EXHIBIT 10.4
AMERICAN ITALIAN PASTA COMPANY
2000 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
This Stock Option Award Agreement (the "Award Agreement"), made this _____
day of ______________, 200___ evidences the grant, by American Italian Pasta
Company, (the "Company"), of a stock option to ______________________ (the
"Grantee") on the date hereof (the "Date of Grant"). By accepting the Award and
executing this Award Agreement, the Grantee agrees to be bound by the provisions
hereof and of the American Italian Pasta Company 2000 Equity Incentive Plan (the
"Plan"). Capitalized terms not defined herein shall have the same meaning as
used in the Plan.
1. Shares Optioned and Option Price. The Grantee shall have an option to
purchase __________ shares of the Company's Common Stock, $0.01 par value (the
"Shares"), at an exercise price of $___________ for each share (the "Option"),
subject to the terms and conditions of this Award Agreement and of the Plan, the
provisions of which are incorporated herein by this reference. The Option is
not, nor is it intended to be, an Incentive Stock Option as described in section
422 of the Internal Revenue Code of 1986.
2. Exercise Period. The Option may be exercised, from time to time, with
respect to the following number of Shares subject to this Option: (i) prior to
the first anniversary of the Date of Grant, none of such Shares; (ii) from and
after the first anniversary of the Date of Xxxxx, _____% of such Shares; (iii)
from and after the second anniversary of the Date of Grant, _____% of such
Shares (less any Shares as to which this Option shall have been exercised prior
to such second anniversary); (iv) from and after the third anniversary of the
date of Grant, _____% of such Shares (less any Shares as to which this Option
shall have been exercised prior to such third anniversary); (v) from and after
the fourth anniversary of the Date of Grant, _____% of such Shares (less any
Shares as to which this Option shall have been exercised prior to such fourth
anniversary), and (vi) from and after the fifth anniversary of the Date of
Grant, _____% of such Shares (less any Shares as to which this Option shall have
been exercised prior to such fifth anniversary. Provided, however, that the
Grantee's right to exercise the Option shall terminate on the earliest to occur
of the following dates:
(a) the tenth anniversary of the Date of Xxxxx;
(b) the first anniversary of the date of the Grantee's Termination of
Service on account of Retirement, Disability or death;
(c) the date three months following the date of the Grantee's Termination
of Service for any reason other than Retirement, Disability, death or
for Cause (the "Termination Date"); provided, however, the Committee
may, in its sole discretion, allow the Grantee to exercise this option
at a later date following the Termination Date; and
(d) immediately upon a Termination of Service for Cause.
Provided further that, during any period in which exercise is allowed following
the date of the Grantee's Termination of Service for any reason, that portion of
the Shares that was not exercisable on the date of the Grantee's Termination of
Service shall not become exercisable.
3. Restriction on Exercise. Notwithstanding the foregoing provisions of
paragraph 2 or any other provision of this Award Agreement, the Committee, in
its sole discretion, may, only with respect to any unvested portion of this
Option, reduce the number of Shares subject to the Option or may cancel the
Option in its entirety if the Grantee (a) takes other employment or renders
services to others without the written consent of the Company; or (b) conducts
himself or herself in a manner that the Committee, in its sole discretion, deems
has adversely affected or may adversely affect the Company. Except as provided
in the last sentence of this paragraph, the Grantee will not be entitled to any
remuneration or compensation whatsoever for the loss of all or a portion of the
Grantee's Option if the number of Shares subject to the Grantee's Option are
reduced, or if the Grantee's Option is canceled in its entirety, pursuant to
this paragraph. If at the time this Option was granted the Grantee and the
Company acknowledged in writing that this Option was being granted in lieu of
other specifically described compensation to the Grantee, then, to the extent
that pursuant to this paragraph the number of Shares subject to this Option is
reduced or this Option is canceled, then, the Company shall pay to the Grantee
the proportionate amount of such forgone compensation represented by the reduced
number of Shares or cancellation of this Option.
4. Reload Option.
(a) Subject to Section 4(b) below, in addition to the Option granted
hereby (the "Underlying Option"), the Company will grant to Grantee a
reload option (the "Reload Option") if the Grantee (i) is a
Participant when Grantee exercises all or a portion of the Underlying
Option or all or a portion of a Reload Option granted hereunder, (ii)
has not received a Reload Option pursuant to any other option exercise
within the six (6) months prior to the exercise of all or a portion of
the Underlying Option, and (iii) pays the Exercise Price for such
Shares or any required tax withholding with respect to such Shares
with Shares that have been held by the Grantee for at least six (6)
months (the "Tendered Shares"). The Reload Option shall grant the
right to purchase Shares of Common Stock equal in number to the number
of Tendered Shares. The date on which the Tendered Shares are tendered
to the Company is the Reload Grant Date. The Exercise Price of the
Reload Option is the Fair Market Value of the Common Stock on the
Reload Grant Date. The Reload Option may be exercised at any time
during the remaining term of the Underlying Option (subject to earlier
termination as provided in the Plan or in this Award Agreement).
Except as provided in this Section 4, the Reload Option is subject to
all of the other terms and provisions of this Award Agreement.
