EXHIBIT 10.2
OVERHILL FARMS, INC.
2005 STOCK PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 2005 Stock
Plan of Overhill Farms, Inc. ("PLAN") shall have the same defined meanings in
this Stock Option Agreement ("OPTION AGREEMENT").
I. NOTICE OF GRANT
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NAME: ___________________________
ADDRESS: ___________________________
___________________________
The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:
Grant Number ___________________________
Date of Grant ___________________________
Exercise Price per Share ___________________________
Total Number of Shares ___________________________
Total Exercise Price ___________________________
___________________________
Type of Option: ___ Incentive Stock Option
___ Nonqualified Stock Option
Term/Expiration Date: ___________________________
Vesting Schedule:
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Subject to the terms and conditions of the Plan, this Option shall vest
and become exercisable according to the following schedule:
The Shares subject to this Option shall vest and become exercisable
immediately upon the Date of Grant.
Termination Period:
-------------------
Any unexercised portion of this Option shall automatically and without
notice terminate and become null and void, after the earliest to occur of the
following:
(a) six (6) months following the death or Disability of the
Optionee;
(b) thirty (30) days following the date on which the Optionee
ceases to be an Eligible Person for any reason other than death,
Disability, or termination for Cause; or
(c) immediately upon the termination of an Optionee as an
Eligible Person for Cause.
In no event, however, shall the periods described above extend beyond
the Term/Expiration Date provided above or beyond the expiration of ten (10)
years from the Date of Grant.
II. AGREEMENT
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1. GRANT OF OPTION. The Committee hereby grants to the Optionee named
in the Notice of Grant (the "OPTIONEE"), an option (this "OPTION") to purchase
the number of Shares set forth in the Notice of Grant, at the exercise price per
Share set forth in the Notice of Grant (the "EXERCISE PRICE"), and subject to
the terms and conditions of the Plan, which is incorporated herein by reference,
and this Option Agreement. Subject to Section 18 of the Plan, in the event of a
conflict between the terms and conditions of the Plan and this Option Agreement,
the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds
the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonqualified Stock Option ("NSO").
2. EXERCISE OF OPTION.
(a) RIGHT TO EXERCISE. This Option shall vest and become
exercisable during its term in accordance with the Vesting Schedule set out in
the Notice of Grant and with the applicable provisions of the Plan and this
Option Agreement.
(b) METHOD OF EXERCISE. This Option shall be exercisable by
delivery of an exercise notice in the form attached as EXHIBIT A (the "EXERCISE
NOTICE"), which shall state the election to exercise this Option, the number of
Shares with respect to which this Option is being exercised ("EXERCISED
SHARES"), and such other representations and agreements as may be required by
the Company. The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised when (i) the Company has received a fully executed Exercise
Notice, (ii) full payment of the aggregate Exercise Price for the Exercised
Shares has been made, and (iii) arrangements that are satisfactory to the
Committee in its sole discretion have been made for the Optionee's payment to
the Company of the amount, if any, that the Committee determines to be necessary
for the Company or a Subsidiary to withhold in accordance with applicable
federal or state income tax withholding requirements.
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No Shares shall be issued pursuant to the exercise of an
Option unless the issuance and the exercise complies with all applicable laws,
as determined by the Committee in its sole discretion. Assuming such compliance,
for income tax purposes the Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to the
Shares.
3. METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash;
(b) certified or cashier's check payable to the order of the
Company;
(c) a promissory note made by the Optionee in favor of the
Company;
(d) other Shares which have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Shares as to
which this Option will be exercised; or
(e) any other consideration and method of payment for the
issuance of Shares to the extent permitted by applicable laws.
4. RESTRICTIONS ON EXERCISE. This Option may not be exercised until
such time as the Plan has been approved by the stockholders of the Company, or
if the issuance of the Shares upon exercise or the method of payment of
consideration for the Shares would constitute a violation of any applicable law.
5. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee or his
guardian or legal representative. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
6. TERM OF OPTION. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.
7. TAX OBLIGATIONS.
(a) WITHHOLDING TAXES. The Optionee agrees to make appropriate
arrangements with the Company (or the Subsidiary employing or retaining
Optionee) for the satisfaction of all federal, state, local and foreign income
and employment tax withholding requirements applicable to the Option exercise.
