EXHIBIT 10.1
X. XXXXXXXXX'X CORPORATION
FORM OF 2005 INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into as of this 21st day of December, 2005 (the "Grant Date"), by and
between X. Xxxxxxxxx'x Corporation, a Tennessee corporation (together with its
Subsidiaries and Affiliates, the "Company"), and __________________ (the
"Optionee"). Capitalized terms not otherwise defined herein shall have the
meaning ascribed to such terms in the X. Xxxxxxxxx'x Corporation 2004 Equity
Incentive Plan (the "Plan").
WHEREAS, the Company has adopted the Plan, which permits the issuance
of stock options for the purchase of shares of the common stock, par value $.05
per share, of the Company (the "Shares"); and
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase Shares as hereinafter provided in accordance with the provisions of the
Plan;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Grant of Option.
(a) The Company grants as of the date of this Agreement
the right and option (the "Options") to purchase the following numbers of
Shares, in whole or in part (the "Option Stock"): ___ Shares at an exercise
price of $8.22 per Share and ___ Shares at an exercise price of $9.50 per Share,
on the terms and conditions set forth in this Agreement and subject to all
provisions of the Plan. The Optionee, holder or beneficiary of the Option shall
not have any of the rights of a shareholder with respect to the Option Stock
until such person has become a holder of such Shares by the due exercise of the
Option and payment of the Option Payment (as defined in Section 3 below) in
accordance with this Agreement.
(b) The Option shall be an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and this Agreement shall be interpreted in a manner consistent
therewith. In order to provide the Company with the opportunity to claim the
benefit of any income tax deduction which may be available to it upon the
exercise of the Option, and in order to comply with all applicable federal or
state tax laws or regulations, the Company may take such action as it deems
appropriate to insure that, if necessary, all applicable federal, state or other
taxes are withheld or collected from the Optionee.
2. Exercise of Option; Restrictions on Resale. The Optionee may
exercise the Option at any time after the date hereof. In consideration for the
Option, the Optionee agrees not to sell, contract to sell, grant any option to
purchase, transfer the economic risk of ownership in, make any short sale of,
pledge or otherwise transfer or dispose of any Shares (or any interest in any
Shares) (the foregoing are defined as the "Resale Restrictions") until December
21, 2007.
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Notwithstanding the foregoing, in the event the Optionee's employment or service
with the Company is terminated for any reason, 100% of the Shares underlying the
Options shall become free from the Resale Restrictions on the effective date of
termination.
3. Manner of Exercise. The Option may be exercised in whole or in
part at any time within the period permitted hereunder for the exercise of the
Option, with respect to whole Shares only, by serving written notice of intent
to exercise the Option delivered to the Company at its principal office (or to
the Company's designated agent), stating the number of Shares to be purchased,
the person or persons in whose name the Shares are to be registered and each
such person's address and social security number. Such notice shall not be
effective unless accompanied by payment in full of the Option Price for the
number of Shares with respect to which the Option is then being exercised (the
"Option Payment") and cash equal to the required withholding taxes as set forth
by Internal Revenue Service and applicable State tax guidelines for the
employer's minimum statutory withholding. The Option Payment shall be made in
cash or cash equivalents or in whole Shares that have been held by the Optionee
for at least six months prior to the date of exercise valued at the Shares' Fair
Market Value on the date of exercise (or next succeeding trading date if the
date of exercise is not a trading date), together with any applicable
withholding taxes, or by a combination of such cash (or cash equivalents) and
Shares. The Optionee shall not be entitled to tender Shares pursuant to
successive, substantially simultaneous exercises of the Option or any other
stock option of the Company. Subject to applicable securities laws and the
Resale Restrictions, the Optionee may also exercise the Option by delivering a
notice of exercise of the Option and by simultaneously selling the Shares of
Option Stock thereby acquired pursuant to a brokerage or similar agreement
approved in advance by proper officers of the Company, using the proceeds of
such sale as payment of the Option Payment, together with any applicable
withholding taxes. The Optionee shall notify the Company of any disposition of
shares acquired under this Agreement if such disposition occurs within two years
after the date of grant or one year after the date of exercise of the Option.
For purposes of this Agreement, "Fair Market Value" means the closing sales
price of the Shares on the American Stock Exchange.
4. Termination of Option. The Option will expire ten years from
the date of grant of the Option (the "Term") with respect to any then
unexercised portion thereof, unless terminated earlier as set forth below:
(a) Termination by Death. If the Optionee's employment by
the Company terminates by reason of death, or if the Optionee dies within three
months after termination of such employment for any reason other than Cause,
this Option may thereafter be exercised, to the extent the Option was
exercisable at the time of such termination, by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one year from the date of death or until the expiration of the Term of
the Option, whichever period is the shorter.
(b) Termination by Reason of Disability. If the
Optionee's employment by the Company terminates by reason of Disability, this
Option may thereafter be exercised, to the extent the Option was exercisable at
the time of such termination, by the Optionee or personal representative or
guardian of the Optionee, as applicable, for a period of three years from the
date of such termination of employment or until the expiration of the Term of
the Option,
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whichever period is the shorter; provided, however, that if the Option is
exercised following the one-year anniversary of the date of termination, the
Option shall thereafter be treated as a Non-Qualified Stock Option. For purposes
of this Agreement, "Disabled" or "Disability" means that the Optionee is
permanently unable to perform the essential duties of the Optionee's occupation.
(c) Termination by Normal Retirement or Early Retirement.
