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EXHIBIT 10.25
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made effective as of
February 1, 1998 (the "Effective Date"), between CSK Auto Corporation, a
Delaware corporation ("Issuer"), and Xxxxxxx Xxxxxxx ("Optionee").
R E C I T A L S
A. In connection with the negotiation and successful completion of the
acquisition of 82 store locations from Trak Auto Corporation and certain of its
affiliates, Issuer desires to grant Optionee the opportunity to acquire a
greater proprietary interest in Issuer to encourage Optionee's further
contribution to the success and progress of Issuer and CSK Auto, Inc., an
Arizona corporation ("Employer").
B. The Board of Directors of Issuer has as of the Effective Date
granted to Optionee a non-qualified stock option to purchase shares of Class B
Stock, $.01 par value, of Issuer (the "Class B Stock") subject to the terms and
conditions of this Agreement.
AGREEMENTS
1. Definitions. Capitalized terms used herein shall have the
following meanings:
"Act" is defined in Section 10.
"Affiliate" means, with respect to any Person, any other
Person which, directly or indirectly, is in control of, is controlled by, or is
under common control with such Person. For purposes of this definition,
"control" of a Person shall mean the power, directly or indirectly, (i) to vote
fifty percent (50%) or more of the securities having ordinary voting power for
the election of directors of such Person whether by ownership of securities,
contract, proxy or otherwise; or (ii) to direct or cause the direction of
management and policies of such person whether by ownership of securities,
contract, proxy or otherwise.
"Agreement" means this Stock Option Agreement.
"Approved Sale" means a transaction or a series of related
transactions with an acquiror which had not previously been a shareholder of
Employer or Issuer (other than, if the Approved Sale occurs after an Initial
Public Offering, as a result of purchasing shares in the public market) which
results in a bona fide, unaffiliated change of beneficial ownership of (a) 80%
of Employer's or Issuer's common equity securities or (b) all or substantially
all of either of their assets, whether pursuant to the sale of the stock or
assets of Employer or Issuer, or a merger or consolidation involving Employer or
Issuer.
"Cause" shall have the meaning given to it in the Employment
Agreement.
"Class B Stock" is defined in recital X.
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"Effective Date" is defined in the preamble.
"Employer" is defined in recital A.
"Employment Agreement" means the employment agreement between
Optionee and Employer dated as of January 27, 1997.
"Endorsed Certificate" means a stock certificate evidencing
the shares properly endorsed for transfer.
"Exercise Price" is defined in Section 2.
"Fair Market Value" means the value of an Option Share, as of
the Termination Date, determined pursuant to Section 9(c).
"Fiscal Year" means the fiscal year of Issuer.
"Good Reason" shall have the meaning given to it in the
Employment Agreement.
"Initial Public Offering" means the effectiveness of a
registration statement under the Securities Act of 1933, as amended, covering
any of the capital securities of the Issuer, and the completion of a sale of
such securities thereunder, (i) following which the Issuer is, or becomes, a
reporting company under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, and (ii) as a result of which such securities are traded on
the New York Stock Exchange or the American Stock Exchange, or quoted on the
Nasdaq National Market or is traded or quoted on any other national stock
exchange.
"Initial Stockholders" means the 16 stockholders of Issuer
that purchased shares of Issuer on October 30, 1996 and who are entities
organized under the laws of the Cayman Islands with whom an affiliate of
Investcorp Bank E.C., a Bahrain corporation, has an administrative relationship,
and persons who acquire shares of Issuer from such stockholders and who are
entities so organized and administered.
"Issuer" is defined in the preamble.
"Lock-Up Period" means, in the case of an Initial Public
Offering, the 180-day period commencing on the effective date of the
registration statement covering capital stock of Issuer or Employer sold in such
Initial Public Offering, and, in the case of any subsequent registered offering,
the 90-day period commencing on the effective date of the registration statement
relating to such offering, or, in either case, such lesser period as may be
agreed upon by Issuer or Employer with the underwriters of such offering.
