STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Option Agreement")
dated as of August 19, 1996, provides for the grant of stock
options by VICORP Restaurants, Inc., a Colorado Corporation (the
"Company"), to J. Xxxxxxx Xxxxxxx, an employee of the Company ("Optionee").
RECITALS
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A. On August 26, 1994, the Company and Optionee
entered into a Stock Option Agreement pursuant to which Optionee
was granted the option to purchase 300,000 shares of the
Company's common stock, par value $.05 per share ("Common Stock")
at prices ranging from $15.00 per share to $30.17 per share, and
vesting on October 1, 1999 ("August 1994 Option").
B. Effective August 19, 1996, the Board of Directors
of the Company approved the grant of an option to Optionee as
hereinafter provided, subject to and conditioned upon the
surrender to the Company by Optionee of the August 1994 Option.
C. Optionee is desirous of surrendering to the
Company the August 1994 Option in consideration for the grant by
the Company to Optionee of an option on the terms set forth herein.
NOW, THEREFORE, in consideration of the covenants
contained herein, the Company and Optionee agree as follows:
I. SURRENDER AND CANCELLATION.
Optionee hereby surrenders all right, title and
interest of Optionee in the options granted to him in the August
1994 Option. The Company hereby cancels and terminates the
August 1994 Option Agreement and the options granted therein.
II. NUMBER OF SHARES, OPTION PRICE, AND VESTING.
A. The Company hereby grants to Optionee options (the
"Options") to purchase 300,000 shares of Common Stock for the
exercise price of $13.00 per share. Optionee shall not have any
rights as a shareholder with respect to the shares unless and
until one or more certificates for such shares are delivered to
him upon the exercise of one or more of the Options.
B. In the event that the outstanding shares of the
Company's common stock are increased or decreased or changed into
or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation, through
reorganization, merger, consolidation, liquidation, recapitalization,
stock split up, or a combination of shares or dividends payable in
stock of the class which is subject to this Option Agreement,
appropriate adjustment in the number of shares subject to the
Options shall be made so that the proportionate number of shares
subject to the Options shall be maintained as before the occurrence
of such event and an appropriate adjustment shall be made to the
exercise price.
C. Optionee acknowledges that the shares which are to
be reserved for issuance upon the exercise of the Options are not
at this time registered in accordance with applicable securities
laws. The Company agrees that upon receipt of a written request
by Optionee, it will, consistent with applicable securities laws
and regulations, promptly prepare and file with the Securities
and Exchange Commission an appropriate registration statement on
Form S-8 and/or Form S-3, depending upon whether the Options have
then been exercised (or any successor forms to such form subsequently
promulgated by the Securities and Exchange Commission) pertaining
to the shares covered by the Options and will use its reasonable
good faith efforts to cause such registration statement to be declared
effective as soon as practical thereafter. The Company will bear
the expense to prepare and file such registration statement.
III. PERIOD OF OPTION AND CONDITIONS OF EXERCISE.
A. The Options shall vest and become exercisable in
accordance with the following schedule:
Shares Vesting Date
------- ---------------
100,000 August 19, 1996
100,000 October 1, 1999
100,000 October 1, 2002
Except as provided hereinafter, once vested, the options shall
continue to be exercisable at any time or from time to time in
whole or in part until August 20, 2006.
B. If Optionee's employment with the Company is
terminated for Just Cause or he resigns without Just Grounds
prior to the vesting of the options, then any non-vested options
shall not vest and they shall be immediately forfeited upon such
termination or resignation.
C. If Optionee terminates his position as an Employee
of the Company without Just Grounds and for any reason other than
death or disability or is terminated for Just Cause, any
unexercised but vested options shall be canceled three (3) months
after the effective date of Optionee's termination of employment.
D. If Optionee dies, becomes permanently disabled,
resigns on Just Grounds or is terminated other than for Just
Cause ("Events"), the shares shall vest and be vested in
accordance with the following schedule:
Vesting Date Number of Shares
--------------- ----------------
October 1, 1996 50,000
October 1, 1997 50,000
October 1, 1998 50,000
October 1, 1999 50,000
Such Options must then be exercised within six (6)
months after vesting. All Options which have not previously
vested under paragraph A above and which do not vest upon the
occurrence of an Event under the above schedule in this paragraph D
shall be immediately forfeited upon the occurrence of the Event.
Disability and time of disability shall be determined by
the Board.
