EXHIBIT 10.10(1)
TEJON RANCH CO.
STOCK OPTION AGREEMENT
Pursuant to the
1998 STOCK INCENTIVE PLAN
This Incentive Stock Option Agreement ("Agreement") is
made and entered into as of the Date of Grant indicated below by
and between Tejon Ranch Co., a Delaware corporation (the
"Company"), and the person named below as Optionee.
WHEREAS, Optionee is an employee, consultant or advisor
of the Company and/or one or more of its subsidiaries;
WHEREAS, pursuant to the Company's 1998 Stock Incentive
Plan (the "Plan"), the Compensation Committee of the Board of
Directors of the Company administering the Plan (the "Committee")
approved the grant to Optionee of an option to purchase shares of
the Common Stock, par value $.50 per share, of the Company (the
"Common Stock"), on the terms and conditions set forth in a Stock
Option Agreement entered into by Optionee and the Company as of
the Date of Grant;
NOW, THEREFORE, in consideration of the foregoing
recitals and the covenants set forth herein, the parties hereto
agree as follows:
1. Grant of Option; Certain Terms and Conditions.
The Company hereby grants to Optionee, and Optionee hereby
accepts, as of the Date of Grant indicated below, an option (the
"Option") to purchase the number of shares of Common Stock
indicated below (the "Option Shares") at the Exercise Price per
share indicated below. The Option shall become exercisable as to
20% of the Number of Shares Purchasable set forth below on
_____________ of each of the five years commencing ___________,
2001, except as otherwise provided in Section 3. The Option
shall expire at 5:00 p.m., Los Angeles, California time, on the
Expiration Date indicated below and shall be subject to all of
the terms and conditions set forth in this Agreement.
Optionee:
Date of Grant:
Number of Shares Purchasable:
Exercise Price per share:
Expiration Date:
2. Incentive Stock Option; Internal Revenue Code
Requirements. The Option is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code (the
"Code") except to the extent that the aggregate Fair Market Value
(determined as of the Date of Grant) of the shares of Common
Stock with respect to which the Option is exercisable for the
first time by Optionee during any calendar year (under the Plan
and all other stock option plans of the Company and its
subsidiaries) exceeds $100,000. Such excess shares are intended
to be treated as shares issued pursuant to an Option that is not
an incentive stock option described in Section 422 of the Code,
in accordance with Section 422(d) of the Code. The number of
such excess shares as to which the option is not intended to be
treated as an incentive option is ______.
The "Fair Market Value" of a share of Common Stock or
other security on any day shall be equal to the last sale price,
regular way, per share or unit of such other security on such day
or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the American Stock Exchange or, if the shares of Common Stock
or such other security are not listed or admitted to trading on
the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the shares of Common Stock or such other security are
listed or admitted to trading or, if the shares of Common Stock
or such other securities are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices
in the over-the-counter market as reported by Nasdaq Stock Market
or such other system then in use or, if on any such date the
shares of Common Stock or such other security are not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in shares of Common Stock or such other security selected
by the Board of Directors.
3. Acceleration and Termination of Option.
(a) Termination of Employment.
(i) Definition of Termination. In the
event that Optionee shall cease to be an employee of the Company
or any of its subsidiaries voluntarily or involuntarily or for
any reason whatever, such event is referred to in this Agreement
as a "Termination" of Optionee's "Employment."
(ii) Normal Termination. If Optionee's
Employment is Terminated for any reason other than those
specifically enumerated in Section 3(a)(iii), (b) or (d), then
the Option shall terminate three (3) months from the date of such
Termination of Employment but in no event later than the
Expiration Date. During such period, the Option shall be
exercisable only to the extent it was exercisable on the date of
Termination of Employment.
(iii) Death or Permanent Disability. In
the event of a Termination of Optionee's Employment by reason of
the death or Permanent Disability (as hereinafter defined) of
Optionee, the Option shall terminate on the first anniversary of
the date of such Termination of Employment or the Expiration
Date, whichever is earlier.
"Permanent Disability" shall mean the inability to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than twelve
(12) months. The Optionee shall not be deemed to have a
Permanent Disability unless proof of the existence thereof shall
have been furnished to the Committee in such form and manner, and
at such times, as the Committee may require. Any determination
by the Committee that Optionee does or does not have a Permanent
Disability shall be final and binding upon the Company and
Optionee.
(b) Death or Permanent Disability Following
Termination of Employment. Notwithstanding anything to the
contrary in this Agreement, if Optionee shall die or suffer a
Permanent Disability at any time after the Termination of his or
her Employment and prior to the Expiration Date, then to the
extent that the Option was exercisable on the date of such death
or Permanent Disability the Option shall terminate on the earlier
of the Expiration Date or the first anniversary of the date of
such death.
(c) Acceleration of Option Upon a Change of
Control. The Option shall become fully exercisable with respect
to all Option Shares in the event of a Change of Control.
