STOCK OPTION AGREEMENT
[EMPLOYEE INCENTIVE/NON-INCENTIVE STOCK OPTION AGREEMENT UNDER PLAN]
AGREEMENT, made as of _________ __, _____ by and between SHOCHET
HOLDING CORP., a Delaware corporation (the "Company"), and (the "Employee" or
"Holder").
WHEREAS, on , (the "Grant Date"), pursuant to the terms and conditions
of the Company's 1999 Performance Equity Plan (the "Plan"), the Board of
Directors of the Company or the Committee authorized the grant to the Employee
of an option (the "Option") to purchase an aggregate of
shares of the authorized but unissued Common Stock of the Company,
$.0001 par value (the "Common Stock"), conditioned upon the Employee's
acceptance thereof upon the terms and conditions set forth in this Agreement and
subject to the terms of the Plan (capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Plan); and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
x. Xxxxx of Stock Option. The Company hereby grants Employee
the Option to purchase all or any part of an aggregate of shares of Common Stock
(the "Option Shares") on the terms and conditions set forth herein and subject
to the provisions of the Plan.
a. Incentive Stock Option. The Option represented hereby is
intended to be an Option that qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
a. Exercise Price. The exercise price of the Option shall be
$ per share, subject to adjustment as hereinafter provided.
4. Exercisability. This Option shall become exercisable on , subject to
the terms and conditions of the Plan and this Agreement, and shall remain
exercisable until the close of business on _________ __, ____(the "Exercise
Period").
OR
4. Exercisability. This Option shall become exercisable, subject to the
terms and conditions of the Plan and this Agreement, as follows: (i) the right
to purchase (331/3%) of the Option Shares shall be exercisable on and after
_______ __, ____ (ii) the right to purchase an additional (331/3%) of the Option
Shares shall be exercisable on and after , ____ and (iii) the right to purchase
the remaining (331/3%) of the Option Shares shall be exercisable on and after
_______ __, ____ After a portion of the Option becomes exercisable, it shall
remain exercisable except as otherwise provided herein, until the close of
business on __________ __, ____(the "Excercise Period").
5. Withholding Tax. Not later than the date as of which an amount first
must be included in the gross income of Employee for Federal income tax purposes
with respect to the Option, Employee may be required to pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount. The obligations of the Company under the Plan
and pursuant to this Agreement shall be conditional upon such payments or
arrangements with the Company, if such payments or arrangements are required,
and the Company shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to Employee from the
Company.
6. Adjustments.
(a) In the event of a stock split, stock dividend, combination
of shares, or any other 6407-0200 269903.1 similar change in the Common Stock of
the Company as a whole, the Board of Directors of the Company shall make
equitable, proportionate adjustments in the number and kind of shares covered by
the Option and in the option price hereunder.
(b) In the event of any reclassification or reorganization of
the outstanding shares of Common Stock other than a change covered by subsection
(a) hereof or that solely affects the par value of such shares of Common Stock,
or in the case of any merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and that does not result in any reclassification
or reorganization of the outstanding shares of Common Stock), the Holder shall
have the right thereafter (until the expiration of the right of exercise of this
Option) to receive upon the exercise hereof after such event, for the same
aggregate Exercise Price payable hereunder immediately prior to such
reclassification, reorganization, merger or consolidation by a holder of the
number of shares of Common Stock of the Company obtainable upon exercise of this
Option immediately prior to such event. The provisions of this subsection (b)
shall similarly apply to successive reclassifications, reorganizations, mergers
or consolidations, sales or other transfers.
7. Effect of Termination of Employment.
a. Termination Due to Death. If Employee's employment by the
Company terminates by reason of death, the portion of the Option, if any, that
was exercisable as of the date of death may thereafter be exercised by the legal
representative of the estate or by the legatee of the Employee under the will of
the Employee, for a period of one year from the date of such death or until the
expiration of the Exercise Period, whichever period is shorter. The portion of
the Option, if any, that was not exercisable as of the date of death shall
immediately expire.
b. Termination Due to Disability. If Employee's
employment by the Company terminates by reason of disability (as such term is
defined in the Plan), the portion of the Option, if any, that was exercisable as
of the date of disability may thereafter be exercised by the Employee for a
period of one year from the date of such termination or until the expiration of
the Exercise Period, whichever period is shorter. The portion of the Option, if
any, that was not exercisable as of the date of termination shall immediately
expire.
c. Termination by the Company Without Cause and/or Due
to Retirement. If Employee's employment is terminated by the Company without
cause or due to the normal retirement of Employee after his 65th birthday, then
the portion of the Option that has vested by the date of termination of
employment may be exercised for a period of three months from termination of
employment or until the expiration of the Exercise Period, whichever is shorter.
