XXXX IN THE BOX INC.
STOCK OPTION AGREEMENT
UNDER THE 2004 STOCK INCENTIVE PLAN
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 ten
years after the date hereof.
This Option shall become exercisable as follows:
(1) One fourth on _________.
(2) One fourth on _________.
(3) One fourth on _________.
(4) One fourth 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.
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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 425 of the Internal Revenue Code.
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(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. "Total and Permanent Disability" is defined as the inability to perform
the duties of your occupation, or any occupation for which you are qualified or
may reasonably become qualified by education, training or experience, because of
an illness or injury of unavoidable cause for a period of at least six (6)
months, provided the inability is determined or expected to be permanent by a
physician selected by the Company.
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
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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
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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.
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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.
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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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Xxxxxx X. Xxxxxx Signature
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Name
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Xxxxxx Xxxxxxx
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Xxxx, Xxxxx Zip
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Social Security Number
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