Exhibit 10.11
Director's
Option
1999-Annual
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
EQUITY INCENTIVE AWARD PLAN FOR DIRECTORS OF
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
STOCK OPTION AGREEMENT
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DATE OF GRANT: JUNE 15, 1999
W I T N E S S E T H :
1. GRANT OF OPTION. Pursuant to the provisions of the Equity Incentive
Award Plan for Directors of X.X. Xxxxxxxx Tobacco Holdings, Inc. and
Subsidiaries (the "Plan"), X.X. Xxxxxxxx Tobacco Holdings, Inc. (the "Company")
on the above date has granted to
[FIRSTNAME] [LASTNAME] (THE "OPTIONEE"),
subject to the terms and conditions which follow and the terms and conditions of
the Plan, the right and option to exercise from the Company a total of
[STOCK_OPTION] SHARES
of Common Stock, par value $.01 per share, of the Company, at the exercise price
of $__________ per share (the "Option"). A copy of the Plan is attached and made
a part of this Agreement with same effect as if set forth in the Agreement
itself. All capitalized terms used herein shall have the meaning set forth in
the Plan, unless the context requires a different meaning.
2. EXERCISE OF OPTION.
(a) Shares may be purchased by giving the Corporate Secretary of
the Company written notice of exercise, on a form prescribed
by the Company, specifying the number of whole shares to be
purchased. The notice of exercise shall be accompanied by:
(i) tender to the Company of cash for the full purchase
price of the shares with respect to which such Option or
portion thereof is exercised;
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together with payment for taxes pursuant to Section 9 herein;
OR
(ii) the unsecured, demand borrowing by the Optionee from
the Company on an open account maintained solely for this
purpose in the amount of the full exercise price together with
the instruction from the Optionee to sell the shares exercised
on the open market through a duly registered broker-dealer
with which the Company makes an arrangement for the sale of
such shares under the Plan. 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. If the shares purchased upon the exercise of an
Option or a portion thereof cannot be sold for a price equal
to or greater than the full exercise price plus direct costs
of the sales, then there is no exercise of the Option.
Election of this method authorizes the Company to deliver
shares to the broker-dealer and authorizes the broker-dealer
to xxxx said shares on the open market. The broker-dealer will
remit proceeds of the sale to the Company which will remit net
proceeds to the Optionee after repayment of the borrowing,
deduction of costs, if any, and withholding of taxes. The
Optionee's borrowing from the Company on an open account shall
be a personal obligation of the Optionee which shall bear
interest at the published Applicable Federal Rate (AFR) for
short-term loans and shall be payable upon demand by the
Company. Such borrowing may be authorized by telephone or
other telecommunications acceptable to the Company. Upon such
borrowing and the exercise of the Option or portion thereof,
title to the shares shall pass to the Optionee whose election
hereunder shall constitute instruction to the Company to
register the shares in the name of the broker-dealer or its
nominee. The Company reserves the right to discontinue this
broker-dealer exercise method at any time for any reason
whatsoever. The Optionee agrees that if this broker-dealer
exercise method under this paragraph is used, the Optionee
promises unconditionally to pay the Company the full balance
in his open account at any time upon demand. Optionee also
agrees to pay interest on the account balance at the AFR for
short-term loans from and after demand.
(b) This Option shall be exercisable in three installments. The
first installment shall be exercisable on the first
anniversary following Date of Grant for 33% of the number of
shares of Common Stock subject to this option. Thereafter, on
each subsequent anniversary, an installment shall become
exercisable for 33% and 34%, respectively, of the number of
shares subject to this Option until the Option has become
fully exercisable. To the extent that any of the above
installments is not exercised when it becomes exercisable, it
shall not expire, but shall continue to be
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exercisable at any time thereafter until this Option shall
terminate, expire or be surrendered. An exercise shall be for
whole shares only.
(c) This Option shall not be exercisable prior to six months after
the Date of Xxxxx.
(d) If any shares of the Common Stock are to be disposed of in
accordance with Rule 144 under the Securities Act of 1933 or
otherwise, the Optionee shall promptly notify the Company of
such intended disposition and shall deliver to the Company at
or prior to the time of such disposition such documentation as
the Company may reasonably request in connection with such
sale and, in the case of a disposition pursuant to Rule 144,
shall deliver to the Company an executed copy of any notice on
Form 144 required to be filed with the SEC.
