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EXHIBIT 10.9
INTERNATIONAL HOME FOODS, INC.
1996 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
OCTOBER 29, 1997
XXXX XXXX
Re: Grant of Stock Option
Dear Xxxx:
The Board of Directors of International Home Foods, Inc. (the
"Company") has adopted the Company's 1996 Stock Option Plan (the "Plan") for
certain individuals, directors and key employees of the Company and its Related
Entities. A copy of the Plan is being furnished to you concurrently with the
execution of this Option Agreement and shall be deemed a part of this Option
Agreement as if fully set forth herein. Unless the context otherwise requires,
all terms defined in the Plan shall have the same meaning when used herein.
THE GRANT.
Subject to the conditions set forth below, the Company hereby grants
to you, effective as of SEPTEMBER 8, 1997 (the "Grant Date"), as a matter of
separate inducement and not in lieu of any salary or other compensation for
your services, the right and option to purchase (the "Option"), in accordance
with the terms and conditions set forth herein and in the Plan, an aggregate of
TWO MILLION, FIVE HUNDRED THOUSAND (2,500,000) shares of Common Stock of the
Company (the "Option Shares"), at the Exercise Price (as hereinafter defined).
As used herein, the term "Exercise Price" shall mean a price equal to $2.00 per
share subject to the adjustments and limitations set forth herein and in the
Plan. The Option granted hereunder is intended to constitute an Incentive
Option within the meaning of the Plan; however, you should consult with your
tax advisor concerning the proper reporting of any federal or state tax
liability that may arise as a result of the grant or exercise of the Option.
EXERCISE.
For purposes of this Option Agreement, the Option Shares shall be
deemed "Nonvested Shares" unless and until they have become "Vested Shares."
The Option Shares shall become "Vested Shares" in three equal, consecutive
annual installments, commencing on the first anniversary of the Grant Date,
provided that vesting shall cease upon your ceasing to be an employee of the
Company or a Related Entity as expressly provided in Section 3 hereof. The
Vesting Date shall be as follows:
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Vesting Date Option Shares Vested
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September 8, 1998 1/3 of Grant
September 8, 1999 1/3 of Grant
September 8, 2000 1/3 of Grant
Subject to the relevant provisions and limitations contained herein
and in the Plan, you may exercise the Option to purchase all or a portion of
the applicable number of Vested Shares at any time prior to the termination of
the Option pursuant to this Option Agreement. In no event shall you be
entitled to exercise the Option for any Nonvested Shares or for a fraction of a
Vested Share.
The unexercised portion of the Option, if any, will automatically, and
without notice, terminate and become null and void upon the expiration of ten
(10) years from the Grant Date; provided, however, if on the Grant Date you own
stock of the Company, or any Related Entity, possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Related Entity, such Option shall become null and void upon the
expiration of five (5) years from the Grant Date.
Any exercise by you of the Option shall be in writing addressed to the
Secretary of the Company at its principal place of business (a copy of the form
of exercise to be used will be available upon written request to the
Secretary), and shall be accompanied by a certified or bank check payable to
the order of the Company in the full amount of the Exercise Price of the shares
so purchased, or in such other manner as described in the Plan and approved by
the Committee.
TERMINATION OF EMPLOYMENT.
Upon the termination of your employment with the Company and any
Related Entity, you may, until the earlier of (x) 30 days from the date of such
termination or (y) the expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of the Vested Shares which
you were entitled to purchase immediately prior to such termination and,
thereafter, the Option shall, to the extent not previously exercised,
automatically terminate and become null and void, provided that:
in the case of termination of your employment with the Company
or any Related Entity due to death, you estate (or any Person
who acquired the right to exercise such Option by bequest or
inheritance or otherwise by reason of your death) may, until
the earlier of (x) the 181st day after the date of death or
(y) the expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of the
Vested Shares which you were entitled to purchase immediately
prior to the time of your death;
in the case of termination of your employment with the Company
or any Related Entity due to Disability, you or your legal
representative may, until the earlier of (x) the 181st day
after the date your employment was terminated or (y) the
expiration
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of the Option in accordance with its terms, exercise the
Option with respect to all or any part of the Vested shares
which you were entitled to purchase immediately prior to the
time of such termination;
in the case of termination of your employment with the Company
or any Related Entity (i) for Good Cause (as determined by the
Committee in its sole judgment in accordance with the Plan and
this Agreement) or (ii) as a result of the voluntary
termination by you of your employment without the consent of
the Company or any Related Entity, then you shall immediately
forfeit your rights under the Option except as to those Option
Shares already purchased.
