EXHIBIT 10.40
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated
______________, 199_ (the "Option Agreement") by and between Xxxxx'x
Restaurants, Inc. (the "Corporation") and __________________________________
("Optionee") evidencing the stock option (the "Option") granted on such date
to Optionee under the terms of the Corporation's 1998 Stock Option/Stock
Issuance Plan, and such provisions shall be effective immediately. All
capitalized terms in this Addendum, to the extent not otherwise defined
herein, shall have the meanings assigned to them in the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed in accordance with Paragraph 6 of the Option
Agreement, none of the Option Shares shall vest on an accelerated basis upon
the occurrence of that Corporate Transaction, and Optionee shall accordingly
continue, over his or her period of Service following the Corporate
Transaction, to vest in the Option Shares in one or more installments in
accordance with the provisions of the Option Agreement. However, upon an
Involuntary Termination of Optionee's Service within eighteen (18) months
following such Corporate Transaction, all the Option Shares at the time
subject to the Option shall automatically vest in full on an accelerated
basis so that the Option shall immediately become exercisable for all the
Option Shares as fully-vested shares and may be exercised for any or all of
those Option Shares as vested shares. The Option shall remain so exercisable
until the EARLIER of (i) the Expiration Date or (ii) the expiration of the
one (1)-year period measured from the date of the Involuntary Termination.
2. For purposes of this Addendum, an INVOLUNTARY TERMINATION
shall mean the termination of Optionee's Service by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than for Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change
in Optionee's position with the Corporation (or Parent or Subsidiary
employing Optionee) which materially reduces Optionee's duties and
responsibilities or the level of management to which he or she
reports, (B) a reduction in Optionee's level of compensation
(including base salary, fringe benefits and target bonuses under any
corporate-performance based incentive programs) by more than fifteen
percent (15%) or (C) a relocation of Optionee's place of employment by
more than fifty (50) miles, provided and only if such change,
reduction or relocation is effected by the Corporation without
Optionee's consent.
3. The provisions of Paragraph 1 of this Addendum shall govern
the period for which the Option is to remain exercisable following the
Involuntary Termination of Optionee's Service within eighteen (18) months
after the Corporate Transaction and shall supersede any provisions to the
contrary in Paragraph 5 of the Option Agreement. The provisions of this
Addendum shall also supersede any provisions to the contrary in Paragraph 18
of the Option Agreement concerning the deferred exercisability of the Option.
IN WITNESS WHEREOF, Xxxxx'x Restaurants, Inc. has caused this
Addendum to be executed by its duly-authorized officer as of the Effective
Date specified below.
XXXXX'X RESTAURANTS, INC.
By:
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Title:
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EFFECTIVE DATE:______________________, 199_
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