Exhibit 10.3
XXXXXXXXX FARMS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT ("Agreement"), dated as
of the ______ day of _______________, ______ (the "Date of Grant"), is
delivered by Xxxxxxxxx Farms, Inc., and its subsidiaries and affiliates
(collectively referred to as "SFI") to
_____________________________________ (the "Optionee"), who is an
executive officer or key employee of SFI.
WHEREAS, the Board of Directors of Xxxxxxxxx Farms, Inc. (the
"Board"), recommended stockholder approval of, the stockholders approved
and the Board adopted, the Xxxxxxxxx Farms, Inc. Stock Option Plan (as
amended and restated to the date hereof, the "Plan");
WHEREAS, the Plan provides for the granting of nonstatutory stock
options by the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) to executive officers and key
employees of SFI to purchase, or to exercise certain rights with respect
to, shares of the Common Stock of SFI, par value $1.00 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) considers the
Optionee to be a person who is eligible for grant of a nonstatutory
stock option under the Plan, and has determined that it would be in the
best interest of SFI to grant the nonstatutory stock option documented
herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Grant of Nonstatutory Stock Option.
(a) Subject to the terms and conditions hereinafter set forth,
SFI, with the approval and at the direction of the Board (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan), hereby grants to the Optionee, as of the Date of Grant, an
option to purchase up to ________ shares of Stock at a price of
$___________ per share, which price per share is at or below the present
fair market value. Such option is hereinafter referred to as the
"Nonstatutory Stock Option" and the shares of stock purchasable upon
exercise of the Nonstatutory Stock Option are hereinafter sometimes
referred to as the "Nonstatutory Stock Option Shares." Notwithstanding
any provision herein to the contrary, the Option is not intended by the
parties hereto to be, and shall not be treated as, an "incentive stock
option," pursuant to and as such term is defined under Sections 421 and
422 of the Internal Revenue Code of 1986, as amended (the "Code"), but
is intended by the parties hereto to be, and shall be treated as, a
"nonstatutory stock option."
(b) This Nonstatutory Stock Option is granted subject to
the following additional terms and conditions (if none, so indicate):
2. Term and Exercise.
This Nonstatutory Stock Option may be exercised during a period
beginning one year after and ending ten years after the date of grant
thereof (the "option term"). Unless a shorter period is provided by the
Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan), this Nonstatutory Stock Option shall be
exercised in accordance with this section 2. During the first year of
the option term, no more than 25% of the initial total number of shares
covered by the Nonstatutory Stock Option may be exercised and purchased
by the Optionee. During the second year of the option term, no more than
50% of the initial total number of shares covered by the Nonstatutory
Stock Option may be exercised and purchased by the Optionee, such
percentage to include the percentage, by number of shares, purchased in
the previous year of the option term. During the third year of the
option term, no more than 75% of the initial total number of shares
covered by the Nonstatutory Stock Option may be exercised and purchased
by the Optionee, such percentage to include the percentages, by number
of shares, previously purchased in earlier years of the option term on a
cumulative basis. During the fourth year of the option term, 100% of the
initial total number of shares covered by the Nonstatutory Stock Option
may be exercised and purchased by the Optionee, such percentage to
include the percentages, by number of shares, previously purchased in
earlier years of the option term on a cumulative basis. No fractional
shares shall be issued as a result of the exercise of this Nonstatutory
Stock Option. No Nonstatutory Stock Option shall be exercisable after
the expiration of its option term.
3. Termination of Nonstatutory Stock Option.
(a) Except as provided in Sections 3(b) and 3(c) of this
Agreement, upon termination of the Optionee's employment, the
Nonstatutory Stock Option, to the extent not previously exercised, shall
terminate immediately upon such termination of employment, or if the
optionee is no longer eligible to participate in the Plan by virtue of
his or her appointment to a position that no longer falls within the
description set forth in Section 1.03 of this Plan.
