JACK IN THE BOX INC. STOCK OPTION AGREEMENT UNDER THE 2004 STOCK INCENTIVE PLAN
Exhibit 10.16.2
THIS AGREEMENT is made as of _________ between Xxxx in the Box Inc., a Delaware
corporation (the “Company”), and _________ (the “Optionee”).
RECITALS
The Compensation Committee (the “Committee”) of the Board of Directors of the Company which
administers the Company’s 2004 Stock Incentive Plan (the “Plan”) has granted to the Optionee as of
the date of this Agreement an option (the “Option”) to purchase shares of the Common Stock of the
Company, par value $0.01 per share (the “Common Stock”), on the terms and conditions set forth
herein.
AGREEMENT
In consideration of the foregoing and of the mutual covenants set forth herein and other good
and valuable consideration, the parties hereto agree as follows:
1. SHARES OPTIONED: OPTION PRICE. Optionee may purchase all or any part of an aggregate of
_________ shares of Common Stock, at the exercise price of _________ per share (the “Option
Exercise Price”), which shall be not less than the fair market value on the date hereof, on the
terms and conditions set forth herein.
2. OPTION TERM: TIMES OF EXERCISE OR SALE. The Option shall terminate and no portion of the
Option may be exercised in whole or in part more than seven years after the date hereof.
This Option shall become exercisable as follows:
| (1) | One third on _________. | ||
| (2) | One third on _________. | ||
| (3) | One third on _________. |
3. CONSIDERATION. The Option has been granted in consideration of the Optionee’s continued
employment with the Company or its wholly owned subsidiaries and acceptance by the Optionee of the
terms and conditions set forth below and in the Plan.
4. EXERCISE DATES. Subject to the terms and conditions herein and in the Plan, the Option
shall become exercisable, on each of the dates and to the extent provided on each date as provided
in Paragraph 2 above. Fractional shares may not be purchased or delivered hereunder. Once
exercisable and until terminated, all or any portion of the Option may be exercised from time to
time and at any time under procedures that the Company shall establish from time to time,
including, without limitation, procedures regarding the frequency of exercise and the minimum
number of option shares which may be purchased at any time.
5. EXERCISING THE OPTION. This Option may be exercised only by the Optionee or his or her
permitted transferees and only by the methods set forth herein. Subject to the terms and
conditions of the Plan, the Optionee may exercise all or any portion of the Option by giving notice
of exercise to the Company or its designee in the manner specified from time to time by the
Company,
accompanied by payment or instructions for payment in full of the Option Exercise Price for
the shares being purchased together with any amount which the Company may withhold upon such
exercise for applicable foreign, federal (including FICA), state and local taxes. Each such notice
shall specify the number of shares of Common Stock to be purchased, the Option Exercise Price, the
grant date, and such other matters as required by the Committee.
6. PAYMENT OF EXERCISE PRICE. The payment of the aggregate Option Exercise Price shall be
made (i) in cash or by cashiers check, (ii) by tender of Common Stock having a value not less than
the aggregate Option Exercise Price, (iii) by means of a payment under an arrangement with a broker
approved by the Company where payment is made pursuant to an irrevocable commitment by the broker
to deliver to the Company the proceeds from the sale of the Common Stock issuable upon exercise of
the Option, or (iv) any combination of the foregoing.
7. NON-TRANSFERABILITY. Except as otherwise provided in this Paragraph, this Option: (a)
shall be exercisable during the Optionee’s lifetime only be the Optionee, and is not transferable
other than by will or the laws of descent and distribution; (b) shall not be otherwise transferred,
assigned, pledged, hypothecated or disposed of in any way, whether by operation of law or
otherwise, and shall not be subject to execution, attachment or similar process; (c) shall
immediately terminate and become null and void upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this Option, other than as permitted herein, or upon the levy
of any execution, attachment or similar process upon this Option. Notwithstanding the foregoing,
with the approval of the Committee, the Option may be transferred to a trust for the benefit of the
Optionee or the Optionee’s “family member” as that term is defined in the General Instructions to
Form S-8 Registration Statement under the Securities Act.
8. EFFECT OF DEATH, DISABILITY, OR TERMINATION OF EMPLOYMENT.
(a) If Optionee ceases to be employed by the Company or a subsidiary because of Optionee’s
discharge for cause, as determined by the Company in its sole discretion, this Option shall expire
concurrently with such cessation of employment. As used herein, the term “subsidiary” shall mean
any present or future corporation which would be a “subsidiary corporation” of the Company as
defined in Section 424(f) of the Internal Revenue Code.