"Minimum Qualifying Approved Sale" is defined in Section 3(c).
"Option" is defined in Section 2.
"Optionee" is defined in the preamble.
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"Option Shares" is defined in Section 2.
"Partial Qualifying Approved Sale" is defined in Section 3(c).
"Permanent Disability" is defined in the Employment Agreement.
"Permitted Transferee" is defined in Section 5.
"Person" means any natural person, partnership, corporation,
trust or incorporated organization.
"Public Sale" means an Approved Sale which occurs after the
consummation of an Initial Public Offering of the Issuer's common equity
securities.
"Purchase Date" is defined in Section 9(a).
"Qualifying Approved Sale" is defined in Section 3(c).
"Realization Date" is defined in Section 3(c).
"Repurchase Period" is defined in Section 9(a).
"Repurchase Price" is defined in Section 9(a).
"Restated Certificate of Incorporation" means the restated
certificate of incorporation of Issuer filed with the Secretary of State of the
State of Delaware on October 30, 1996, and as the same from time-to-time may
hereafter be amended.
"Stockholders' Agreement" means the agreement dated as of
October 30, 1996 among Issuer and all of its stockholders as of such date.
"Subsidiary" means any joint venture, corporation, partnership
or other entity as to which Issuer or Employer, whether directly or indirectly,
has more than 50% of the (i) voting rights or (ii) rights to capital or profits.
"Termination Date" means the date on which Optionee ceases to
be employed by Employer or any Affiliate of Employer for any reason; provided,
however, that Optionee shall not be considered to have ceased to be employed by
Employer or any Affiliate of Employer if he or she continues to be employed by
Issuer or any Subsidiary.
2. Grant of Option. Issuer grants to Optionee the right and option (the
"Option") to purchase, on the terms and conditions hereinafter set forth, all or
any part of an aggregate of 2,335 shares of Class B Stock (the "Option Shares"),
at the purchase price of $205.88 per Share (as such amount may be adjusted as
herein provided, the "Exercise Price"), on the terms and conditions set forth
herein.
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3. Exercisability.
(a) Except as provided in Section 3(b) or Section 3(c),
Optionee's right to exercise the Option shall vest as set forth in Exhibit 1
hereto.
(b) Notwithstanding anything to the contrary set forth in
paragraph (a) or paragraph (c) of this Section 3, the right to exercise the
Option shall immediately vest in full upon the seventh (7th) anniversary of the
Effective Date, provided that the Termination Date has not occurred prior to
such date.
(c) A "Qualifying Approved Sale" shall occur if (i) an
Approved Sale is a Public Sale, or (ii) the Board of Directors of Issuer
determines in connection with an Approved Sale that is not a Public Sale or in
connection with an Initial Public Offering in which all of the equity securities
of Issuer held by the Initial Stockholders are sold that the annual compounded
rate of return expected to be realized by the Initial Stockholders, based upon
an initial base cost of the shares of $205.88 per share, from October 30, 1996
through the date on which it is estimated that the Initial Stockholders will
receive the net proceeds from such Approved Sale or Initial Public Offering (a
"Realization Date"), equals or exceeds 30% per annum, assuming the exercise of
all then outstanding options that are exercisable (whether upon the occurrence
of such Qualifying Approved Sale or for any other reason). A "Partial Qualifying
Approved Sale" shall occur if the Board of Directors of Issuer determines in
connection with an Approved Sale that is not a Public Sale or in connection with
an Initial Public Offering in which all of the equity securities of Issuer held
by the Initial Stockholders are sold that the annual compounded rate of return
expected to be realized by the Initial Stockholders, based upon an initial base
cost of the shares of $205.88 per share, from October 30, 1996 through the
Realization Date, equals or exceeds 25% per annum, but is less than 30% per
annum, assuming the exercise of all then outstanding options that are
exercisable (whether upon the occurrence of such Qualifying Approved Sale or for
any other reason). A "Minimum Qualifying Approved Sale" shall occur if the Board
of Directors of Issuer determines in connection with an Approved Sale that is
not a Public Sale or in connection with an Initial Public Offering in which all
of the equity securities of Issuer held by the Initial Stockholders are sold