(b) Upon termination of the Optionee's employment by reason of
death of the Optionee, the Nonstatutory Stock Option may be exercised,
but only to the extent exercisable on the date of such death, within one
(1) year from and after the date of the Optionee's death. The
Nonstatutory Stock Option may be exercised by the executor or
administrator of the deceased Optionee's estate or by a person receiving
the Nonstatutory Stock Option by will or under the laws of descent and
distribution of the state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by
reason of retirement or disability (as defined by the
Board (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan),
the Nonstatutory Stock Option may be exercised, but only to
the extent exercisable on the date of such retirement or disability,
during the three (3) month period following the date of such termination
of the Optionee's employment.
(d) A transfer of the Optionee's employment from one affiliate
of SFI to another shall not be deemed to be a termination of the
Optionee's employment.
(e) Notwithstanding any other provisions set forth herein or in
the Plan, if the Optionee shall (i) commit any act of malfeasance or
wrongdoing affecting SFI, (ii) breach any covenant not to compete or
employment contract with SFI, or (iii) engage in conduct that would
warrant the Optionee's discharge for cause (excluding general
dissatisfaction with the performance of the Optionee's duties, but
including any act of disloyalty or any conduct clearly tending to bring
discredit upon SFI), then any unexercised portion of the Nonstatutory
Stock Option shall immediately terminate and be void.
4. Exercise of Nonstatutory Stock Option.
(a) During the Option Term, the Optionee may exercise the
Nonstatutory Stock Option with respect to all or any part of the number
of Nonstatutory Stock Option Shares then exercisable hereunder by giving
the Board of SFI (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) written notice of intent to
exercise substantially in the form attached hereto as Exhibit A. The
notice of exercise shall specify the number of Nonstatutory Stock Option
Shares as to which the Nonstatutory Stock Option is to be exercised and
the date of exercise thereof, which date shall be at least five days
after the giving of such notice unless an earlier date shall have been
mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Optionee of the option
price for the Nonstatutory Stock 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 Board (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan), in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Optionee's notice or as soon
thereafter as is reasonably practicable, SFI shall cause to be delivered
to the Optionee, a certificate or certificates for the Nonstatutory
Stock Option Shares then being purchased (out of theretofore unissued
Stock or reacquired or surrendered Stock, as SFI may elect) upon full
payment for such Nonstatutory Stock Option Shares. The obligation of SFI
to deliver Stock shall, however, be subject to the condition that if at
any time the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) shall determine in its
discretion that (i) the listing, registration or qualification of the
Nonstatutory Stock Option or the Nonstatutory Stock Option Shares upon
any securities exchange or under any state or federal law, or (ii) the
consent or approval of any governmental regulatory body or (iii) an
agreement by the Optionee with respect to the disposition of shares of
Common Stock, is necessary or desirable as a condition of, or in
connection with, the Option or the issuance or purchase of Stock
thereunder, the Nonstatutory Stock Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan).
(c) If the Optionee fails to pay for any of the Nonstatutory
Stock Option Shares specified in such notice or fails to accept delivery
thereof, the Optionee's right to purchase such Nonstatutory Stock Option
Shares may be terminated by SFI. The date specified in the Optionee's
notice as the date of exercise shall be deemed to be the date of
exercise of the Option, provided that payment in full for the
Nonstatutory Stock Option Shares to be purchased upon such exercise
shall have been received by such date.
5. Adjustment of and Changes in Stock of SFI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spinoff, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
capital stock of SFI, the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) shall make such
adjustment as it deems appropriate in the number and kinds of shares of
Stock subject to the Nonstatutory Stock Option or in the option price;
provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Nonstatutory Stock Option.
6. Fair Market Value.
"Fair market value" as of any date and in respect of any share of
Common Stock means the closing price on such date or on the next
business day, if such date is not a business day, of a share of Common
Stock reflected in the NASDAQ National Market System traded under the
Symbol SAFM, provided that, if shares of Common Stock shall not have
been traded on NASDAQ for more than 10 days immediately preceding such
date or if deemed appropriate by the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan) for
any other reason, the fair market value of shares of Common Stock shall
be as determined by the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) in such other manner
as it may deem appropriate. In no event shall the fair market value of
any share of Common Stock be less than its par value.
