or
(B) a change in the composition of the Board over
a period of thirty-six (36) consecutive months or less such that a
majority of the Board members ceases, by reason of one or more
contested elections for Board membership, to be comprised of
individuals who either (i) have been Board members continuously since
the beginning of such period or (ii) have been elected or nominated
for election as Board members during such period by at least a
majority of the Board members described in clause (i) who were still
in office at the time the Board approved such election or nomination.
5. The provisions of Paragraph 1 of this Addendum shall govern the
period for which the Option is to remain exercisable following the Involuntary
Termination of Optionee's Service within eighteen (18) months after the
Corporate Transaction or Change in Control and shall supersede any provisions to
the contrary in Paragraph 5 of the Option Agreement.
IN WITNESS WHEREOF, Xxxxx'x Restaurants, Inc. has caused this Addendum
to be executed by its duly-authorized officer as of the Effective Date specified
below.
XXXXX'X RESTAURANTS, INC.
By: ____________________________________
Title: _________________________________
EFFECTIVE DATE: ____________________