(b) Before the Optionee is eligible to retire under a Company sponsored retirement plan, if
Optionee ceases to be employed by the Company or a subsidiary for any reason other than for (i)
termination for cause, as determined by the Company in its sole discretion, or (ii) Optionee’s
death or Total and Permanent Disability (as defined below), then this Option, subject to earlier
termination pursuant to Paragraph 2 hereof, shall expire ninety days thereafter, and during such
period after Optionee ceases to be an employee, this Option shall be exercisable only as to those
shares, if any, with respect to which the Optionee could have exercised the option as of the date
of such cessation of employment.
(c) After the Optionee is eligible to retire under a Company sponsored retirement plan, if
Optionee ceases to be employed by the Company or a subsidiary for any reason other than (i)
termination for cause, as determined by the Company in its sole discretion, or (ii) Optionee’s
death or Total and Permanent Disability (as defined below), then during such period after Optionee
ceases to be an employee, this Option shall be exercisable only as to those shares, if any, (A)
with respect to which the Optionee could have exercised as of the date of such cessation of
employment and (B) for each twelve full months during which Optionee was in the employ of the
Company, or a subsidiary an additional 5% of the shares granted, (total exercisable shares not to
exceed original grant amount), of this Option, provided all rights under such Option shall expire,
in any event, on the date specified in Paragraph 2 hereof.
(d) If Optionee shall die while in the employment of the Company or a subsidiary, and such
deceased Optionee shall not have suffered Total and Permanent Disability within ninety days
prior to death, then this Option shall be exercisable by the person or persons to whom
Optionee’s rights under the Options all have passed by will or by applicable laws of descent and
distribution, as to all shares granted to Optionee without regard to exercise limitations as set
forth in Paragraph 2 hereof; provided, however, that all rights under such Option shall expire in
any event on the date specified in Paragraph 2 hereof.
(e) If Optionee shall suffer Total and Permanent Disability while in the employment of the
Company or a subsidiary, this Option shall be exercisable only as to those shares which Optionee
could exercise as of twelve months following the Optionee’s first day of absence from work with the
Company or a subsidiary due to Total and Permanent Disability, provided, however, that all rights
under such Option shall expire in any event on the date specified in Paragraph 2 hereof. As used
in this Agreement “Total and Permanent Disability” is defined as a physical or mental condition
that results in a total and permanent disability to such extent that the person is eligible for
disability benefits under the federal Social Security Act.
9. LEGALITY. The Company shall not be required to issue any shares of Common Stock upon the
exercise of the Option unless and until any then applicable requirements of the Securities and
Exchange Commission (the “SEC”), the California Department of Corporations or other regulatory
agencies having jurisdiction with respect to such issuance, and any exchanges upon which the Common
Stock may be listed, shall have been fully compiled with. Upon exercise of the Option at a time
when there is not in effect a registration statement under the Securities Act of 1933, as amended,
or any successor statute thereto, (the “Act”), relating to the shares of Common Stock issuable upon
exercise thereof, and available for delivery a prospectus meeting the requirements of Section
10(a)(3) of the Act, or if the rules and interpretations of the SEC so require, such shares may be
issued only if Optionee represents and warrants in writing to the Company that the shares are being
acquired for investment and not with view to the distribution thereof, and any certificated issued
upon exercise of the Option shall bear appropriate legends setting forth the restrictions on
transfer of such shares.
10. BUY OUT OF OPTION GAINS. At any time after an Option becomes exercisable, the Committee
shall have the right to elect, in its sole discretion and without the consent of the holder
thereof, to cancel such Option and to pay to the Optionee the excess of the fair market value of
the shares of Common Stock covered by such Option over the Option Exercise Price of such option at
the date the Committee provides written notice (the “Buy Out Notice”) of the intention to exercise
such right. Buyouts pursuant to this provision shall be effected by the Company as promptly as
possible after the date of the Buy Out Notice. Payments of buy out amounts may be made in cash, in
shares of Common Stock, or partly in cash and partly in shares of Common Stock, as the Committee
deems advisable. To the extent payment is made in Common Stock, the number of shares shall be
determined by dividing the amount of the payment to be made by the fair market value of a share of
Common Stock at the date of the Buy Out Notice. In no event shall the Company be required to
deliver a fractional share of Common Stock in satisfaction of this buy out provision. Payments of
any such buy out amounts shall be made net of any applicable foreign, federal (including FICA),
state and local withholding taxes. For the purposes of this provision, fair market value shall be
equal to the average of the high and low prices at which a share of the Company Common Stock is
traded on the New York Stock Exchange on the relevant date.
