EXHIBIT 10.35
INCENTIVE STOCK OPTION AGREEMENT
A Stock Option (this "Option") is hereby granted by Lodgian, Inc., a
Delaware corporation (the "Company"), to the Eligible Individual named below
("Optionee"), for and with respect to common stock of the Company, $.01 par
value per share ("Common Stock"), subject to the following terms and conditions:
Name of Optionee: Xxxxxx X. Xxxxx
Title/Position: VP & Chief Accounting Officer
Number of Shares
Subject to Option: 7,500
Option Price Per Share: $12.00
Date of Grant: February 28, 2005
1. Grant of Option; Consideration. Subject to the provisions set forth
herein and the terms and condition of the Lodgian, Inc. Amended and Restated
2002 Stock Incentive Plan (the "Plan"), the terms of which are hereby
incorporated by reference, and in consideration of the agreements of Optionee
herein provided, the Company hereby grants to Optionee: (a) an option intended
to be an Incentive Stock Option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations issued
thereunder, to purchase from the Company the number of shares of Common Stock
set forth above, at the exercise price per share set forth above, and subject to
the exercise schedule set forth in Section 3 below. All capitalized but
undefined terms used in this Agreement shall have the meanings ascribed to them
in the Plan.
At the time of exercise of the Option, payment of the exercise price must
be made in cash or previously owned shares of Common Stock, which shares have
been held for the requisite period necessary to avoid a charge to the Company's
earnings for financial reporting purposes, or a combination thereof.
Notwithstanding the foregoing, if the committee of the Board of Directors of the
Company charged with the administration of the Plan (the "Committee"), in its
sole discretion agrees, Optionee may exercise this Option through a "cashless
exercise" procedure approved by the Committee involving a broker or dealer
approved by the Committee and affording Optionee the opportunity immediately to
sell some or all of the shares underlying the exercised portion of the Option in
order to generate sufficient cash to pay the Option exercise price and/or to
satisfy withholding tax obligations related to the Option.
2. Term of Option. The term of the Option granted hereunder shall be 10
years.
3. Exercise Schedule. The Option granted hereunder shall become vested and
exercisable according to the following schedule; provided, however, except as
expressly set forth below with respect to vesting upon death, all vesting shall
cease effective as of the date Optionee ceases to be employed by the Company or
a Parent or Subsidiary of the Company.
EXERCISE PERIOD
NUMBER OF SHARES EXERCISE COMMENCEMENT EXPIRATION
SUBJECT TO OPTION PRICE DATE DATE
----------------- -------- ------------ ----------
2,500 $ 12.00 2/28/06 2/28/15
2,500 $ 12.00 2/28/07 2/28/15
2,500 $ 12.00 2/28/08 2/28/15
Notwithstanding the foregoing, the right to exercise all of the Options
shall immediately vest upon the date of the Optionee's death.
4. Acceptance by Optionee. The exercise of the Option is conditioned upon
the acceptance by Optionee of the terms hereof as evidenced by Optionee's
execution of this agreement in the space provided therefor at the end hereof and
the return of an executed copy to the Secretary of the Company.
5. Termination of Employment For Reason Other Than Death or Disability. If
Optionee's employment with the Company and its Parent and all Subsidiaries is
terminated for any reason, other than the Optionee's death or total and
permanent disability (as defined in Section 105 (d) (4) of the Code), the Option
shall expire sixty (60) days following the date of termination of employment;
provided that the Committee, in its sole discretion, by written notice given to
Optionee, may permit Optionee to exercise the Option during a period ending on
the earlier of ninety (90) days after such termination of employment and the
date the Option expires in accordance with its terms.
6. Termination of Employment Due to Death or Disability. If Optionee's
employment with the Company and its Parent and all Subsidiaries is terminated
due to Optionee's death or total and permanent disability (as defined in Section
105 (d) (4) of the Code), the Option shall expire on the earlier of the first
anniversary of such termination of employment or the date the Option expires in
accordance with its terms. During such period, the Option (which became 100%
vested as referred to above) shall be exercisable in whole or in part to the
extent exercisable on the effective date of termination of employment (after
giving effect to accelerated vesting in the event of death) by a legatee or
legatees of the Option under Optionee's will, or by Optionee's executors,
personal representatives or distributes.
7. Notice of Exercise. Written notice of an election to exercise any
portion of the Option, specifying the portion thereof being exercised and the
exercise date, shall be given by Optionee, or Optionee's personal representative
in the event of Optionee's death, (i) by delivering such notice at the principal
executive offices of the Company no later than the exercise date, or (ii) by
mailing such notice, postage prepaid, addressed to the Secretary of the Company
at the principal executive offices of the Company at least three business days
prior to the exercise date.
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8. Exercise only by Optionee; No Transfer of Option. The option may be
exercised only by Optionee during Optionee's lifetime and may not be transferred
other than by will or the applicable laws of descent or distribution. The Option
shall not otherwise be transferred, assigned, pledged or hypothecated for any
purpose whatsoever and is not subject, in whole or in part, to execution,
attachment or similar process. Any attempted assignment, transfer, pledge or
hypothecation or other disposition of the Option, other than in accordance with
the terms set forth herein, shall be void and of no effect.
9. No Status as Shareholder. Neither Optionee nor any other person
entitled to exercise the Option under the terms hereof shall be, or have any of
the rights or privileges of, a shareholder of the Company in respect of any of
the shares of Common Stock issuable on exercise of the Option, unless and until
the purchase price for such shares shall have been paid in full and the shares
of Common Stock with respect to which its Option is exercised are issued, which
in no event will be delayed more than thirty (30) days from the date the Option
is exercised.
10. Cancellation; Change. In the event the Option shall be exercised in
whole, this agreement shall be surrendered to the Company for cancellation. In
the event the Option shall be exercised in part, or a change in the number or
designation of the Common Stock shall be made, this agreement shall be delivered
by Optionee to the Company for the purpose of making appropriate notation
thereon, or of otherwise reflecting, in such manner as the Company shall
determine, the partial exercise or the change in the number or designation of
the Common Stock.
11. Administrative Regulations. The issuance of the shares of Common Stock
pursuant to the exercise of this Option is subject to compliance with all
applicable laws, including without limitation, laws governing withholding from
employees and non-resident aliens for income tax purposes.
12. Tax Consequences. Optionee understands that the grant and exercise of
this Option, and the sale of shares obtained through the exercise of this
Option, may have tax implications that could result in adverse tax consequences
to Optionee. Optionee represents that Optionee has consulted with, or will
consult with, his or her tax advisor; Optionee further acknowledges that
Optionee is not relying on the Company for any tax, financial or legal advice;
and it is specifically understood by the Optionee that no representations are
made as to the qualification of this Option as an Incentive Stock Option or as
to any particular tax treatment with respect to the Option
13. Delaware Law Governs. The Option and this Agreement shall be
construed, administered and governed in all respects under and by the laws of
the State of Delaware, to the extent not inconsistent with Section 422 of the
Code, and regulations issued thereunder.
[Signatures appear on following page]
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LODGIAN, INC.
By: /s/ W. Xxxxxx Xxxxxxxxxx
-------------------------------
W. Xxxxxx Xxxxxxxxxx
President and Chief Executive Officer
The undersigned hereby accepts the Option subject to the terms and
conditions set forth in this Agreement.
/s/ Xxxxxx X. Xxxxx 2/28/05
--------------------- -------------
Date
Xxxxxx X. Xxxxx
000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
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