that the annual compounded rate of return expected to be realized by the Initial
Stockholders, based upon an initial base cost of the shares of $205.88 per
share, from October 30, 1996 through the Realization Date, equals or exceeds 20%
per annum, but is less than 25% per annum, assuming the exercise of all then
outstanding options that are exercisable (whether upon the occurrence of such
Qualifying Approved Sale or for any other reason). In the event of a Qualifying
Approved Sale, the Option shall vest fully on the Realization Date. In the event
of a Partial Qualifying Approved Sale, 75% of the unvested portion of the option
shall vest on the Realization Date. In the event of a Minimum Qualifying
Approved Sale, 50% of the unvested portion of the option shall vest on the
Realization Date. The amount used in determining the rate of return on the
Realization Date shall be the per share net proceeds from such Qualifying
Approved Sale, Partial Qualifying Approved Sale or Minimum Qualifying Approved
Sale (in each case including the proceeds attributable to any outstanding
Options) reduced by the estimated fees and expenses of such Sale, including
without limitation investment banking, legal and accounting fees.
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4. Expiration.
(a) The vested portion of the Option shall expire upon the
thirtieth (30th) day following the seventh (7th) anniversary of the Effective
Date unless (i) at any time prior to a Qualifying Approved Sale, Optionee is
terminated without Cause, Optionee ceases to be employed by Employer or a
Subsidiary due to death or Permanent Disability or Optionee resigns for Good
Reason, in which case the vested portion of the Option shall expire 180 days
following the Termination Date, (ii) Optionee resigns other than for Good Reason
or is terminated for Cause from employment by Employer, in which case the vested
portion of the Option shall expire at 5:00 p.m. Phoenix time on the second
business day after the date of such termination; provided, however, that
notwithstanding anything to the contrary contained in this Section 4(a), if the
Issuer exercises the purchase right pursuant to Section 9 hereof, the vested
portion of the Option shall expire on the business day immediately preceding the
Purchase Date.
(b) The unvested portion of the Option shall expire on the
Termination Date except in the case where Optionee is terminated from employment
by Employer without Cause, Optionee ceases to be so employed due to death or
Permanent Disability or Optionee resigns for Good Reason, in which case the
unvested portion of the Option shall terminate 180 days following the end of the
Fiscal Year during which the Termination Date occurred, subject to the vesting
of any portion of the Option as of 90 days following the end of such Fiscal Year
pursuant to Section 3(a); provided, however, that notwithstanding anything to
the contrary contained in this Section 4(b), if Issuer exercises the purchase
right pursuant to Section 9 hereof, the unvested portion of the Option shall
expire on the business day immediately preceding the Purchase Date.
5. Nontransferability. Subject to Section 9 hereof, the Option shall
not be transferable by Optionee otherwise than to his or her spouse, child,
estate, personal representative, heir or successor or to a trust for the benefit
of Optionee or his or her spouse, child or heir (a "Permitted Transferee"), and
the Option shall be exercisable, during Optionee's lifetime, only by him or her
or by any of the foregoing Permitted Transferees, or in the event of Optionee's
Permanent Disability, his or her guardian or legal representative. More
particularly (but without limiting the generality of the foregoing), the Option
may not be assigned, transferred (except as aforesaid), pledged or hypothecated
in any way (whether by operation of law or otherwise), and shall not be subject
to execution, attachment or similar process. Any assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, and the levy of any attachment or similar process upon the Option that
would otherwise effect a change in the ownership of the Option, shall terminate
the Option; provided, however, that in the case of the involuntary levy of any
attachment or similar involuntary process upon the Option, Optionee shall have
thirty (30) days after notice thereof to cure such levy or process and reinstate
the Option. This Agreement shall be binding on and enforceable against any
person who is a Permitted Transferee of the Option pursuant to the first
sentence of this Section.