7. No Rights as a Stockholder.
Neither the Optionee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of SFI
with respect to any shares of Stock purchasable or issuable upon the
exercise of this Nonstatutory Stock Option, in whole or in part, prior
to the issuance of certificates for shares of Common Stock to said
person.
8. Xxxxxxx Xxxxxxx Short-Swing Profit Liability Exemption
Requirements.
Notwithstanding any other provision of this Agreement to the
contrary, the Nonstatutory Stock Option granted under this Agreement
shall be transferrable (i) by the option holder only by will or under
the laws of descent and distribution of the state in which the option
holder resided on the date of his death or (ii) by the Company pursuant
to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act or the Rules thereunder
[except that it may be transferred to members of the Optionee s
immediate family or to trusts for their benefit or partnerships in which
such members hold the entire partnership interest].
9. No Rights of Employment.
Neither the granting of this Nonstatutory Stock Option nor its
exercise shall be construed as granting to the Optionee any right with
respect to continuance of employment with SFI. Except as may otherwise
be limited by a written agreement between SFI and the Optionee, and
acknowledged by the Optionee, the right of SFI to terminate at will the
Optionee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by SFI.
10. Amendment of Nonstatutory Stock Option.
The Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) may, without further action by
the stockholders and without the consent of or further consideration
from the Optionee, amend, condition or modify this Nonstatutory Stock
Option in response to changes in securities or other laws or rules,
regulations or regulatory interpretations thereof applicable to the
Nonstatutory Stock Option or to comply with stock exchange rules or
requirements. The Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) may amend this
Nonstatutory Stock Option otherwise with the written consent of the
Optionee.
11. Notice.
Any notice to SFI provided for in this instrument shall be
addressed to it in care of its Secretary at its executive offices at
Xxxx Xxxxxx Xxx 000, Xxxxxx, Xxxxxxxxxxx 00000, and any notice to the
Optionee shall be addressed to the Optionee at the current address shown
on the payroll records of SFI. Any notice shall be deemed to be duly
given if and when properly addressed and posted by registered or
certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
This Nonstatutory Stock Option is granted pursuant to the terms of
the Plan, which terms are incorporated herein by reference, and the
Nonstatutory Stock Option shall in all respects be interpreted in
accordance with the Plan. The Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) shall
interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on
the parties hereto and any other person claiming an interest hereunder,
with respect to any issue arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in accordance
with the laws of the State of Mississippi, except to the extent
preempted by federal law, which shall to that extent govern.
IN WITNESS WHEREOF, SFI has caused its duly authorized officers to
execute and attest this Nonstatutory Stock Option Agreement, and to
apply the corporate seal hereto, and the Optionee has placed his or her
signature hereon, effective as of the Date of Grant.
XXXXXXXXX FARMS, INC.
ATTEST:
By:
Name:
Title:
ACCEPTED AND AGREED TO:
Optionee
NOTICE OF EXERCISE OF NONSTATUTORY STOCK OPTION
XXXXXXXXX FARMS, INC.
ATTENTION: The Board of Directors
Stock Option Committee
Gentlemen:
Notice is hereby given of the undersigned's intent to exercise the
Nonstatutory Stock Option granted to the undersigned pursuant to the
Nonstatutory Stock Option Agreement dated _______________, ______,
entered into by and between the undersigned and Xxxxxxxxx Farms, Inc.
The Nonstatutory Stock Option shall be exercised with respect to
__________________ (______) shares of the common stock, par value $1.00
per share, of Xxxxxxxxx Farms, Inc., at the exercise price of
$__________ per share. The date of exercise shall be _______________,
______, which is five days or more after the date of this notice.
In connection with the exercise of the Nonstatutory Stock Option,
the undersigned authorizes SFI to withhold all appropriate federal and
state income and payroll taxes where cash is paid. Where only stock is
transferred, the undersigned will remit to SFI an amount in cash equal
to the appropriate federal and state income and payroll taxes upon being
advised of the amount. Alternatively, SFI may reduce the number of
shares distributed by an amount or number equal in value to the
withholding amount.
Employee/Optionee
Dated: ,
Exhibit A