E. Upon a change of control of the Company, all of
the Options shall immediately vest and become exercisable in full
and shall continue to be exercisable at any time or from time to
time in whole or in part until August 20, 2006. The terms "Just
Cause" and "Just Grounds" as used in this Option Agreement shall
have the same meaning as defined in Optionee's Employment
Agreement with the Company dated August 26, 1994. The term
"Change of Control" as used in this Option Agreement shall mean:
1. Any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended) becomes the beneficial owner, directly
or indirectly, of securities of the Company representing
greater than or equal to fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities;
2. During any period of twelve (12) months,
individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reason
to constitute a majority thereof unless the election, or the
nomination for election by the Company's shareholders of
each new director was approved by a vote of at least a
majority of the directors then still in office who were
directors at the beginning of the period; or
3. A person (as defined in clause (1) above)
acquires (or, during the twelve (12) month period ending on
the date of the most recent acquisition by such person or
group of persons, has acquired) gross assets of the Company
that have an aggregate fair market value greater than or
equal to over fifty percent (50%) of the fair market value
of all of the gross assets of the Company immediately prior
to such acquisition or acquisitions.
IV. NON-TRANSFERABILITY OF OPTION; DEATH OF OPTIONEE.
The Options shall not be transferable otherwise than by
will or by the laws of descent and distribution; and the Options
may be exercised, during the lifetime of Optionee, only by
Optionee, and in the event of the death of Optionee, only by
Optionee's estate. In particularly, the options may not be
assigned, transferred (except as provided above), pledged or
hypothecated in any way, shall not be assignable by operation of
law, except as expressly provided above and shall not be subject
to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition
of the Options contrary to the provisions hereof shall be null
and void and without effect.
V. EXERCISE OF OPTION.
The Options shall be exercised in the following manner:
Optionee or Optionee's estate shall deliver to the Company
written notice specifying the number of shares which he elects to
purchase and a date, not more than ten (10) business days after
the date of such notice, upon which such shares shall be
purchased and payment therefor shall be made. Upon delivery to
the Company on such date of (i) cash or certified or bank
cashier's check payable to the order of the Company, or (ii)
shares of Common Stock, or (iii) the irrevocable direction of
Optionee to withhold Common Stock from those exercised, in an
amount equal to the product of the number of shares specified in
such notice and the exercise price, together with payment, by (i)
cash or certified or bank cashier's check payable to the order of
the Company, (ii) or shares of Common Stock, or (iii) the
irrevocable direction of Optionee to withhold Common Stock from
those exercised, or (iv) by such other method as shall be
acceptable to the Company, of such amount, if any, as the Company
deems necessary to satisfy its liability to withhold federal,
state or local income or other taxes incurred by reason of the
exercise or the transfer of shares thereupon, the shares so
purchased shall thereupon be promptly delivered to Optionee or
Optionee's estate. Provided, however, that if any securities or
other law or regulation of any commission or agency of competent
jurisdiction shall require the Company or the exercising Optionee
to take any action with respect to the shares acquired by the
exercise of an Option, then the date upon which the Company shall
issue or cause to be issued the certificate or certificates for
the shares shall be postponed until full compliance has been made
with all such requirements of law or regulation; provided that
Optionee shall use Optionee's best efforts to take all necessary
action to comply with such requirements of law or regulation.
Neither Optionee nor Optionee's estate will be deemed to be a
holder of any shares pursuant to exercise of the Options until
the date of the issuance of a stock certificate to him for such shares.
VI. NOTICES.
Any notice required or permitted under this Option
Agreement shall be deemed given when delivered personally, or
when deposited in a United States Post Office as registered mail,
postage prepaid, addressed, as appropriate, either to Optionee at
the address Optionee last gave to the Company as his home address
or such other address as he may designate in writing or to the
Corporation at its principal offices.
VII. FAILURE TO ENFORCE NOT A WAIVER.
The failure of the Company to enforce at any time any
provision of this Option Agreement shall in no way be construed
to be a waiver of such provision or of any other provision
hereof.
VIII. SEVERABILITY.
If any provision of this Option Agreement shall be held
to be illegal, invalid or unenforceable under any applicable law,
then such contravention or invalidity shall not invalidate the
entire Option Agreement. Such provision shall be deemed to be
modified to the extent necessary to render it legal, valid and
enforceable, and if no such modification shall render it legal,
valid and enforceable, then this Option Agreement shall be
construed as if not containing the provision held to be invalid,
and the rights and obligations of the parties shall be construed
and enforced accordingly.
IX. COMPLETE AGREEMENT.
This Option Agreement between Optionee and the Company
embodies the complete agreement and understandings with respect
to the subject matter hereof between the parties and supersede
and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to
the subject matter hereof in any way.
X. GOVERNING LAW.
This Option Agreement shall be governed by and
construed according to the laws of the State of Colorado.
IN WITNESS WHEREOF, the Company has executed this
Option on the day and year first above-written.
VICORP Restaurants, Inc.
a Colorado corporation
By /s/ Xxxxxxx X. Xxxxxxxxxxxx
_________________________________
Xxxxxxx X. Xxxxxxxxxxxx, Chairman
The undersigned hereby accepts and agrees to all terms
and provisions of the foregoing Option Agreement.
/s/ J. Xxxxxxx Xxxxxxx
____________________________
J. Xxxxxxx Xxxxxxx, Optionee