6. Effect of Merger; Adjustments.
(a) In the event of an Approved Sale that is a merger or other
form of corporate reorganization and notwithstanding any other provisions of
this Agreement, the unexercised portion of the Option shall be subject to the
terms of the agreement or plan of merger or reorganization effecting such merger
or reorganization and shall be converted, redeemed, exchanged, canceled or
otherwise treated as provided in such agreement or plan of merger
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or reorganization, provided that Optionee shall be given at least 20 days' prior
notice of the proposed merger or reorganization and shall (notwithstanding
anything else herein to the contrary) be entitled to exercise the vested portion
of the Option at any time during such 20 day period up to and until the close of
business on the day immediately preceding the date of consummation of such
merger or reorganization (which exercise may be expressly contingent upon
completion of the Approved Sale if the unexercised portion of the Option were to
vest as a result of such sale being a Qualifying Approved Sale) and upon
exercise of the Option the Option Shares shall be treated in the same manner as
the shares of any other stockholder of Issuer.
(b) Subject to Section 6(a), in the event of any one or more
reorganizations, recapitalizations, mergers, acquisitions, stock splits, reverse
stock splits, stock dividends or similar events, an appropriate adjustment shall
be made in the number and kind of shares or other securities subject to the
Option, and the Exercise Price for each Option Share or other unit of any
securities subject to this Agreement. No fractional interests shall be issued on
account of any such adjustment unless the Board of Directors of the Issuer
specifically determines to the contrary; provided, however, that in lieu of
fractional interests, Optionee, upon the exercise of the Option in whole or
part, shall receive cash in an amount equal to the amount by which the Fair
Market Value of such fractional interests exceeds the Exercise Price
attributable to such fractional interests.
7. Exercise of the Option. Prior to the expiration thereof, Optionee
may exercise the vested portion of the Option from time to time in whole or in
part. Upon electing to exercise the Option, Optionee shall deliver to the
Secretary of Issuer a written and signed notice of such election setting forth
the number of Option Shares Optionee has elected to purchase and shall at the
time of delivery of such notice tender cash or a cashier's or certified bank
check to the order of Issuer for the full Exercise Price of such Option Shares
and any amount required pursuant to Section 16 hereof. The Issuer may, in its
discretion, also permit payment of the Exercise Price in such form or in such
manner as may be permissible under any applicable law.
8. Restrictions on Transfers of Option Shares. Subject to Section 9
hereof, prior to the termination of the Lock-Up Period following an Initial
Public Offering, the Option Shares shall not be transferable or transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) except that Optionee may transfer the Option Shares to a Permitted
Transferee. This Agreement shall be binding on and enforceable against any
person who is a Permitted Transferee of the Option Shares. The stock
certificates issued to evidence Option Shares upon exercise of the Option
hereunder shall bear legends referring to this Agreement and the restrictions
contained herein.
9. Purchase of Option Shares.
(a) In the event that the Termination Date occurs for any
reason prior to an Initial Public Offering or an Approved Sale, the Option
Shares shall be subject to repurchase as follows:
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(i) Issuer, during the sixty (60) days following the later of
the Termination Date or the date upon which Optionee gives notice in
accordance with Section 7 hereof of his election to exercise all or a
part of the portion of the Option vested at the Termination Date (the
"Repurchase Period"), shall have the right to purchase all, but not
less than all, of the Option Shares owned by Optionee on the
Termination Date or to be acquired by Optionee pursuant to such notice
of exercise.
(ii) In the event that Optionee becomes entitled to acquire
Option Shares after the Termination Date, Issuer may notify Optionee in
accordance with Section 9(b) hereof that Issuer will purchase any
Option Shares that Optionee may thereafter acquire upon the exercise of
the Option and shall set the Purchase Date (as hereinafter defined) and
shall purchase such Option Shares, if any, pursuant to the terms of
this Agreement.