"Change of Control" shall mean the first to occur of the
following events:
(i) a merger or consolidation of the Company
if and only if as a result of the transaction persons other than
the shareholders immediately prior to such transaction shall own
80% or more of the voting securities of the Company or its
successor after the transaction;
(ii) the sale or transfer by the Company of
all or substantially all of its property and assets in a single
transaction or series of related transactions; or
(iii) the dissolution or liquidation of the Company.
Nothing in this Agreement shall limit or otherwise affect any
other contractual right now existing or hereafter entered into
relating to the acceleration of the dates upon which the Option
may be exercised.
(d) Other Events Causing Termination.
Notwithstanding anything else to the contrary in this Agreement,
the Option shall terminate in the event of the occurrence of an
event referred to in clause (iii) of paragraph (c) above or a
merger or consolidation referred to in clause (i) or sale or
transfer of assets referred to in clause (ii) of said paragraph
(c) above (a "Terminating Event") unless the terms of such
transaction constituting the Terminating Event otherwise provide.
Such termination shall occur on the 30th day following any such
Terminating Event (or such later date as the Board of Directors
or the Committee shall determine) unless the Board of Directors
or the Committee (i) sets an earlier date which is at least ten
days prior to the occurrence of the Terminating Event,
(ii) notifies the Optionee in writing at least ten days before
the occurrence of the Terminating Event of the setting of such
date and (iii) accelerates the exercisability of the Option to
the extent it would otherwise be exercisable for any part of the
thirty day period after such event pursuant to Section 1 above so
that, to such extent, the Option could be exercised for a period
of at least ten days prior to the occurrence of the Terminating
Event. In such event where the requirements of clauses (i), (ii)
and (iii) of the preceding sentence are met, the Option shall
expire immediately upon the occurrence of the Terminating Event.
(e) Discretionary Acceleration. The Committee,
in its sole discretion, may accelerate the exercisability of the
Option for any reason, including without limitation in the event
of death or disability of Optionee.
4. Adjustments. In the event that the outstanding
securities of the class then subject to the Option are increased,
decreased or exchanged for or converted into cash, property
and/or a different number or kind of securities, or cash,
property and/or securities are distributed in respect of such
outstanding securities, in either case as a result of a
reorganization, merger, consolidation, recapitalization,
reclassification, dividend (other than a cash dividend paid out
of earned surplus) or other distribution, stock dividend stock
split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are
sold, then, the Committee shall make appropriate and
proportionate adjustments in the number and type of shares or
other securities or cash or other property that may thereafter be
acquired upon the exercise of the Option; provided, however, that
any such adjustments in the Option shall be made without changing
the aggregate Exercise Price of the then unexercised portion of
the Option.
5. Exercise. The Option shall be exercisable during
Optionee's lifetime only by Optionee or by his or her guardian or
legal representative, and after Optionee's death only by the
person or entity entitled to do so under Optionee's last will and
testament or applicable intestate law. The Option may only be
exercised by the delivery to the Company of a written notice of
such exercise pursuant to the notice procedures set forth in
Section 7 hereof, which notice shall specify the number of Option
Shares to be purchased (the "Purchased Shares") and the aggregate
Exercise Price for such shares (the "Exercise Notice"), together
with payment in full of such aggregate Exercise Price in one or
more of the following ways at the option of the Grantee:
(a) by the delivery to the Company of a
certificate or certificates representing shares of Common Stock,
duly endorsed or accompanied by a duly executed stock power,
which delivery effectively transfers to the Company good and
valid title to such shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value thereof on
the date of such exercise), provided that the Company is not then
prohibited from purchasing or acquiring such shares of Common
Stock; and/or
(b) by reducing the number of shares of Common
Stock to be issued and delivered to Optionee upon such exercise
(such reduction to be valued on the basis of the aggregate Fair
Market Value (determined on the date of such exercise) of the
additional shares of Common Stock that would otherwise have been
issued and delivered upon such exercise), provided that the
Company is not then prohibited from purchasing or acquiring such
shares of Common Stock; and/or
(c) delivery of a cashier's or certified bank
check or, if the Company so elects, a personal check, in each
case payable to the Company.
6. Payment of Withholding Taxes.
(a) If the Company is obligated to withhold an
amount on account of any federal, state or local tax imposed as a
result of the exercise of the Option, including, without
limitation, any federal, state or other income tax, or any
F.I.C.A., state disability insurance tax or other employment tax,
then Optionee shall, concurrently with such exercise, pay such
amount (the "Withholding Liability") to the Company in cash or by
a cashier's or certified bank check or, if the Company so elects,
a personal check, in each case payable to the Company; provided,
however, that, in the discretion of the Board or the Committee,
the Optionee may, pursuant to an irrevocable election of Optionee
(a "Withholding Election") made on or prior to the date of such
exercise, instead pay all or any part of the Withholding
Liability in the following manner:
(i) by the delivery to the Company of a
certificate or certificates representing shares of Common Stock,
duly endorsed or accompanied by a duly executed stock powers,
which delivery effectively transfers to the Company good and
valid title to such shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value thereof on
the date of such exercise), provided that the Company is not then
prohibited from purchasing or acquiring such shares of Common
Stock; and/or
(ii) by reducing the number of shares of
Common Stock to be issued and delivered to Optionee upon such
exercise (such reduction to be valued on the basis of the
aggregate Fair Market Value (determined on the date of such
exercise) of the additional shares of Common Stock that would
otherwise have been issued and delivered upon such exercise),
provided that the Company is not then prohibited from purchasing
or acquiring such shares of Common Stock.