(b) No Reload Option will be granted hereunder and no Reload Option may be
exercised if, at the time of such proposed grant or exercise, all
Shares reserved for issuance under the Plan are the subject of
outstanding Options. Any rights of the Grantee with respect to such
Reload Option shall be automatically void at such
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time. No Reload Option shall be granted in connection with the exercise of an
Option that has been transferred by the initial Grantee.
5. Method of Exercise. To the extent that the Option is exercisable
hereunder, it may be exercised in full or in part by the Grantee or, in the
event of the Grantee's death, by the person or persons to whom the Option was
transferred by will or the laws of descent and distribution, by delivering or
mailing written notice of the exercise and full payment of the purchase price to
the Secretary of the Company and any applicable withholding taxes. The written
notice shall be signed by each person entitled to exercise the Option and shall
specify the address and social security number of each person. If any person
other than the Grantee purports to be entitled to exercise all or any portion of
the Option, the written notice shall be accompanied by proof, satisfactory to
the Secretary of the Company, of that entitlement. The written notice shall be
accompanied by full payment made by any one or more of the following means: (a)
cash, personal check or electronic funds, transfer; (b) shares of Stock with a
Fair Market Value on the effective date of such exercise equal to the Exercise
Price and owned by the Grantee for at least six (6) months (or such longer
period as is determined by the Company required by applicable accounting
standards to avoid a charge to the Company's earnings) or shares of Stock that
were purchased on the open market; or (c) pursuant to procedures previously
approved by the Company, through the sale of the Shares acquired on exercise of
this Option through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to deliver promptly
to the Company the amount of sale or loan proceeds sufficient to pay for such
Shares, together with, if requested by the Company, the amount of federal,
state, local or foreign withholding taxes payable by reason of such exercise.
Payment may also be made in such other manner as may be permitted by the Plan at
the time of exercise, subject to approval by the Committee. The written notice
will be effective and the Option shall be deemed exercised to the extent
specified in the notice on the date that the written notice (together with
required accompaniments) is received by the Secretary of the Company at its then
executive offices during regular business hours.
6. Issue of Shares Upon Exercise. As soon as practicable after receipt of
an effective written notice of exercise and full payment of the purchase price
as provided in paragraph 4, the Secretary of the Company shall cause ownership
of the appropriate number of Shares to be transferred to the person or persons
exercising the Option by having a certificate or certificates for those Shares
registered in the name of such person or persons and shall have each certificate
delivered to the appropriate person. Notwithstanding the foregoing, if the
Company or a Subsidiary requires reimbursement of any tax required by law to be
withheld with respect to Shares received upon exercise of an Option, the
Secretary shall not transfer ownership of those Shares until the required
payment is made.
7. Transferability of Options. The Grantee may transfer the Option to (i)
the spouse, children, or grandchildren of the Grantee ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefits of such Immediate
Family Members, or (iii) a partnership in which such Immediate Family Members
are the only partners, provided that (a) there may be no consideration for any
such transfer and (b) subsequent transfers of the Option shall be prohibited,
except by will or the laws of descent and distribution. Following transfer, the
Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to
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transfer, provided that for the purposes of the Award Agreement, the term
"Grantee" shall be deemed to refer to the transferee. The event of a Termination
of Service shall continue to be applied with respect to the original Grantee,
following which the Option shall be exercisable by the transferee only to the
extent, and for the periods, specified in Paragraph 2. Neither the Committee nor
the Company shall have any obligation to provide notice to a transferee of
termination of the Option under the terms of this Award Agreement.
7.1 Transferees of Stockholders. The Company shall not be required to
transfer any Shares on its books which shall have been sold, assigned
or otherwise transferred in violation of this Award Agreement, or to
treat as owner of such shares of stock, or to accord the right to vote
as such owner or to pay dividends to, any person or organization to
which any such Shares shall have been sold, assigned or otherwise
transferred, from and after any sale, assignment or transfer of any
Share made in violation of this Award Agreement. Any transfer in
violation of the terms of this Award Agreement shall be deemed null
and void.
8. Authorized Leave. For purposes hereof, an authorized leave of absence
(authorized by the Company or a Subsidiary to the Grantee in writing) shall not
be deemed a Termination of Service hereunder.
9. Taxes. The Grantee will be solely responsible for any Federal, state
or local income taxes imposed in connection with the exercise of the Option or
the delivery of Shares incident thereto, and the Grantee authorizes the Company
or any Subsidiary to make any withholding for taxes which the Company deems
necessary or proper in connection therewith, from any amounts due to the Grantee
by the Company. Subject to approval by the Committee, the Grantee may satisfy
such withholding obligations, in whole or in part, by (a) electing to have the
Company withhold otherwise deliverable Shares or (b) delivering to the Company
Shares then owned by Grantee having a Fair Market Value equal to the amount
required to be withheld.
10. No Conflict. In the event of a conflict between this Award Agreement
and the Plan, the provisions of the Plan shall govern.
11. Governing Law. This Award shall be governed under the laws of the
State of Delaware.
12. Change in Control. The effect of a Change of Control shall be as set
forth in the Plan. Change as determined by the Committee.
AMERICAN ITALIAN PASTA COMPANY
By:______________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President & CEO
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ACKNOWLEDGMENT
The undersigned Xxxxxxx acknowledges that he or she understands and agrees to be
bound by each of the terms and conditions of this Award Agreement.
_________________________________ _________________________________
Printed Name Signature
Date:____________________________
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