(iii) The purchase price (the "Repurchase Price") for each
Option Share shall be Fair Market Value, provided, however, that in the
case of Option Shares purchased by Optionee during the 90-day period
immediately preceding the Purchase Date, if no material adverse change
in the business or financial condition of the Employer occurs during
such 90-day period, the purchase price shall be the greater of Fair
Market Value or the per share exercise price paid by Optionee upon his
acquisition of the Option Share.
(iv) If Issuer elects to purchase the Option Shares, it shall
notify Optionee at or before the end of the Repurchase Period and the
Repurchase Price shall be paid in cash at a time set by Issuer which
time shall be within thirty (30) days after the end of the Repurchase
Period (the "Purchase Date"), provided that Optionee has presented to
Issuer an Endorsed Certificate.
(v) The Option Shares shall be transferred to Issuer free and
clear of all liens, encumbrances, mortgages, pledges, security
interests, restrictions, prior assignments and claims of any kind or
nature whatsoever except those created by the Restated Certificate of
Incorporation or this Agreement. If Issuer does not purchase the Option
Shares, the restrictions on transfer thereof contained in Sections 5
and 8 of this Agreement shall terminate and be of no further force and
effect. Notwithstanding Optionee's failure to deliver the Endorsed
Certificate, the Option Shares represented thereby shall be deemed to
be owned by Issuer upon (A) the payment by Issuer of the purchase price
to Optionee or his or her Permitted Transferee or (B) notice to
Optionee or such Permitted Transferee that Issuer is holding the
purchase price in the United States for the account of Optionee or such
Permitted Transferee, and upon such payment or notice (x) Optionee and
such Permitted Transferee will have no further rights in or to such
Option Shares, (y) Issuer shall be entitled to specific performance of
Optionee's or such Permitted Transferee's obligation to deliver such
Endorsed Certificates, and (z) Optionee and his or her Permitted
Transferee shall be jointly and severally liable for all reasonable
attorneys' fees and other costs and expenses incurred by Issuer in
enforcing its right to repurchase the Option Shares hereunder and shall
pay to Issuer promptly upon demand the amount of all such fees and
expenses.
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(b) In the event an unvested portion of the Option becomes
exercisable pursuant to Section 4(b), for purposes of Section 9(a), the
Repurchase Period shall commence as of the date notice of the Option's
exercisability is provided to Optionee.
(c) The Fair Market Value shall be determined in good faith by
Issuer's Board of Directors. If the Board determination is challenged by
Optionee, a mutually acceptable investment banker or appraiser shall establish
the Fair Market Value. If Optionee and Issuer cannot agree upon an investment
banker or appraiser each shall choose an investment banker or appraiser and the
two investment bankers or appraisers shall choose a third investment banker or
appraiser who alone shall establish the Fair Market Value. The Fair Market Value
shall be based on an assumed sale of 100% of the outstanding capital stock of
Issuer (without reduction for minority discount or lack of liquidity of the
Option Shares) and shall be determined using customary criteria generally
employed within the investment banking community at the time such determination
is made for valuing an entity similar to Issuer. The investment banker's or
appraiser's determination shall be conclusive and binding on Shareholder, Issuer
and Optionee. Issuer shall bear all costs incurred in connection with the
services of such investment banker or appraiser unless the Fair Market Value
established by the investment banker or appraiser is (i) less than or equal to
110% of the Board of Directors' determination, in which case Optionee shall
promptly pay or reimburse Issuer for such costs or (ii) greater than 110% but
less than 130% of the Board of Directors' determination, in which case Optionee
shall promptly pay or reimburse Issuer for 50% of such costs.
(d) For so long as Optionee or his or her Permitted Transferee
owns the Option Shares, Issuer agrees that it shall, upon the written request of
Optionee, provide Optionee with annual financial statements of Issuer promptly
upon the completion of the preparation of such statements. The annual financial
statements shall be accompanied by an audit report by Issuer's independent
accountants.