The portion of the Option, if any, not yet exercisable on the date of
termination of employment shall immediately expire.
d. Other Termination.
i. If Employee's employment is terminated for
any reason other than (i) death, (ii) disability, (iii) normal retirement, or
(iv) without cause by the Company, the Option, whether or not then exercisable,
shall expire on the date of termination of employment.
ii. The Board of Directors of the Company or the
Committee, in the event the Employee's employment is terminated for cause, may
require the Employee to return to the Company the economic benefit of any Option
Shares purchased hereunder by the Employee within the six month period prior to
the date of termination. In such event, the Employee hereby agrees to remit to
the Company, in cash, an amount equal to the difference between the Fair Market
Value (on the date of termination) of the Option Shares so purchased by Employee
(or the sales price of such Option Shares if the Option Shares were sold during
such six month period) and the Exercise Price.
e. Competing With the Company. In the event that, within
six (6) months after the date of termination of Employee's employment with the
Company, Employee accepts employment with, or becomes engaged as a consultant
by, any competitor of, or otherwise competes with, the Company, the Committee,
in its sole discretion, may require such Employee to return to the Company the
economic value of any Option Shares purchased hereunder by the Employee within
the six-month period prior to the date of termination. In such event, Employee
agrees to remit the economic value to the Company in accordance with Section
7.4.2.
a. Method of Exercise.
a. Notice to the Company. The Option may be exercised in whole
or in part by written notice in the form attached hereto as Exhibit A directed
to the Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice.
b. Delivery of Option Shares. The Company shall deliver a
certificate for the Option Shares to the Employee as soon as practicable after
payment therefor.
c. Payment of Purchase Price.
i. Cash Payment. The Employee shall make cash
payments by wire transfer, certified or bank check or personal check, in each
case payable to the order of the Company. The Company shall not be required to
deliver certificates for Option Shares until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.
ii. Cashless Payment. The Company, in its sole
discretion, may allow Employee to use Common Stock of the Company owned by him
to pay the purchase price for the Option Shares by delivery of stock
certificates in negotiable form that are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Shares of
Common Stock used for this purpose shall be valued at the Fair Market Value on
the last trading day preceding the date of exercise.
8.3.3. Payment of Withholding Tax. Any required
withholding tax may be paid in cash or with Common Stock in accordance with
Sections 8.3.1. and 8.3.2.
8.3.4. Exchange Act Compliance. Notwithstanding
the foregoing, the Company shall have the right to reject payment in the form of
Common Stock if in the opinion of counsel for the Com pany, (i) it could result
in an event of "recapture" under Section 16(b) of the Exchange Act (as defined
in the Plan); (ii) such shares of Common Stock may not be sold or transferred to
the Company; or (iii) such transfer could create legal difficulties for the
Company.
a. Nonassignability. The Option shall not be assignable
or transferable, without the consent of the Company, except by will or by the
laws of descent and distribution in the event of the death of the Employee. No
transfer of the Option by the Employee by will or by the laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of the will and/or
such other evidence as the Company may deem necessary to establish the validity
of the transfer and the acceptance by the transferee or transferees of the terms
and conditions of the Option.
a. Company Representations. The Company hereby
represents and warrants to the Employee that:
(1) the Company, by appropriate and all required
action, is duly authorized to enter into this Agreement and consummate
all of the transactions contemplated hereunder; and
(2) the Option Shares, when issued and delivered by
the Company to the Employee in accordance with the terms and conditions
hereof, will be duly and validly issued and fully paid and
non-assessable.
a. Employee Representations. The Employee hereby
represents and warrants to the Company that:
(1) he or she is acquiring the Option and shall
acquire the Option Shares for his own account and not with a view
towards the distribution thereof;
(2) he or she has received a copy of the Plan as in
effect as of the date of this Agreement;
(3) he or she has received a copy of all reports and
documents required to be filed by the Company with the Securities and
Exchange Commission pursuant to the Exchange Act within the last 24
months and all reports issued by the Company to its stockholders;
(4) he or she understands that he or she must bear
the economic risk of the investment in the Option Shares, which cannot
be sold by him unless they are registered under the Securities Act of
1933 (the "Securities Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the
Option Shares for sale under the Securities Act;
(5) in his or her position with the Company, he or
she has had both the opportunity to ask questions and receive answers
from the officers and directors of the Company and all persons acting
on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it
without unreasonable effort or expense necessary to verify the accuracy
of the information obtained pursuant to clause (iii) above;
(6) he or she is aware that the Company shall place
stop transfer orders with its transfer agent against the transfer of
the Option Shares in the absence of registration under the 1933 Act or
an exemption therefrom as provided herein; and
(7) the certificates evidencing the Option Shares
shall bear the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of , , a copy of which is on file with the
Company, and may not be transferred, pledged or
disposed of except in accordance with the terms and
conditions thereof."
a. Restriction on Transfer of Option Shares.
