Exhibit 10.16
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XXXXXX'X TRADING COMPANY, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into as of
September 3, 2003, by and between Xxxxxx'x Trading Company, Inc., an Indiana
corporation ("Company"), and Xxxxx Xxxxxx ("Optionee") pursuant to the Xxxxxx'x
Trading Company, Inc. 1999 Stock Option Plan, as amended ("Plan"). It replaces
in its entirety the Stock Option Agreement between the parties dated May 28,
2003. All capitalized terms not otherwise defined herein shall have the meanings
set forth in the Plan.
R E C I T A L S
A. Optionee is employed by the Company pursuant to an Employment
Agreement dated August 29, 2003 ("Employment Agreement").
B. In accordance with the Agreement, the Committee has determined
to grant Optionee the right to purchase shares of common stock of the Company
pursuant to the terms and conditions of this Agreement and the Plan.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the covenants hereinafter set
forth, the parties agree as follows:
1. Options; Number of Shares.
(a) The Company hereby grants to Optionee the right to
purchase (each an "Option" and collectively, the "Options") up to
100,000 shares of common stock, no par value, of the Company ("Common
Stock" or "Shares") at a per share price ("Purchase Price") equal to
the closing price of a share of Common Stock on the date on which
Optionee first performs services for the Company.
(b) The Options and the right to purchase all or any
portion of the Shares are subject to the terms and conditions stated in
this Agreement and in the Plan. Upon exercise of an Option and payment
of the Purchase Price, Optionee shall become a shareholder of the
Company, with all rights and privileges of a shareholder of the Company
in respect of any Shares issuable upon such exercise. It is intended
that the Options will not qualify for treatment as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as
amended ("Code").
2. Exercise Criteria.
(a) Unless vesting of the Options is accelerated pursuant
to Subsection (b), one-third of the Options shall become vested on each
of the first three anniversaries of Optionee's employment commencement
date, provided Optionee is employed by Company on such anniversary
date.
(b) Upon a Change in Control (as defined in Section 7 of
the Employment Agreement), all outstanding Options shall become 100%
vested.
(c) If the Plan and the outstanding Options terminate
pursuant to Section 13(b) of the Plan (with no substitution,
assumption, settlement, or other continuation), and ten days' notice
referred to in Section 13(b) is required to be given to Optionee (or
would be required to be given to Optionee if his Options were vested on
such date), all of the Options shall become vested as of the date
preceding such notice, and Optionee shall have the exercise rights
specified in Section 13(d) with respect to all outstanding Options.
3. Termination of Options. The Options and Optionee's right to
exercise the Options shall terminate on the expiration of seven (7) years from
the date hereof, unless terminated earlier pursuant to Section 4 hereof or the
Plan (including, without limitation, Section 13(b) of the Plan).
4. Effect of Termination of Employment or Death.
(a) If the Company terminates Optionee's employment for
Cause (as defined in Section 4(a) of the Employment Agreement), or
Optionee resigns for other than Good Reason or Special Resignation
pursuant to Section 4(e) or 4(f) of the Employment Agreement,
Optionee's right to exercise any outstanding Options shall terminate
immediately upon his termination of employment.
(b) If Optionee's employment terminates during the term
of the Employment Agreement pursuant to Section 4(b), (c), (d), (e), or
(f), Optionee (or, Optionee's estate, in case of his death) may
exercise any or all of his outstanding vested Options at any time
before the earlier of (i) the first anniversary of his termination of
employment or (ii) the date on which his right to exercise such vested
Options would have terminated if he had not terminated employment.
(c) If Optionee's employment terminates for a reason
other than as provided in Subsection (a) or (b) above, Optionee (or his
estate, in case of his death) may exercise any or all of his
outstanding vested Options at any time before the earlier of (i) 90
days after his termination of employment date or (ii) the date on which
his right to exercise such vested Options would have terminated if he
had not terminated employment.
5. Termination of Employment or Other Relationship. The
termination of Optionee's employment shall not accelerate the vesting of the
Options. The Options may be exercised only with respect to that number of Shares
which could have been exercised under the Options had such Options been
exercised by Optionee on the date of such termination (for a termination other
than Cause) and only for the limited period of time set forth in Section 4.
6. Death of Optionee: No Assignment. The rights of Optionee under
this Agreement may not be assigned or transferred except by will, by the laws of
descent or distribution, and may be exercised during the lifetime of Optionee
only by such Optionee; provided, however, that in the event of disability
(within the meaning of Section 22(e)(3) of the Code) of Optionee, Optionee's
designee or legal representative may exercise the Options on behalf of Optionee
(provided the Options would have been exercisable by Optionee) until the right
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to exercise the Options otherwise expires. Any attempt to sell, pledge, assign,
hypothecate, transfer, or otherwise dispose of the Options in contravention of
this Agreement or the Plan shall be void. If Optionee should die while Optionee
is engaged in an employment relationship with the Company or within 90 days
after termination of such relationship, and provided Optionee's rights hereunder
shall have vested, in whole or in part, pursuant to Section 2 hereof, Optionee's
designee, legal representative, or legatee, the successor trustee of Optionee's
inter vivos trust or the person who acquired the right to exercise the Options
by reason of the death of Optionee (individually, a "Successor") shall succeed
to Optionee's rights under this Agreement. After the death of Optionee, only a
Successor may exercise the Options.
