EXHIBIT 10.3
1996 STOCK INCENTIVE PLAN
Incentive Stock Option Agreement
This Agreement is by and between Cafe La France, Inc. (the "Company")
and Xxxxxx Xxxx (the "Optionee"), effective as of November 1, 1996.
W I T N E S S E T H:
1. Grant of Option. Pursuant to the provisions of the Cafe La France 1996 Stock
Incentive Plan (the "Plan"), effective as of the date hereof, the Company hereby
grants to the Optionee, subject to the terms and conditions of the Plan and
subject further to the terms and conditions herein, the right and option to
purchase from the Company all or any part of an aggregate of 43,500 shares of
the common stock ($.01 par value) of the Company ("Common Shares"), at the
purchase price equal to $3.45 per share, being the fair market value of the
Common Shares as of the date hereof, such option to be exercised as hereinafter
provided. It is intended that the option evidenced hereby constitute an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Terms and Conditions. In addition to the terms and conditions contained in
the Plan, it is understood and agreed that the option evidenced hereby is
subject to the following additional terms and conditions:
Expiration Date. The option shall expire on the tenth anniversary of
the date hereof.
(b) Period of Exercise. Subject to the other terms of this Agreement
regarding the exercisability of this option, this option shall be immediately
exercisable with respect to 10,875 Common Shares, and the remainder of the
option shall become exercisable at the rate of 1208.33 Common Shares per month,
such that the entire option shall be fully vested as of January 31, 1999.
Notwithstanding the foregoing, no Common Shares acquired pursuant to an
exercise of any portion of this option shall be sold, transferred, exchanged or
otherwise disposed of prior to May 1 , 1996.
(c) Exercise of Option. This option shall be exercised by submitting a
written notice to the Committee appointed pursuant to Section 2 of the Plan (the
"Committee") signed by the Optionee and specifying the number of Common Shares
as to which the option is being exercised. Such notice shall be accompanied by
the payment of the full option price for such shares, or shall fix a date (not
more than ten business days from the date of such notice) for the payment of the
full option price of the shares being purchased. Payment shall be made in (i)
cash (including personal check), (ii) Common Shares (to the extent permitted by
law), which shall be valued for this purpose at the fair market value on the
date of transfer to the Company, as determined in accordance with the Plan,
(iii) with the consent of the Committee, the delivery of a
promissory note of the Optionee to the Company, payable upon such terms as are
specified by the Committee, or (iv) any combination of the above. A certificate
or certificates for the Common Shares purchased shall be issued by the Company
after the exercise of the option and payment therefor.
(d) Termination of Option upon Death, Disability, Retirement or
Termination of Employment. Unless the Committee in its discretion determines
otherwise, if the Optionee's employment with the Company and its subsidiaries
terminates, any portion of this option which is not exercisable on the date of
such termination of employment by reason of Section 2(b) hereof shall
immediately terminate, and any remaining portion of this option shall terminate
if not exercised before the expiration of the following periods, or at such
earlier time as may be applicable under Paragraph 2(a) above: (i) thirty (30)
days following such termination of employment, if such termination was not a
result of retirement on or after age 55, or of death or disability (disability
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended), or (ii) three (3) months following the Optionee's termination of
employment because of retirement on or after age 55, or (iii) one (l) year
following date of death or commencement of disability, if the Optionee is
employed by the Company and/or subsidiary at the time of death or the
commencement of disability. Notwithstanding the foregoing, if the Optionee is
terminated for cause, any remaining portion of this option shall immediately
terminate.
(e) Non-transferability. This option and all rights hereunder shall be
exercisable during the Optionee's lifetime only by the Optionee and shall be
non-assignable and non-transferable by the Optionee except, in the event of the
Optionee's death, by will or by the laws of descent and distribution. In the
event the death of the Optionee occurs, the representative or representatives of
the Optionee's estate, or the person or persons who acquire (by bequest or
inheritance) the rights to exercise this option in whole or in part, may
exercise this option prior to the expiration of the applicable exercise period,
as specified in Paragraph 2(d) above.