10. Compliance with Legal Requirements.
(a) No Option Shares shall be issued or transferred pursuant
to this Agreement unless and until all legal requirements applicable to such
issuance or transfer have, in the opinion of counsel to Issuer, been satisfied.
Such requirements may include, but are not limited to, registering or qualifying
such Shares under any state or federal law, satisfying any applicable law
relating to the transfer of unregistered securities or demonstrating the
availability of an exemption from applicable laws, placing a legend on the
Option Shares to the effect that they were issued in reliance upon an exemption
from registration under the Securities Act of 1933, as amended (the "Act"), and
may not be transferred other than in reliance upon Rule 144 or Rule 701
promulgated under the Act, if available, or upon another exemption from the Act,
or obtaining the consent or approval of any governmental regulatory body. Issuer
shall use its best efforts to comply with all legal requirements applicable to
the issuance or transfer of Option Shares.
(b) Optionee understands that Issuer intends for the offering
and sale of Option Shares to be effected in reliance upon Rule 701 or another
available exemption from registration under the Act and intends to file a Form
701 as appropriate, and that Issuer is under no obligation to register for
resale the Option Shares issued upon exercise of the Option. In connection with
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any such issuance or transfer, the person acquiring the Option Shares shall, if
requested by Issuer, provide information and assurances satisfactory to counsel
to Issuer with respect to such matters as Issuer reasonably may deem desirable
to assure compliance with all applicable legal requirements. Issuer hereby
covenants and agrees to register all of the Option Shares on a Form S-8 (or any
successor form thereto) following the Initial Public Offering.
11. Capitalizations, Exchanges, Etc. Affecting Shares; Dilution.
(a) The provisions of this Agreement shall apply to any and
all shares of capital stock of Issuer or any successor or assign of Issuer that
may be issued in respect of, in exchange for, or in substitution of, the Option
Shares by reason of any stock dividend, stock split, stock issuance, reverse
stock split, combination, recapitalization, reclassification, merger,
consolidation or otherwise, other than an Approved Sale and in connection with
the occurrence of any such events, proportionate adjustments shall be made in
the number of Option Shares which may be acquired hereunder and the exercise
price of each Option Share.
(b) Except as may be specifically provided herein or in the
Restated Certificate of Incorporation, nothing herein shall prohibit or restrict
Issuer from taking any corporate action or engaging in any corporate transaction
of any kind, including, without limitation, the issuance and sale of additional
shares of capital stock of Issuer, any merger, consolidation, liquidation or
sale of assets, or create in Optionee or his or her Permitted Transferee any
rights to acquire or receive additional shares of capital stock of Issuer or
otherwise to be protected against dilution.
12. Subject to Restated Certificate of Incorporation and Stockholders'
Agreement. Optionee acknowledges that the Option Shares are subject to the terms
of the Restated Certificate of Incorporation and the Stockholders' Agreement.
Optionee hereby agrees to comply with the terms of the Stockholders' Agreement.
13. No Interest in Shares Subject to Option. Neither Optionee
(individually or as a member of a group) nor any beneficiary or other person
claiming under or through Optionee shall have any right, title, interest, or
privilege in or to any shares subject to this Agreement except as to such Option
Shares, if any, as shall have been issued to such person upon exercise of this
Option or any part of it.
14. Not an Employment Contract. Nothing in this Agreement or any other
instrument executed pursuant thereto shall confer upon Optionee any right to
continue in the employ of Employer or any Subsidiary or shall affect the right
of Employer or any Subsidiary to terminate the employment of Optionee with or
without Cause.
15. Governing Law. All terms of and rights under this Agreement shall
be governed by and construed in accordance with the internal law of the State of
New York, without giving effect to principles of conflicts of law.