7. Exercise of Options. No Option granted under this Agreement
shall be exercisable until and except to the extent that it has vested. On or
after the vesting of the Options in accordance with Section 2 hereof and until
termination of the Options in accordance with this Agreement and the Plan, the
Options may be exercised by Optionee (or such other person specified in Section
6 hereof) to the extent exercisable as determined under Section 2 hereof, upon
delivery of the following to the Company at its principal executive offices:
(a) a written notice of exercise which identifies this
Agreement, the type of Option to be exercised, and states the number of
Shares to be purchased;
(b) a check, cash or any combination thereof in the
amount of the aggregate Purchase Price (or payment of the aggregate
Purchase Price in such other form of lawful consideration as the
Committee may approve from time to time under the provisions of Section
7 of the Plan);
(c) a check or cash in the amount reasonably requested by
the Company to satisfy the Company's withholding obligations under
federal, state or other applicable tax laws with respect to the taxable
income, if any, recognized by Optionee in connection with the exercise,
in whole or in part, of the Options (unless the Company and Optionee
shall have made other arrangements for deductions or withholding from
Optionee's wages, bonus or other income paid to Optionee by the
Company, provided, however, such arrangements must satisfy the
requirements of all applicable tax laws);
(d) any written representations and/or undertakings, in
such form and substance as the Company may deem necessary or desirable
to assure compliance with all applicable legal and accounting
requirements; and
(e) such further acts as may be necessary to register
Optionee as a shareholder of the Company.
Fractional share interests shall be disregarded, but may be cumulated. No fewer
than 100 Options may be exercised at any one time, unless the number is the
total number of Options exercisable at the time.
8. Continuance of Employment Required; No Employment Commitment.
The vesting schedule requires continued employment through each applicable
vesting date as a condition to the vesting of the applicable installment of the
Options and the rights and benefits under this Agreement. Partial employment,
even if substantial, during any vesting period will not entitle Optionee to any
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proportionate vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of employment as provided in Section 3 above or
under the Plan.
9. No Rights as a Stockholder. Neither Optionee nor any other
person entitled to exercise any Option shall have any of the rights or
privileges of a stockholder of the Company as to any shares of Common Stock
until the issuance and delivery to him or her of a certificate evidencing the
shares registered in his or her name. No adjustment will be made for dividends
or other rights as to a stockholder for which a record date is prior to such
date of delivery.
10. The Plan. The Options and all rights of Optionee thereunder
and/or hereunder are subject to, and Optionee agrees to be bound by, all of the
terms and conditions of the Plan, which are incorporated herein by this
reference. Unless otherwise expressly provided in these terms and conditions,
provisions of the Plan that confer discretionary authority on the Board or the
Committee do not (and shall not be deemed to) create any additional rights in
Optionee not expressly set forth in this Agreement or in a written amendment
hereto signed by the Company. If there is any conflict or inconsistency between
the terms and conditions of this Agreement and of the Plan, the terms and
conditions of the Plan shall govern; provided, however, notwithstanding any
provision of the Plan to the contrary, including the final sentence of Section
8.1 thereof, any determination of whether Optionee's employment has terminated
and the section of Optionee's Employment Agreement pursuant to which such
termination occurs shall be made pursuant to the terms of the Employment
Agreement without regard to the Plan or this Option Agreement. Optionee
acknowledges receipt of a complete copy of the Plan and agrees to be bound by
its terms. Optionee acknowledges reading and understanding the Plan.
(a) Further Assurances. Each party hereto agrees to
perform any further acts and execute and deliver any documents which
may be reasonably necessary to carry out the intent of this Agreement.
(b) Notices. Except as otherwise provided herein, all
notices, requests, demands and other communications under this
Agreement shall be in writing, and if by telegram or telecopy, shall be
deemed to have been validly served, given or delivered when sent, or if
by personal delivery or messenger or courier service, or by registered
or certified mail, shall be deemed to have been validly served, given
or delivered upon actual delivery, at the following addresses,
telephone and facsimile numbers (or such other address(es), telephone
and facsimile numbers a party may designate for itself by like notice):
If to Optionee:
To the Optionee's most recent address or telecopy number reflected on
the Company's records.
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If to the Company:
Xxxxxx'x Trading Company, Inc.
0000 X. Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopy: (000) 000-0000
(c) Amendments. This Agreement may be amended only by a
written agreement executed by both of the parties hereto. The Company
may, however, unilaterally waive any provision hereof in writing to the
extent such waiver does not adversely affect the interests of Optionee
hereunder, but no such waiver shall operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other
provision hereof.
(d) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Indiana
without regard to conflict of law principles thereunder.
(e) Entire Agreement. This Agreement constitutes the
entire agreement and understanding among the parties pertaining to the
subject matter hereof and supersedes any and all prior agreements,
whether written or oral, relating hereto.
(f) Headings. Introductory headings at the beginning of
each section and subsection of this Agreement are solely for the
convenience of the parties and shall not be deemed to be a limitation
upon or description of the contents of any such section and subsection
of this Agreement.
(g) Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and both of
which, when taken together, shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the date first above written.
THE COMPANY: OPTIONEE:
Xxxxxx'x Trading Company, Inc.
an Indiana corporation
By: ________________________________ ________________________________
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