TRANSFERABILITY.
Except as provided in Section 7 hereof, the Option and any rights or
interests therein are not assignable or transferable by you except by will or
the laws of descent and distribution, and during your lifetime, the Option
shall be exercisable only by you or, in the event that a legal representative
has been appointed in connection with your Disability, such legal
representative. Any Option Shares received upon exercise of this Option are
subject to the Company's Right of First Refusal (as defined in the Plan).
To assure the enforceability of the Company's right under this Section
4 in regard to the Right of First Refusal, each certificate or instrument
representing Common Stock or an Option held by you shall bear a conspicuous
legend in substantially the following form:
THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO THIS
AGREEMENT] ARE SUBJECT TO AN OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS
OF THE COMPANY'S ROLLOVER STOCK OPTION PLAN AND A STOCK OPTION AGREEMENT
ENTERED INTO PURSUANT THERETO. A COPY OF SUCH OPTION PLAN AND OPTION AGREEMENT
ARE AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE
OFFICES.
REGISTRATION.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable state
securities laws to permit exercise of the Option or to issue any Common Stock
in violation of the Securities Act or any applicable state securities laws.
You (or in the event of your death or, or the event a legal representative has
been appointed in connection with your Disability, the Person exercising the
Option) shall, as a condition to your right to exercise the Option, deliver to
the Company an agreement or certificate containing such representations,
warranties and covenants as the Company may deem necessary or appropriate to
ensure that the issuance of the Option Shares pursuant to such exercise is not
required to be registered under the Securities Act or any applicable state
securities laws.
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Certificates for Option Shares, when issued, shall have substantially
the following legend, or statements of other applicable restrictions, endorsed
thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE
DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE
ISSUER (WHICH, IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR
OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
The foregoing legend may not be required for Option Shares issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.
WITHHOLDING TAXES.
By acceptance hereof, you hereby (i) agree to reimburse the Company or
any Related Entity by which you are employed for any federal, state or local
taxes required by any government to be withheld or otherwise deducted by such
corporation in respect of your exercise of all or a portion o the Option; (ii)
authorize the Company or any Related Entity by which you are employed to
withhold from any cash compensation paid to you or on your behalf, an amount
sufficient to discharge any federal, state and local taxes imposed on the
Company, or the Related Entity by which you are employed, and which otherwise
has not been reimbursed by you, in respect of your exercise of all or a portion
of the Option; and (iii) agree that the Company may, in its discretion, hold
the stock certificate to which you are entitled upon exercise of the Option as
security for the payment of the aforementioned withholding tax liability, until
cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise which
is equal to the amount to be withheld.
PURCHASE OPTION.
If (i) your employment with the Company or a Related Entity terminates
for any reason at any time or (ii) a Change of Control occurs, the Company
and/or its designees) shall have the option (the "Purchase Option") to
purchase, and if the option is exercised, you (or your executor or the
administrator of your estate or the Person who acquired the right to exercise
the Option by bequest or inheritance in the event of your death, or your legal
representative in the event of your incapacity (hereinafter, collectively with
such optionee, the "Grantor") shall sell to the Company and/or its assignee(s),
all or any portion (at the Company's option) of the Option Shares and/or the
Option held by the Grantor (such Option Shares and Option collectively being
referred to as the "Purchasable Shares").
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The Company shall give notice in writing to the Grantor of the
exercise of the Purchase Option within one (1) year from the date of the
termination of your employment or engagement or such Change of Control. Such
notice shall state the number of Purchasable Shares to be purchased and the
determination of the Board of Directors of the Fair Market Value per share of
such Purchasable Shares. If no notice is given within the time limit specified
above, the Purchase Option shall terminate.
The purchase price to be paid for the Purchasable Shares purchased
pursuant to the Purchase Option shall be, in the case of any Option Shares, the
Fair Market Value per share times the number of shares being purchased, and in
the case of the Option, the Fair Market value per share times the number of
Vested Shares subject to such Option which are being purchased, less the
applicable per share Option exercise price. The purchase price shall be paid
in cash. the closing of such purchase shall take place at the Company's
principal executive offices within ten (10) days after the purchase price as
been determined. At such closing, the Grantor shall deliver to the purchasers)
the certificates or instruments evidencing the Purchasable shares being
purchased, duly endorsed (or accompanied by duly executed stock powers) and
otherwise in good form for delivery, against payment of the purchase price by
check of the purchasers). In the event that, notwithstanding the foregoing,
the Grantor shall have failed to obtain the release of any pledge or other
encumbrance on any Purchasable Shares by the scheduled closing date, at the
option of the purchasers) the closing shall nevertheless occur on such
scheduled closing date, with the cash purchase price being reduced to the
extent of all unpaid indebtedness for which such Purchasable Shares are then
pledged or encumbered.