The Optionee acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver Shares if the withholding amounts are not
delivered at the time of exercise.
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(b) NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If this
Option is an ISO, and if the Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (i) the date two
(2) years after the Date of Grant, or (ii) the date one (1) year after the date
of exercise, the Optionee shall immediately notify the Company in writing of the
disposition. The Optionee agrees that the Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.
8. ENTIRE AGREEMENT. The Plan is incorporated herein by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Company and the Optionee with respect
to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and the
Optionee.
9. GOVERNING LAW. The corporate laws of the State of Nevada shall
govern all issues concerning the relative rights of the Company and its security
holders under this Stock Option Agreement. All other questions and obligations
under this Option Agreement shall be construed and enforced in accordance with
the internal laws of the State of California, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California. In any action,
dispute, litigation or other proceeding concerning this Option Agreement
(including arbitration), exclusive jurisdiction shall be with the courts of
California, with the County of Los Angeles being the sole venue for the bringing
of the action or proceeding.
10. NO GUARANTEE OF CONTINUED SERVICE. THE OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS AN ELIGIBLE PERSON AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). THE OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS AN ELIGIBLE PERSON FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH THE OPTIONEE'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE THE OPTIONEE'S RELATIONSHIP AS AN ELIGIBLE PERSON
AT ANY TIME, WITH OR WITHOUT CAUSE.
The Optionee acknowledges receipt of a copy of the Plan and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. The
Optionee has reviewed the Plan and this Option in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option and
fully understands all provisions of this Option. The Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan or this Option. The Optionee
further agrees to notify the Company upon any change in the residence address
indicated below.
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OPTIONEE OVERHILL FARMS, INC.
____________________________________ By:_____________________________
Signature
____________________________________ Title:__________________________
Print Name
____________________________________
____________________________________
Residence Address
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EXHIBIT A
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2005 STOCK PLAN
EXERCISE NOTICE
Overhill Farms, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
1. EXERCISE OF OPTION. The undersigned ("OPTIONEE") hereby elects to
exercise Optionee's option (the "OPTION") by purchasing _________ shares of the
common stock (the "SHARES") of Overhill Farms, Inc. (the "COMPANY") under and
pursuant to the 2005 Stock Plan (the "PLAN") and the Stock Option Agreement
dated ____________, 20___ (the "OPTION AGREEMENT"). Capitalized terms not
otherwise defined in this Exercise Notice shall have the meanings ascribed
thereto in the Option Agreement.
2. DELIVERY OF PAYMENT. Optionee herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Option Agreement, and any
and all withholding taxes due in connection with the exercise of the Option.
3. REPRESENTATIONS OF OPTIONEE. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. RIGHTS AS STOCKHOLDER. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Shares
subject to the Option, notwithstanding the exercise of the Option. The Shares
shall be issued to the Optionee as soon as practicable after the Option is
exercised in accordance with the Option Agreement. No adjustment shall be made
for a dividend or other right for which the record date is prior to the date of
issuance except as provided in Section 10 of the Plan.
5. TAX CONSULTATION. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
6. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.
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7. INTERPRETATION. Any dispute regarding the interpretation of this
Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Committee, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on all
parties.
8. GOVERNING LAW; SEVERABILITY. The corporate laws of the State of
Nevada shall govern all issues concerning the relative rights of the Company and
its security holders under this Exercise Notice. All other questions and
obligations under this Exercise Notice shall be construed and enforced in
accordance with the internal laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California. In any
action, dispute, litigation or other proceeding concerning this Exercise Notice
(including arbitration), exclusive jurisdiction shall be with the courts of
California, with the County of Los Angeles being the sole venue for the bringing
of the action or proceeding. If any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this
Exercise Notice will continue in full force and effect.
9. ENTIRE AGREEMENT. The Plan and the Option Agreement are incorporated
herein by reference. This Exercise Notice, the Plan and the Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest, or
modified by the Optionee, except by means of a writing signed by the Company and
Optionee.
Submitted by: Accepted by:
OPTIONEE OVERHILL FARMS, INC.
____________________________________ By:_____________________________
Signature
____________________________________ Title:__________________________
Print Name
Print Name
ADDRESS: ADDRESS:
------- -------
___________________________ 0000 Xxxx Xxxxxx Xxxxxx
___________________________ Vernon, California 90058
________________________________
Date Received
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