11. ADJUSTMENTS IN STOCK. Subject to the provisions of the Plan, if the outstanding shares of
the Company Common Stock of the class subject to this Option are increased or decreased, or are
changed into or exchanged for a different number or kind of shares or securities as a result of one
or more reorganizations, recapitalizations, stock splits, reverse stock splits, stock dividends and
the like, appropriate adjustments to be conclusively determined by the Committee, shall be made in
the number and/or type of shares or securities subject to this Option and in the Option Exercise
Price, so that the total purchase price of the shares then subject to this Option shall remain
unchanged.
12. TERMINATING TRANSACTIONS. Upon the dissolution or liquidation of the Company, this Option
shall terminate. Upon the occurrence of any (i) merger or consolidation in which the Company shall
not be the surviving entity (or survives only as a subsidiary of another entity whose shareholders
did
not own all or substantially all of the Company’s Common Stock immediately prior to such
transaction), (ii) sale of all or substantially all of the Company’s assets to any other person or
entity (other than a wholly-owned subsidiary), or (iii) the acquisition of beneficial ownership or
control of (including, without limitation, power to vote) more than 50% of the outstanding shares
of Common Stock by any person or entity (including a “group” as defined by or under Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (collectively a “Terminating
Transaction”), this Option shall terminate unless provision be made in writing in connection with
such transaction for the assumption of the Option or the substitution for the Option of a new
option covering the stock of a successor employer corporation, or a parent or subsidiary thereof or
of the Company, with appropriate adjustments as to the number and kind of shares and prices, in
which event this Option shall continue in the manner and under the terms so provided. If this
Option shall terminate pursuant to the foregoing sentence, the person then entitled to exercise the
Option shall have the right, at such time immediately prior to the consummation of the Terminating
Transaction as the Company shall designate, to exercise this Option to the full extent not
theretofore exercised, including any installments previously not exercisable prior to the
Terminating Transaction. Adjustments under this section shall be made by the Committee, whose
determination as to what adjustments shall be made and the extent thereof shall be conclusive. No
fractional shares of stock shall be issued under this Option or in connection with any such
adjustment.
13. EMPLOYMENT. Nothing in the Plan or in this agreement shall confer upon the Optionee any
right to continue in the employment of the Company or any of its subsidiaries.
14. PLAN CONTROLS. The Option and all terms and conditions set forth in this agreement are
subject in all respects to the terms and conditions of the Plan as may be amended from time to
time, (but no amendment shall adversely affect the Optionee’s rights under this Option) and any
rules and regulations promulgated by the Committee, which shall be controlling. All constructions,
interpretations, rule determinations or other actions taken by the Committee shall be final,
binding and conclusive on all interested parties, including the Company and its subsidiaries and
all former, present and future employees of the Company or its subsidiaries.
15. ARBITRATION. Any dispute or claim concerning any Options granted (or not granted)
pursuant to the Plan and this agreement and any other disputes or claims relating to or arising out
of the Plan and this agreement shall be fully, finally and exclusively resolved by binding
arbitration conducted in San Diego, California, by either (i) the American Arbitration Association
in accordance with its rules and procedures, or (ii) by any party mutually agreed upon by the
Committee and the claimant. By accepting an Option, the Optionee and the Company waive their
respective rights to have any disputes or claims tried by a judge or jury.
16. RESPONSIBILITY FOR EXERCISE. The Optionee hereby acknowledges that he or she is
responsible for taking any and all actions as may be required to exercise this Option in a timely
manner and for properly executing any such documents as may be required for exercise in accordance
with such rules and procedures as may be established by the Committee from time to time. By
signing this agreement the Optionee acknowledges that information regarding the procedures and
requirements for this exercise of the Option is available upon request. The Company shall have not
duty or obligation to notify the Optionee of the expiration date of this Option.
17. LAWS GOVERNING. The Option and the Plan shall be construed and enforced in accordance
with the laws of the State of Delaware without regard to the principles of conflicts of law.
18. RECEIPT OF PROSPECTUS. The Optionee hereby acknowledges that he or she has received a
copy of the prospectus relating to the Option and the shares covered thereby and the Plan.
19. OPTION AGREEMENT. This agreement has no cash value or other legal significance and the
entitlement of any rights here under shall be governed by the terms of the Plan and the books and
records maintained by the Company.
IN WITNESS WHEREOF, the Company has caused this Option to be executed on its behalf by its
President or one of its Vice Presidents and Optionee has hereunto set his hand on the day and year
first above written.
| XXXX IN THE BOX INC. | OPTIONEE | |||||
By: |
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