16. Taxes. The Issuer may, in its discretion, make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
all federal, state, local and other taxes required by law to be withheld with
respect to the issuance or exercise of the Option
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including, but not limited to, deducting the amount of any such withholding
taxes from any other amount then or thereafter payable to Optionee, requiring
Optionee to pay to Issuer the amount required to be withheld or to execute such
documents as the Issuer deems necessary or desirable to enable it to satisfy its
withholding obligations. Optionee shall have the right to satisfy the
withholding obligation in whole or in part by the delivery of shares of the
Issuer previously issued to Optionee or by the withholding of the delivery of
Option Shares otherwise to be received upon the Option exercise.
17. Notices. All notices, requests, demands and other communications
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given if personally delivered, telexed or telecopied to, or, if mailed,
when received by, the other party, if to Issuer at its principal executive
offices addressed to the attention of Issuer's Secretary, and if to Optionee at
his or her address as it appears on the books of his or her employer (or at such
other address as shall be given in writing by Optionee or his or her Permitted
Transferee to Issuer).
18. Amendments and Waivers. This Agreement may be amended, and any
provision hereof may be waived, only by a writing signed by the party to be
charged.
19. Entire Agreement. This Agreement sets forth the entire agreement
and understanding between the parties as to the subject matter hereof and
supersedes all prior oral and written and all contemporaneous oral discussions,
agreements and understandings of any kind or nature.
20. Headings. The headings preceding the text of the sections hereof
are inserted solely for convenience of reference, and shall not constitute a
part of this Agreement, nor shall they affect its meaning, construction or
effect.
21. Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement.
22. Arbitration. The parties shall endeavor to settle all disputes by
amicable negotiations. Except as otherwise provided in Section 9(c) hereof, any
claim, dispute, disagreement or controversy that arises among the parties
relating to this Agreement that is not amicably settled shall be resolved by
arbitration, as follows:
(a) Any such arbitration shall be heard in The City of New
York, New York, before a panel consisting of one (1) to three (3) arbitrators,
each of whom shall be impartial. Upon the written Request for Arbitration by
either party hereto to commence arbitration hereunder, the parties shall attempt
to mutually agree as to the number and identity of the arbitrators within thirty
(30) days of such Request. Except as the parties may otherwise agree, all
arbitrators (if not selected by the parties hereto within thirty (30) days of a
written Request for Arbitration) shall be appointed pursuant to the commercial
arbitration rules of the American Arbitration Association. In determining the
number and appropriate background of the arbitrators, the appointing authority
shall give due consideration to the issues to be resolved, but his or her
decision as to the number of arbitrators and their identity shall be final.
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(b) An arbitration may be commenced by any party to this
Agreement by the service of a written request for arbitration upon the other
affected parties. Such request for arbitration shall summarize the controversy
or claim to be arbitrated.
(c) All attorneys' fees and costs of the arbitration shall in
the first instance be borne by the respective party incurring such costs and
fees, but the arbitrators shall award costs and attorneys' fees to the
prevailing party. The parties hereby expressly waive punitive damages, and under
no circumstances shall an award contain any amount that in any way reflects
punitive damages.
(d) Judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
(e) It is intended that controversies or claims submitted to
arbitration under this Section 22 shall remain confidential, and to that end it
is agreed by the parties that neither the facts disclosed in the arbitration,
the issues arbitrated, nor the views or opinions of any persons concerning them,
shall be disclosed to third persons at any time, except to the extent necessary
to enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration.
(f) Any arbitration under this Section 22 shall be conducted
pursuant to the commercial arbitration rules of the American Arbitration
Association.
23. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective permitted successors and
assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
February __, 1998.
CSK AUTO CORPORATION
By:
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Name:
---------------------------------
Title:
--------------------------------
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Xxxxxxx Xxxxxxx
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EXHIBIT 1
The Option shall vest as follows:
April 1, 1999 584 Option Shares
April 1, 2000 584 Option Shares
April 1, 2001 584 Option Shares
April 1, 2002 583 Option Shares
XXXXXXX STOCK OPTION AGREEMENT 1
EXHIBIT 1
