Exhibit 10.41
CSK AUTO CORPORATION
OPTION EXCHANGE AGREEMENT
This Option Exchange Agreement (this "Agreement") is entered into as of
_________, 2001 by CSK Auto Corporation, a Delaware corporation (the "Company"),
and the person whose name appears on the signature page of this Agreement
("Executive").
A. Under the Company's stock option plans listed on Schedule A hereto (the
"Plans"), and pursuant to that certain Option Agreement or Agreements
(collectively, the "Employee Stock Option Agreements") between the Company and
Executive, the Company granted to Executive the options (as defined in the
Employee Stock Option Agreement(s) and set forth on the signature page to this
Agreement and collectively referred to herein as the "Old Options") to purchase
shares of the common stock, $0.01 par value per share ("Common Stock"), of the
Company.
B. Due to the recent decline in the fair market value of the Common Stock,
the Company believes that the purpose of the Plans is being frustrated and that
it is in the best interests of the Company to effectively adjust the Exercise
Price (as defined in the Employee Stock Option Agreement(s)) of the Old Options
in order to more closely realign the value of the options with the market price
of the Common Stock and thereby, better enable the Company to attract, retain
and motivate its employees.
C. In order to effect such adjustment, the Company and Executive now
desire to cancel Executive's Old Options and terminate the Employee Stock Option
Agreement(s) in exchange for the Company agreeing to grant to Executive the same
number of new options (as set forth on the signature page to this Agreement, the
"New Options") under the Plans and on the terms and conditions specified herein
and (except as described in Section 2 hereof) set forth in the form(s) of the
Stock Option Agreement(s) pursuant to each of the Plans (the "New Stock Option
Agreement(s)") attached to this Agreement as Exhibit A, with the result that, on
a date that is six months and one day after the date of this Agreement (the
"Grant Date"), following the cancellation of the Old Options and the Employee
Stock Option Agreement(s) pursuant to this Agreement, Executive will be granted
the New Options, which New Options shall have an Exercise Price equal to the
greater of (a) the fair market value of the Common Stock on the Grant Date as
determined under the terms of the Plans and (b) $11.00 per share of Common
Stock.
NOW, THEREFORE, in consideration of the covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. CANCELLATION AND GRANT OF OPTIONS.
(a) Subject to the other conditions contained in this Agreement, (i)
Executive does hereby agree to the cancellation of the Old Options and the
termination of the Employee Stock Option Agreement(s), and such Old Options and
the Employee Stock Option Agreement(s) shall be deemed to be of no further force
or effect, without the requirement of any further action by the Company or
Executive and (ii) in consideration of the cancellation of the Old Options and
termination of the Employee Stock Option Agreement(s), the Company agrees to
grant to Executive the New Options on the Grant Date, subject to the terms and
conditions specified herein and (except as discussed in Section 2 hereof) set
forth in the New Stock Option Agreement.
(b) Executive acknowledges that, by reason of the foregoing cancellation
of the Old Options and termination of the Employee Stock Option Agreement(s),
Executive releases all rights and interests Executive may have held, whether
pursuant to the Plans, the Employee Stock Option Agreement(s) or otherwise, to
acquire the shares of the Common Stock with respect to the Old Options.
Executive hereby represents to the Company that (i) he or she is the sole owner
of the Old Options and that he or she has not sold, transferred, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any
manner any of the Old Options or any right to or interest in the Old Options to
any person, and (ii) he or she, or his or her representative, has had an
opportunity to ask questions and receive answers and to undertake whatever
additional inquiry regarding the subject matter of this Agreement as such
Executive has deemed necessary or appropriate under the circumstances in order
to reach an informed decision regarding the merits of the transactions
contemplated by this Agreement. Executive agrees and acknowledges that the
Company is relying on Executive's representations in entering into and effecting
the transaction contemplated by this Agreement.
2. TERMS OF THE NEW OPTIONS. The terms and conditions of the New Options
shall be governed by the Plans and the New Stock Option Agreement(s); provided,
however, that, notwithstanding anything to the contrary in the Plans, the New
Stock Option Agreement(s) or this Agreement, the New Options shall not be
exercisable until the applicable date(s) set forth in the New Stock Option
Agreement(s) for such New Options; and provided, further, that the New Options
shall have an Exercise Price equal to the greater of (a) the fair market value
of the Common Stock on the Grant Date as determined under the terms of the Plans
and (b) $11.00 per share of Common Stock.