(f) Changes in the Company's Capital Structure. If the Company shall
effect a subdivision, consolidation or reclassification of shares or other
capital readjustment or recapitalization, the payment of a stock dividend, or
other increase or reduction of the number of shares of the voting shares
outstanding, without receiving compensation therefor in money, services or
property, then the number, class, and per share price of Common Shares subject
to this option shall be appropriately adjusted in such a manner as to entitle
the Optionee to receive upon exercise of this option, for the same aggregate
cash consideration, the same total number and class of shares as the Optionee
would have received as a result of the event requiring the adjustment.
If the Company is merged into or consolidated with another corporation,
regardless of whether or not the Company is the surviving corporation, or if the
Company is liquidated, or sells or otherwise disposes of substantially all of
its assets or substantially all of the stock of the Company while this option
remains outstanding, unless the Board determines otherwise, this option shall
expire as of the effective date of any such merger, consolidation, liquidation,
sale, or other disposition, provided that (x) notice of such merger,
consolidation, liquidation, sale or other
disposition shall be given to the Optionee at least 30 days prior to the
effective date of such merger, consolidation, liquidation, sale or other
disposition and (y) the Optionee shall have the right to exercise this option to
the extent that the same is then exercisable during the 30 day period preceding
the effective date of such merger, consolidation, liquidation, sale or other
disposition.
Except as expressly provided herein, the issue by the Company of shares
of stock of any class, for cash or property, or for labor or services, either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Common
Shares then subject to this option.
(g)Modification or cancellation of option. The Committee shall have the
authority to effect, at any time and from time to time, with the consent of the
Optionee, the modification of the terms of this option agreement (subject to the
limitations contained in the Plan), including the acceleration of the
exercisability of any option for any reason including a change in the control or
ownership of the Company, or the cancellation of any or all outstanding options
granted under the Plan.
(h) No Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Common Shares subject to this option prior to
the date of issuance to him of a certificate or certificates for such shares.
(i) No Right to Continued Employment. This option shall not confer upon
the Optionee any right with respect to continuance of employment by the Company
or any subsidiary, nor shall it interfere in any way with the right of the
employer to terminate the Optionee's employment at any time.
(j) Compliance with Law and Regulations. This option and the obligation
of the Company to sell and deliver shares hereunder shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any government or regulatory agency as may be required. The Company shall not
be required to issue or deliver any certificates for shares of Common Shares
prior to (i) the listing of such shares on any stock exchange on which the
Common Shares may then be listed, and (ii) the completion of any registration or
qualification of such shares under any federal or state law, or any rule or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable. Moreover, this option may
not be exercised if its exercise, or the receipt of Common Shares pursuant
thereto, would be contrary to applicable law.
3. Disposition of Shares. This option shall not qualify as an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code if the
Common Shares acquired pursuant to the exercise of the option are transferred,
other than by will or the laws of descent and distribution, within two years of
the date hereof, or within one year after transfer of Common Shares to the
Optionee pursuant to such exercise.
4. Optionee Bound by Plan. The Optionee hereby agrees to be bound by all the
terms and provisions of the Plan, a copy of which is available upon request to
the Committee.
5. Withholding Taxes. Optionee acknowledges and agrees that the Company and its
subsidiaries have the right to deduct from payments of any kind otherwise due to
Optionee any federal, state or local taxes of any kind required by law to be
withheld with respect to the exercise of this option hereunder.
6. Notices. Any notice hereunder to the Company shall be addressed to it at its
principal business office, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000;
Attention: Board of Directors, and any notice hereunder to the Optionee shall be
sent to the address reflected on the payroll records of the Company, subject to
the right of either party to designate at any time hereafter in writing some
other address.
7. Delaware Law to Govern. This Agreement shall be construed and administered in
accordance with and governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Optionee has executed this
Agreement as of the date above written
CAFE LA FRANCE, INC.
By: /s/ Xxxxxx X. XxXxxxx
---------------------------
Title: President
/s/ Xxxxxx Xxxx
---------------------------
Xxxxxx Xxxx
