Exhibit 10.35
AMENDMENT NO. 3
TO
TANDEM RESTRICTED STOCK/STOCK OPTION AGREEMENTS
Pursuant to the resolutions adopted by the Compensation Committee
and the Board of Directors of X.X. Xxxxxxxx Tobacco Holdings, Inc. (the
"Company") on December 10, 2002, each of the Tandem Restricted Stock/Stock
Option Agreements between the Company and the Grantee thereunder, was amended as
follows (capitalized terms not otherwise defined herein have the meanings
assigned to them in the Tandem Restricted Stock/Stock Option Agreement):
1. Section 3(b) of each of the Tandem Restricted Stock/Stock Option
Agreements hereby is amended and replaced in its entirety to read as follows:
"(b) Exercise of Option. The Option shall be exercisable only
if and to the extent the Grantee or his or her representative, as
applicable, makes a Section 3 Election, or is deemed to have made a
Section 3 Election, for the right to exercise the Option in lieu of
receiving unrestricted shares of Common Stock upon the lapsing of
the restrictions set forth in Section 2 (b) of this Agreement.
Shares subject to the Option may be purchased by giving the
Secretary of the Company written notice of exercise, on a form
prescribed by the Company, specifying the number of shares to be
purchased and upon payment to the Company of the full exercise price
of the shares with respect to which such Option or portion thereof
is exercised. The exercise price is payable in cash or by certified
or cashier's check or other cash equivalent acceptable to the
Company payable to the order of the Company. The requirement of
payment in cash will be deemed satisfied if the Grantee has made
arrangements satisfactory to the Company with a duly registered
broker-dealer that is a member of the National Association of
Securities Dealers, Inc. to sell on the date of exercise a
sufficient number of shares of Common Stock being purchased
(excluding the Tax Shares (as defined below)) so that the net
proceeds of the sale transaction will at least equal the full
exercise price and pursuant to which the broker-dealer undertakes to
deliver the full exercise price to the Company not later than the
later of (i) the settlement date of the sale transaction and (ii)
the date on which the Company delivers to the broker-dealer the
shares of Common Stock being purchased pursuant to the exercise of
such Option. This method is known as the "broker-dealer exercise
method" and is subject to the terms and conditions set forth herein,
in the Plan and in guidelines established by the Committee. The
Option shall be deemed to be exercised simultaneously with the sale
of the shares by the broker-dealer. In connection with the exercise
of an Option, a number of shares (rounded down to the nearest whole
share)(the "Tax Shares") having a value equal to the amount of the
Grantee's minimum tax withholding amount payable in connection with
the Grantee's exercise of such Option shall be deducted from the
number of shares authorized to be sold by the broker-dealer. If the
shares (not including the Tax Shares) purchased upon the exercise of
an Option or a portion thereof can not be sold for a price equal to
or greater than the sum of (x) the full exercise price,
(y) direct costs of the sales, and (z) any shortfall on the minimum
tax withholding amount as a result of rounding down the number of
Tax Shares to the nearest whole share (the "Tax Rounding Amount"),
then there is no exercise of the Option. Election of the
broker-dealer exercise method authorizes the Company to deliver
shares to the broker-dealer (not including the Tax Shares) and
authorizes the broker-dealer to sell such shares in the open market.
The broker-dealer will remit to the Company an amount (the "Company
Amount") of the sale proceeds equal to the full exercise price and
any additional withholding of taxes (including any Tax Rounding
Amounts). The broker-dealer will remit the net proceeds to the
Grantee after deduction of costs, if any, and any Company Amount.
The Company reserves the right to discontinue this broker-dealer
exercise method at any time for any reason whatsoever."
2. Section 4(e) of each of the Tandem Restricted Stock/Stock Option
Agreements hereby is amended and replaced in its entirety to read as follows:
"(e) Taxes.
(i) Any taxes required by federal, state or local laws to be
withheld by the Company on the Date of Grant shall be paid to the
Company by the Grantee by the time such taxes are required to be
paid or deposited by the Company. Any taxes required by federal,
state or local laws to be withheld by the Company on the delivery of
unrestricted shares of Common Stock pursuant to the Restricted Stock
Grant shall be satisfied by the time such taxes are required to be
paid or deposited by the Company. The Grantee hereby authorizes the
Company to take the following actions prior to the delivery of
unrestricted shares of Common Stock: (x) deduct the applicable
number of Tax Shares to satisfy the minimum tax withholding amount
and (y) convert to cash a sufficient number of shares of Common
Stock to satisfy the Tax Rounding Amount and, if requested by the
Grantee, any additional tax withholding amounts.
(ii) Any taxes required by federal, state or local laws to be
withheld by the Company upon exercise by the Grantee of the tandem
Option shall be satisfied before delivery of shares of Common Stock
is made to Grantee. The Grantee hereby authorizes the Company to
take the following actions prior to the delivery of unrestricted
shares of Common Stock: (x) deduct the applicable number of Tax
Shares to satisfy the minimum tax withholding amount and (y) convert
to cash a sufficient number of shares of Common Stock to satisfy the
Tax Rounding Amount and, if requested by the Grantee, any additional
tax withholding amounts. When the tandem Option is exercised under
the broker-dealer exercise method, the Grantee hereby agrees that
the full amount of the taxes required to be withheld by the Company
on exercise of stock options shall be satisfied by the Company
retaining the applicable number of Tax Shares and the broker-dealer
remitting any
2
Tax Rounding Amounts and, if requested by the Grantee, any
additional tax withholding amounts to the Company."
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
By: /s/ XxXxxx X. Xxxxx, III
--------------------------------
Authorized Signatory
3