3. RIGHTS IN THE EVENT OF RESIGNATION OR NON-ELECTION TO THE BOARD.
Except as may be otherwise provided in this Section 3, after the Optionee's
resignation or non-election to the Board of Directors of the Company (the
"Board"), the Option shall NOT become exercisable as to any shares in addition
to those already exercisable pursuant to the schedule described in Section 2(b).
Notwithstanding the foregoing, if a non-election of the Optionee to the Board is
due to death or Permanent Disability (as defined in the Company's Long Term
Disability Plan), the Option shall immediately become exercisable as to all
shares.
4. EXPIRATION OF OPTION. The Option shall expire or terminate and may
not be exercised to any extent by the Optionee after the tenth anniversary of
the Date of Grant.
5. TRANSFERABILITY. Other than as specifically provided with regard to
the death of the Optionee, this Agreement and any benefit provided or accruing
hereunder shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge; and any attempt to do so
shall be void. No such benefit shall, prior to receipt thereof by the Optionee,
be in any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Optionee.
6. CONSIDERATION TO THE COMPANY. In consideration of the granting of
this Option by the Company, the Optionee agrees to render faithful and efficient
services to the Company, with such duties and responsibilities as shall from
time to time prescribe. Nothing in this Agreement or in the Plan shall confer
upon the Optionee any right to continue in the service of the Company or any
Subsidiary as a director or in any other capacity or shall interfere with or
restrict in any way the rights of the Company and its Subsidiaries and their
respective shareholders, which are hereby expressly reserved, in connection with
the removal of the Optionee from the Board of Directors of the Company or any
Subsidiary at any time for any reason whatsoever, with or without cause, subject
to applicable law and the relevant certificate of incorporation and bylaws.
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7. ADJUSTMENTS IN OPTION. In the event that the outstanding shares of
the Common Stock subject to the Option are, from time to time, changed into or
exchanged for a different number or kind of shares of the Company or other
securities by reason of a merger, consolidation, recapitalization,
reclassification, stock split, stock dividend, combination of shares, or
otherwise, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares or other consideration as to which the Option, or
portions thereof then unexercised, shall be exercisable. Any adjustment made by
the Committee shall be final and binding upon the Optionee, the Company and all
other interested persons.
8. APPLICATION OF LAWS. The granting and the exercise of this Option
and the obligations of the Company to sell and deliver shares hereunder shall be
subject to all applicable laws, rules, and regulations and to such approvals of
any governmental agencies as may be required.
9. TAXES. Any taxes required by federal, state, or local laws to be
withheld by the Company on exercise by the Optionee of the Option for Common
Stock, shall be paid to the Company before delivery of the Common Stock is made
to the Optionee. When the Option is exercised under the broker-dealer exercise
method, the full amount of any taxes required to be withheld by the Company on
exercise of stock options shall be deducted by the Company from the proceeds.
10. NOTICES. Any notices required to be given hereunder to the Company
shall be addressed to The Secretary, X.X. Xxxxxxxx Tobacco Holdings, Inc., 000
Xxxxx Xxxx Xxxxxx, Xxxxxxx-Xxxxx, XX, 00000, and any notice required to be given
hereunder to the Optionee shall be sent to the Optionee's address as shown on
the records of the Company.
11. ADMINISTRATION AND INTERPRETATION. In consideration of the grant,
the Optionee specifically agrees that the Committee shall have the exclusive
power to interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan and Agreement as are
consistent therewith and to interpret or revoke any such rules. All actions
taken and all interpretations and determinations made by the Committee shall be
final, conclusive, and binding upon the Optionee, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Agreement. The Committee may delegate its interpretive authority
to an officer or officers of the Company.
12. OTHER PROVISIONS.
(a) Titles are provided herein for convenience only and are not to
serve as a basis for interpretation of the Agreement.
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(b) This Agreement may be amended only by a writing executed by
the parties hereto which specifically states that it is
amending this Agreement.
(c) THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE
INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS
AGREEMENT REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER
PRINCIPLES OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, and
the Optionee have executed this Agreement as of the date of Grant first above
written.
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
By:
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Authorized Signatory
Optionee
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Date
Optionee's Taxpayer Identification Number:
Optionee's Home Address:
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