(a) Anything in this Agreement to the contrary
notwithstanding, Employee hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him without
registration under the Securities Act, or in the event that they are not so
registered, unless (i) an exemption from the Securities Act registration
requirements is available thereunder, and (ii) the Employee has furnished the
Company with notice of such proposed transfer and the Company's legal counsel,
in its reasonable opinion, shall deem such proposed transfer to be so exempt.
(b) Anything in this Agreement to the contrary
notwithstanding, Employee hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him except in
accordance with the Company's policy, if any, regarding the regarding the sale
and disposition of securities owned by employees and/or directors of the
Company.
a. Miscellaneous.
a. Notices. All notices, requests, deliveries, payments,
demands and other communications that are required or permitted to be given
under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier,
return receipt requested, to the parties at their respective addresses set forth
herein, or to such other address as either shall have specified by notice in
writing to the other. Notice shall be deemed duly given hereunder when delivered
or mailed as provided herein.
b. Plan Paramount; Conflicts with Plan. This Agreement and the
Option shall, in all respects, be subject to the terms and conditions of the
Plan, whether or not stated herein. In the event of a conflict between the
provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall in all respects be controlling.
c. Employee and Stockholder Rights. Employee shall not have
any of the rights of a stockholder with respect to the Option Shares until such
shares have been issued after the due exercise of the Option. Nothing contained
in this Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
employment agreement with the Company, or if there exists no such agreement, to
terminate Employee at will.
d. Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
e. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. This
Agreement may not be amended except by writing executed by the Employee and the
Company.
f. Binding Effect; Successors. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives, any rights, remedies,
obligations or liabilities.
g. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without regard
to choice of law provisions); provided, however, that all matters relating to or
involving corporate law shall be governed by the Delaware General Corporation
Law.
h. Headings. The headings contained herein are for the sole
purpose of convenience of reference and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written:
Address:
By:
---------------------------------
EMPLOYEE: Address:
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6407-0200 269903.1
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
----------------------------
DATE
Company's Name
Address
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
-------------------------
Gentlemen:
In accordance with my Stock Option Agreement dated as of ,
("Agreement") with (the "Company"), I hereby irrevocably elect to exercise the
right to purchase _________ shares of the Company's common stock, par value
$.001 per share ("Common Stock"), which are being purchased for investment and
not resale.
As payment for my shares, enclosed is (check and complete
applicable box[es]):
|_| a [personal check] [certified check] [bank check]
payable to the order of the Company in the sum of
$_________;
|_| confirmation of wire transfer in the amount of
$_____________; and/or
|_| with the consent of the Company, a certificate for
__________ shares of the Company's Common Stock, free
and clear of any encumbrances, duly endorsed, having
a Fair Market Value (as such term is defined in the
Company's 1999 Performance Equity Plan) of
$_________.
I hereby represent and warrant to, and agree with, the Company
that:
(i) I am acquiring the Option Shares for my own
account, for investment, and not with a view towards the distribution
thereof;
(ii) I have received a copy of the Plan and all
reports and documents required to be filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934 within the
last 24 months and all reports issued by the Company to its
stockholders;
(iii) I understand that I must bear the economic risk
of the investment in the Option Shares, which cannot be sold by me
unless they are registered under the Securities Act of 1933 (the
"Securities Act") or an exemption therefrom is available thereunder and
that the Company is under no obligation to register the Option Shares
for sale under the Securities Act;
(iv) I agree that I will not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by me hereby
except in accordance with Company's policy, if any, regarding the sale
and disposition of securities owned by employees and/or directors of
the Company;
(v) in my position with the Company, I have had
both the opportunity to ask questions and receive answers from the
officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder
and to obtain any additional information to the extent the Company
possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(vi) I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the Securities Act
or an exemption therefrom as provided herein;
(vii) my rights with respect to the Option Shares
shall, in all respects, be subject to the terms and conditions of the
Company's 1999 Performance Equity Plan and this Agreement; and
(viii) the certificates evidencing the Option
Shares shall bear the following legends:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the
Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of , , a copy
of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with
the terms and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
------------------------------- --------------------------------
(Signature) (Address)
------------------------------- ---------------------------------
(Print Name)
---------------------------------
(Social Security Number)
