NEW YORK BAGEL ENTERPRISES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Date of Grant:
-------------------------
This Non-Qualified Stock Option Agreement (this "Agreement"), dated as of
the date of grant first stated above (the "Date of Grant"), is delivered
BY NEW YORK BAGEL ENTERPRISES, INC.,
a Kansas corporation,
hereinafter referred to as
"COMPANY"
TO
---------------------------------------,
an individual,
hereinafter referred to as
"GRANTEE"
WHEREAS, Company wishes to compensate Grantee for Grantee's contributions
and activities on behalf of Company; and
WHEREAS, the Board of Directors of Company adopted a resolution effective
___________, to issue non-qualified stock options to Grantee.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, Company and Grantee hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter
set forth, Company hereby grants to Grantee, as of the Date of Grant, an
option to purchase up to _______ shares of common stock of the Company (the
"Stock") at a purchase price per share of $_____________________. Such
option is hereinafter referred to as the "Option" and the shares of stock
purchasable upon exercise of the Option are hereinafter sometimes referred to
as the "Option Shares."
2. VESTING OF EXERCISE RIGHTS. Subject to the other terms of this
Agreement, the Option shall become exercisable in five (5) installments, Grantee
having the right hereunder to purchase from Company the following number of
Option Shares upon exercise of the Option, on and after the following dates, in
cumulative fashion:
(a) On and after the expiration of six months from the Date of Grant, up
to one-fifth (ignoring fractional shares) of the total number of
Option Shares;
(b) On and after the first anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total number
of Option Shares;
(c) On and after the second anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total number
of Option Shares;
(d) On and after the third anniversary of the Date of Grant, up to an
additional one-fifth (ignoring fractional shares) of the total number
of Option Shares; and
(e) On and after the fourth anniversary of the Date of Grant, the
remaining Option Shares.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with respect thereto, to the
extent such rights shall not have been exercised, shall terminate and
become null and void after the expiration of __________ (____) years
from the Date of Grant (the "Option Term").
[(b) Upon the occurrence of Grantee's ceasing for any reason to be employed
by the Company, the Option, to the extent not previously exercised,
shall terminate and become null and void immediately upon such
termination of Grantee's employment, except in a case where the
termination of Grantee's employment is by reason of death. Upon a
termination of Grantee's employment by reason death, the Option may be
exercised during the following period, but only to the extent that the
Option was outstanding and exercisable on any such date of death: the
six-month period following the date of issuance of letters
testamentary or letters of administration to the executor or
administrator of Grantee's estate, but not later than one year after
Grantee's death. In no event, however, shall any such period extend
beyond the Option Term.]
(c) In the event of the death of Grantee, the Option may be exercised by
Grantee's legal representative, but only to the extent that the Option
would otherwise have been exercisable by Grantee.
(d) Notwithstanding anything to the contrary set forth herein, in the
event Grantee shall (i) commit any act of malfeasance or wrongdoing
affecting Company or any subsidiary of Company, (ii) breach any
agreement with Company or any subsidiary of Company, or (iii) commit
or fail to commit any act which would be adverse to the best interest
of Company, any unexercised portion of the Option shall immediately
terminate and be void in the Company's Board of Directors' sole
determination.
4. EXERCISE OF OPTIONS.
(a) Grantee may exercise the Option with respect to all or any part of the
number of Option Shares then exercisable hereunder by giving the
Secretary of Company at the Company's principal executive office
written notice delivered in person or by mail of
2
Grantee's intent to exercise. The notice of the exercise shall
specify the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five (5) days after the giving of the notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by Grantee of the option price for the
Option Shares purchased shall be made on or before the exercise date
specified in the notice of exercise in cash, or, with the prior
written consent of the Company, in whole or in part through the
surrender of previously acquired shares of Stock at their Fair Market
Value (as defined in Paragraph [12]) on the exercise date. On the
exercise date specified in Grantee's notice or as soon thereafter as
is practicable, a certificate or certificates for the Option Shares
then being purchased shall be issued to Grantee upon full payment of
the exercise price for such Option Shares. The obligation of Company
to deliver Stock shall, however, be subject to the condition that if
at any time the Company shall determine in its sole discretion that
the listing, registration or qualification of the Option or the Option
Shares upon any securities exchange or the NASDAQ's NMS (as defined
herein) or under any state or federal law, or the consent or approval
of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the Option or the issuance or
purchase of Stock thereunder, the Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any
conditions not acceptable to Company.
(c) If Grantee fails to pay for any of the Option Shares specified in the
notice or fails to accept delivery thereof, Grantee's right to
purchase the Option Shares may be terminated by Company.
5. ADJUSTMENT OF OPTION SHARES AND OPTION PRICE. In the event of any
stock dividend or subdivision of the shares of common stock of Company into a
greater number of shares, the purchase price hereunder shall be proportionately
reduced and the number of shares subject to the Option shall be proportionately
increased; conversely, in the event of any combination of the outstanding shares
of common stock of Company, the purchase price hereunder shall be
proportionately increased and the number of shares of Stock subject to the
Option shall be proportionately reduced.
6. INVESTMENT REPRESENTATION. Upon demand by Company, Grantee shall
deliver to Company, at the time of any exercise of the Option or portion
thereof, a written representation that the Stock to be acquired upon such
exercise is to be acquired for investment and not for resale or with a view to
the distribution thereof. Upon such demand by Company, delivery of such
representation and all additional applicable representations as determined by
Company prior to the delivery of any certificate representing the Stock issuable
upon exercise of the Option and prior to the expiration of the Option Term shall
be a condition precedent to the right of Grantee to purchase any shares of
Stock.