If Optionee's employment by the Company terminates by reason of Normal
Retirement or Early Retirement, this Option may thereafter be exercised by the
Optionee, to the extent the Option was exercisable at the time of such
termination, for a period of three years from the date of such termination of
employment or until the expiration of the Term of the Option, whichever period
is the shorter; provided, however, that if the Option is exercised following the
three-month anniversary of the date of termination, the Option shall thereafter
be treated as a Non-Qualified Stock Option. "Early Retirement" means retirement,
for purposes of the Plan with the express consent of the Company at or before
the time of such retirement, from active employment with the Company prior to
age 65, in accordance with any applicable early retirement policy of the Company
then in effect. "Normal Retirement" means retirement from active employment with
the Company on or after age 65.
(d) Termination for Cause. If the Optionee's employment
by the Company is terminated for Cause, this Option shall terminate immediately
and become void and of no effect.
(e) Other Termination. If the Optionee's employment by
the Company terminates voluntarily or is involuntarily terminated for any reason
other than for Cause, death, Disability or Normal Retirement or Early
Retirement, this Option may be exercised, to the extent the Option was
exercisable at the time of such termination, by the Optionee for a period of
three months from the date of such termination of employment or the expiration
of the Term of the Option, whichever period is the shorter.
5. No Right to Continued Employment. The grant of the Option
shall not be construed as giving Optionee the right to be retained in the employ
of the Company, and the Company may at any time dismiss Optionee from
employment, free from any liability or any claim under the Plan.
6. Adjustment to Option Stock. The Committee may make adjustments
in the terms and conditions of, and the criteria included in, this Option in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.2 of the Plan) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.
7. Amendments to Option. Subject to the restrictions contained in
Sections 6.2 and 14 of the Plan, the Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, the Option, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of the Optionee or any holder
or beneficiary
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of the Option shall not to that extent be effective without the consent of the
Optionee, holder or beneficiary affected.
8. Limited Transferability. During the Optionee's lifetime this
Option can be exercised only by the Optionee, except as otherwise provided in
Section 4(a) above or in this Section 8. This Option may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
Optionee other than (i) to a Permitted Transferee or (ii) by will or the laws of
descent and distribution. Any attempt to otherwise transfer this Option shall be
void. No transfer of this Option by the Optionee by will or by laws of descent
and distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and an authenticated copy of the
will and/or such other evidence as the Committee may deem necessary or
appropriate to establish the validity of the transfer. Any transfer of this
Option by the Optionee to a Permitted Transferee must be for no consideration
and, after the transfer, the Permitted Transferee shall have the sole
responsibility for determining whether and when to exercise the Option. A
Permitted Transferee may not transfer any such Option other than by will or the
laws of descent and distribution. For purposes of this Agreement, "Permitted
Transferee" means the Optionee's Immediate Family, a Permitted Trust or a
partnership of which the only partners are members of the Optionee's Immediate
Family. For purposes of this Agreement, "Immediate Family" means the Optionee's
children and grandchildren, including adopted children and grandchildren,
stepchildren, parents, stepparents, grandparents, spouse, siblings (including
half brothers and sisters), father-in-law, mother-in-law, daughters-in-law and
sons-in-law. For purposes of this Agreement, a "Permitted Trust" means a trust
solely for the benefit of the Optionee or Optionee's Immediate Family.
9. Reservation of Shares. At all times during the term of this
Option, the Company shall use its best efforts to reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of this
Agreement.
10. Plan Governs. The Optionee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions thereof.
The terms of this Agreement are governed by the terms of the Plan, and in the
case of any inconsistency between the terms of this Agreement and the terms of
the Plan, the terms of the Plan shall govern.
11. Severability. If any provision of this Agreement is, or
becomes, or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or the Award, or would disqualify the Plan or
Award under any laws deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award, and the remainder of the Plan
and Award shall remain in full force and effect.
12. Notices. All notices required to be given under this Option
shall be deemed to be received if delivered or mailed as provided for herein to
the parties at the following addresses, or to such other address as either party
may provide in writing from time to time.
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To the Company: X. Xxxxxxxxx'x Corporation
Suite 260
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx XX 00000
Attn: Chief Financial Officer
To the Optionee: The address then maintained with respect to the
Optionee in the Company's records.
13. Governing Law. The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of
Tennessee without giving effect to conflicts of laws principles.
14. Resolution of Disputes. Any dispute or disagreement which may
arise under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee. Any determination made hereunder shall be final, binding and
conclusive on the Optionee and the Company for all purposes.
15. Successors in Interest. This Agreement shall inure to the
benefit of and be binding upon any successor to the Company. This Agreement
shall inure to the benefit of the Optionee's legal representative and assignees.
All obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be binding upon the Optionee's heirs, executors,
administrators, successors and assignees.
16. Excessive Shares. In the event that the number of Shares
subject to this Option exceeds any maximum established under the Code for
Incentive Stock Options that may be granted to Optionee, or in the event that
this Option becomes first exercisable in any calendar year to obtain Common
Stock having a Fair Market Value (determined at the time of grant) in excess of
$100,000, this Option shall be treated as a Non-Qualified Stock Option to the
extent of such excess. The proceeding sentence shall be interpreted consistently
with the provisions of Section 422(d) of the Code.
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IN WITNESS WHEREOF, the parties have caused this Incentive Stock Option
Agreement to be duly executed effective as of the day and year first above
written.
X. XXXXXXXXX'X CORPORATION
By:
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Optionee:
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Please Print
Optionee:
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Signature
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