To assure the enforceability of the Company's rights under this
Section 7, each certificate representing Option Shares subject to this Option
Agreement shall bear a conspicuous legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE
COMPANY'S 1996 STOCK OPTION PLAN AND A STOCK OPTION AGREEMENT
ENTERED INTO PURSUANT THERETO. A COPY OF SUCH OPTION PLAN AND
OPTION AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO THE
COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
The Company's rights under this Section 7 shall terminate upon the
consummation of a Qualifying Public Offering (as defined in the Plan).
CONSENT TO APPROVED SALE.
If the Board and the holders of a majority of the Common Stock then
outstanding approve the Sale of the Company to an independent third party (the
"Approved Sale"), you shall consent to and raise no objections against the
Approved Sale, and if the Approved Sale is structured as a sale of capital
stock, you shall agree to sell all of your Option Shares and rights to acquire
Option Shares
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on the terms and conditions approved by the Board of Directors and the holders
of a majority of the Common Stock then outstanding. You shall take all
necessary and desirable actions in connection with the consummation of the
Approved Sale. For purposes of this Section 10, an "independent third party"
is any person who does not own in excess of 5% of the Common Stock on a fully-
diluted basis, who is not controlling, controlled by or under common control
with any such 5% owner of the Common Stock and who is not the spouse, ancestor,
descendant (by birth or adoption) or descendent of a grandparent of any such 5%
owner of the Common Stock. If the Company or the holders of the company's
securities enter into any negotiation or transaction for which rule 506 (or any
similar rule then in effect) promulgated pursuant to the Securities Act may be
available with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), you shall, at the request of the
Company, appoint a purchaser representative (as such term is defined in Rule
501 promulgated pursuant to the Securities Act) reasonably acceptable to the
Company. If you appoint the purchaser representative designated by the
Company, the Company will pay the fees of such purchaser representative, but if
you decline to appoint the purchaser representative designated by the Company
you shall appoint another purchaser representative (reasonably acceptable to
the company), and you shall be responsible for the fees of the purchaser
representative so appointed.
ADJUSTMENTS.
In the event that, by reason of any merger, consolidation,
combination, liquidation, reorganization, recapitalization, stock dividend,
stock, split, split-up, split-off, spin-off, combination of shares, exchange of
shares or other like change in capital structure of the Company (collectively,
a "Reorganization"), the Common Stock is substituted, combined or changed into
any cash, property, or other securities, or the shares of Common Stock are
changed into a greater or lesser number of shares of Common Stock, the number
and/or kind of shares and/or interests subject to an Option and the per share
price or value thereof shall be appropriately adjusted by the Committee to give
appropriate effect to such Reorganization, such that the Option shall
thereafter be exercisable for such securities, cash, and/or other property as
would have been received in respect of the Option shares subject to the Option
had the Option been exercised in full immediately prior to such event. Any
fractional shares or interests resulting from such adjustment shall be
eliminated. Notwithstanding the foregoing, (i) each such adjustment shall
comply with the rules of Section 424(a) of the Code, and (ii) in no event shall
any adjustments be made which would render the Option not to be an "incentive
stock option" for purposes of Section 422 of the Code.
MISCELLANEOUS.
This Option Agreement is subject to all the terms, conditions,
limitations and restrictions contained in the Plan. In the event of any
conflict or inconsistency between the terms hereof and the terms of the Plan,
the terms of the Plan shall be controlling.
This Option Agreement is not a contract of employment and the terms of
your employment shall not be affected by, or construed to be affected by, this
option Agreement, except to the extent specifically provided herein. Nothing
herein shall impose, or be construed as imposing, any obligation (i) on the
part of the Company or any Related Entity to continue your employment, or (ii)
on your part to remain in the employ of the Company or any Related Entity.
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This Option Agreement may be amended as provided in Section 19 of the
Plan.
Please indicate your acceptance of all the terms and conditions of the
Option and the Plan by signing and returning a copy of this Option Agreement.
Very truly yours,
INTERNATIONAL HOME FOODS, INC.
By:
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Xxxxxxx Xxxxxx Xxxxx
Title:
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Senior Vice President
Date:
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October 29, 1997
ACCEPTED:
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Signature of Optionee
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Name of Optionee (Please Print)
Date:
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