3. EFFECT OF EXECUTION AND DELIVERY OF THIS AGREEMENT. Upon execution and
delivery of this Agreement by Executive: (i) the cancellation of the Old Options
and termination of the Employee Stock Option Agreement(s) will become effective;
and (ii) the Company agrees to grant the New Options to Executive on the Grant
Date, subject to the terms and conditions specified herein and set forth in the
New Stock Option Agreement(s).
4. AGREEMENT NOT REVOCABLE; SUCCESSORS, SPECIFIC PERFORMANCE AND OTHER
EQUITABLE REMEDIES.
(a) Neither the Company nor Executive may revoke or rescind this
Agreement, which shall survive the death, incapacity or termination of
employment of Executive. This Agreement will be binding on the Company,
Executive and their respective successors and assigns, however such succession
or assignment is effected (including, without limitation, by the laws of
descent, distribution and conservatorship, sale, assignment, conveyance, gift,
pledge, hypothecation or otherwise). This Agreement may not be transferred,
assigned, pledged or hypothecated by Executive.
(b) The parties to this Agreement will, in addition to damages or other
remedies at law for breach, default or misrepresentation, as appropriate, be
entitled to equitable remedies, including specific performance, for breach or
prospective breach of this Agreement.
5. NO EMPLOYMENT RIGHT. No provision of this Agreement or of the New
Options shall (i) confer upon Executive any right to continue in the employ of
or contract with the Company or any of its affiliates or subsidiaries; (ii)
affect the existing rights of the Company and each of its affiliates or
subsidiaries to terminate the employment or contract of Executive, with or
without cause; or (iii) confer upon Executive any right to participate in any
employee welfare or benefit plan or other program of the Company or any of its
affiliates or subsidiaries other than the Plans. EXECUTIVE HEREBY ACKNOWLEDGES
AND AGREES THAT THE COMPANY AND EACH OF ITS AFFILIATES OR SUBSIDIARIES MAY
TERMINATE THE EMPLOYMENT OR CONTRACT OF EXECUTIVE AT ANY TIME AND FOR ANY LAWFUL
REASON, OR FOR NO REASON, UNLESS EXECUTIVE AND THE COMPANY OR SUCH AFFILIATE OR
SUBSIDIARY ARE PARTIES TO A WRITTEN EMPLOYMENT AGREEMENT THAT EXPRESSLY PROVIDES
OTHERWISE. Notwithstanding the foregoing, nothing in this Section 5 shall
constitute a waiver of any claims Executive may have against the Company for
wrongful or unlawful termination.
6. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement, including any claim arising out of or in connection with
any termination of the Executive's employment, shall be settled exclusively by
arbitration in Phoenix, Arizona, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
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7. SEVERABILITY. If any provision or portion of this Agreement is illegal
or unenforceable, the other portions of this Agreement will not be affected by
the illegality or unenforceability.
8. GOVERNING LAW. This Agreement is governed by and is to be construed and
enforced in accordance with the internal laws, and not the laws pertaining to
choice or conflict of laws, of the State of Delaware.
9. MISCELLANEOUS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. This Agreement may only be amended or modified by an agreement in
writing signed by the Company and Executive.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and entered into as of the date first written above.
EXECUTIVE
___________________________________________
((Executive))
CSK AUTO CORPORATION
By: _____________________________________
Name: _____________________________________
Its: _____________________________________
The following sets forth the Old Options, which are canceled hereunder, and the
New Options that Executive will be granted under the applicable Plans and the
New Stock Option Agreement(s) on the Grant Date.
Non-Qualified Options
Number of Common
Stock Option Plan ("SOP") Shares subject to Options Exercise Price Grant Date
------------------------- ------------------------- -------------- ----------
Old Options ((SOP_Stock_Option_Plan)) ((M__Options_NQ)) ((M__Strike_Price)) ((Grant_Date))
(to be canceled
as of the date
hereof)
New Options ((SOP_Stock_Option_Plan)) ((M__Options_NQ)) * **
(to be issued on
the Grant Date)
* The per share exercise price of the new options to be granted on a date that
is six months and one day following the cancellation of the old options shall be
the greater of the (a) the fair market value of the Common Stock on the Grant
Date as determined under the terms of the Plans, and (b) $11.00.
** The date which is six months and one day after the date of this Agreement.
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SCHEDULE A
PLANS
((SOP_STOCK_OPTION_PLAN))
EXHIBIT A
FORM OF NEW STOCK OPTION AGREEMENT(S)