(b) The Board or the Committee shall have sole
discretion to approve or disapprove any Withholding Election and
may adopt such rules and regulations as are consistent with and
necessary to implement the foregoing. The Board or the Committee
may permit Optionee to make a Withholding Election to pay
withholding taxes in excess of the minimum amount required by
law, provided that the amount of withholding taxes so paid does
not exceed the estimated total federal, state and local tax
liability of Optionee attributable to such exercise.
7. Notices. Any notice given to the Company shall be
addressed to the Company at X.X. Xxx 0000, Xxxxx, Xxxxxxxxxx
00000, Attention: General Counsel, or at such other address as
the Company may hereinafter designate in writing to Optionee.
Any notice given to Optionee shall be sent to the address set
forth below Optionee's signature hereto, or at such other address
as Optionee may hereafter designate in writing to the Company.
Any such notice shall be deemed duly given when delivered
personally or five days after mailing by prepaid certified or
registered mail return receipt requested.
8. Stock Exchange Requirements; Applicable Laws.
Notwithstanding anything to the contrary in this Agreement, no
shares of stock issuable upon exercise of the Option, and no
certificate representing all or any part of such shares, shall be
purchased, issued or delivered if (a) such shares have not been
admitted to listing upon official notice of issuance on each
stock exchange upon which shares of that class are then listed or
(b) in the opinion of counsel to the Company, such issuance or
delivery would cause the Company to be in violation of or to
incur liability under any federal, state or other securities law,
or any requirement of any stock exchange listing agreement to
which the Company is a party, or any other requirement of law or
of any administrative or regulatory body having jurisdiction over
the Company.
9. Restrictions on Transferability.
(a) Neither the Option nor any interest therein
may be sold, assigned, conveyed, gifted, pledged, hypothecated or
otherwise transferred in any manner other than by will or the
laws of descent and distribution.
(b) By accepting the Option, the Optionee for
himself or herself and his or her transferees by will or the laws
of descent and distribution, represent and agree that all shares
of Common Stock purchased upon exercise of the Option will be
acquired for investment and not with a view to the distribution
thereof unless they have been registered under the Securities Act
of 1933, and will otherwise be acquired, held and disposed of and
held in accordance with the restrictions of said Act and the
rules and regulations of the Securities and Exchange Commission
thereunder, that the Company may instruct its transfer agent to
restrict further transfer of said shares in its records except
upon receipt of satisfactory evidence that such restrictions have
been satisfied, that upon each exercise of any portion of the
Option, the certificates evidencing the purchased shares shall
bear an appropriate legend on the face thereof evidencing such
restrictions, and that the person entitled to exercise the same
shall furnish evidence satisfactory to the Company (including a
written and signed representation) to the effect that the shares
are being acquired subject to such restrictions.
10. The Plan. The Option is granted pursuant to the
Plan, as in effect on the Date of Grant, and is subject to all
the terms and conditions of the Plan, as the same may be amended
from time to time; provided, however, that no such amendment
shall deprive Optionee, without his or her consent, of the Option
or of any of Optionee's rights under this Agreement. The
interpretation and construction by the Board or the Committee of
the Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Committee for the purpose
of administering the Plan shall be final and binding upon
Optionee. Until the Option shall expire, terminate or be
exercised in full, the Company shall, upon written request
therefor, send a copy of the Plan, in its then-current form, to
Optionee or any other person or entity then entitled to exercise
the Option.
11. Stockholder Rights. No person or entity shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of any Option Shares until the Option shall have been
duly exercised to purchase such Option Shares in accordance with
the provisions of this Agreement and the Option Shares have been
issued.
12. Employment Rights. No provision of this Agreement
or of the Option granted hereunder shall (a) confer upon Optionee
any right to continue in the employ of the Company or any of its
subsidiaries, (b) affect the right of the Company and each of its
subsidiaries to terminate the employment of Optionee, with or
without cause, or (c) confer upon Optionee any right to
participate in any employee welfare or benefit plan or other
program of the Company or any of its subsidiaries other than the
1992 Plan. The Optionee hereby acknowledges and agrees that the
Company and each of its subsidiaries may terminate the employment
of Optionee at any time and for any reason, or for no reason,
unless Optionee and the Company or such subsidiary are parties to
a written employment agreement that expressly provides otherwise.
13. Governing Law. This Agreement and the Option
granted hereunder shall be governed by and construed and enforced
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the Company and Optionee have duly executed
this Agreement as of the Date of Grant.
TEJON RANCH CO. OPTIONEE
By:
Name: Signature
Title:
Street Address
City, State and Zip Code
Social Security Number