7. RIGHTS AS A STOCKHOLDER. Neither Grantee nor any personal
representative shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares
3
of Stock purchasable or issuable upon the exercise of the Option, in whole or
in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION. During Grantee's lifetime, the Option
hereunder shall be exercisable only by Grantee or any guardian or legal
representative of Grantee, and the Option shall not be transferrable otherwise
by will or the laws of descent and distribution (but shall be exercisable by
Grantee's executor or administrator pursuant to Paragraph 3(b) hereof) or
pursuant to a qualified domestic relations order, nor shall the Option be
subject to attachment, execution or other similar process. In the event of (a)
any attempt by Grantee to alienate, assign, pledge, hypothecate or otherwise
dispose of the Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or interests hereby
conferred, then Company may terminate the Option by notice to Grantee and the
Option shall thereupon become null and void.
[9. NO RIGHT TO CONTINUED EMPLOYMENT. The granting of the Option nor its
exercise shall not be construed as granting to Grantee any right with respect to
the continuance of employment by Company. Except as may otherwise be limited by
a separate written agreement between Company and Grantee, the right of Company
to terminate at will Grantee's employment with Company at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically reserved by
Company, as the employer or on behalf of the employer (whichever the case may
be), and acknowledged by Grantee.]
10. DISPOSITION OF SHARES. No share of Stock acquired by the exercise of
an Option granted hereunder shall be transferable, other than by will or by the
laws of descent and distribution, within two (2) years of the Date of Grant or
within one (1) year after the transfer of Option Shares pursuant to exercise of
the Option. Each certificate representing shares of Stock acquired by the
exercise of the Option shall bear a legend to that effect. Grantee hereby
further acknowledges that the transfer of the shares of Stock acquired by the
exercise of the Option may be limited by Rule 144 of the General Rules and
Regulations promulgated under the Securities Act of 1933, as amended.
11. AMENDMENT OF OPTION. The Option may be amended by the Board of
Directors of Company or by a committee appointed by the Board of Directors (the
"Committee") at any time (a) if the Board of Directors or the Committee
determines, in either's sole discretion, that amendment is necessary or
advisable in the light of any addition to or change in any federal or state
securities law or other law or regulation, which change occurs after the Date of
Grant and by its terms applies to the Option, or (b) other than in the
circumstances described in clause (a), with the consent of Grantee.
12. FAIR MARKET VALUE. For purposes of this Agreement, the term "Fair
Market Value" of a share of Stock shall mean the fair market value of the Stock
as determined in good faith by Company; provided, however, that (a) if the
shares of Stock are admitted to trading on a national securities exchange, Fair
Market Value on any date shall be the last sale price reported for the shares of
Stock on such exchange on such date or, if no sale was reported on such date, on
the last date preceding such date on which a sale was reported, as quoted in THE
WALL STREET JOURNAL, (b) if the shares of Stock are admitted to quotation on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
and have been designated as a National Market System ("NMS") security, Fair
Market Value on any date shall be the last sale price reported for the shares of
Stock on such system on such date or on the last day preceding such date on
which a sale was
4
reported, as quoted in THE WALL STREET JOURNAL, or (c) if the shares of Stock
are admitted to quotation on NASDAQ and have not been designated a NMS
security or are listed on another comparable quotation system, Fair Market
Value on any date shall be the average of the highest bid and lowest asked
prices of the shares of Stock on such system on such date.
13. SCOPE OF AGREEMENT. This Agreement shall inure to the benefit of, and
be binding upon and enforceable against, the heirs, legal representatives,
successors and assigns of the parties.
14. AMENDMENTS. Except as otherwise provided herein, this Agreement may
not be modified or amended except by an instrument in writing executed by the
party against whom enforcement of any such modification or amendment is sought.
15. INTEGRATION. This Agreement constitutes the entire agreement among
the parties hereto and there have been no other prior agreements, understandings
or arrangements, oral or written, among the parties hereto with respect to the
subject matter hereof.
16. COUNTERPARTS. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17. HEADINGS. The headings contained in this Agreement are for
convenience and reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
18. NOTICES. Any notice, consent, approval, demand or other communication
to be given, made or provided for under this Agreement shall be in writing and
deemed to be fully given by its delivery personally to the person or persons
specified below or two (2) days after its being sent by registered or certified
mail, return receipt requested, to the following addresses, or to such other
address or to the attention of such other person as any party hereto shall
hereafter specify by written notice to the other party hereto:
If to Company: New York Bagel Enterprises, Inc.
300 I.M.A. Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxx 00000-0000
Attn:
-------------------------------
If to Grantee:
---------------------
---------------------
---------------------
19. GOVERNING LAW. In all respects, including all matters of
construction, validity and performance, this Agreement and the obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the State of Kansas applicable to contracts made and performed in such
state.
5
20. FURTHER ASSURANCE. Each party hereto agrees that it will, from time
to time, as may reasonably be requested by any party hereto, execute,
acknowledge, obtain, and deliver such documents, assignments, consents, and
other instruments as may be required in order to complete and effect the
transactions contemplated by this Agreement.
IN WITNESS WHEREOF, Company and Grantee have executed this Agreement in a
manner appropriate to each as of the day and year first above written.
NEW YORK BAGEL ENTERPRISES, INC.
By
------------------------------------
Title
---------------------------------
"COMPANY"
ACCEPTED AND AGREED TO:
--------------------------------------
"GRANTEE"
6
