EXHIBIT 10.27
XXXXXX'X TRADING COMPANY, INC.
2004 STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into as of March
1, 2004, by and between Xxxxxx'x Trading Company, Inc., an Indiana corporation
("Company"), and Xxxxx X. Xxxxxx ("Optionee").
R E C I T A L S
A. Optionee is employed by the Company pursuant to an Amended
Employment Agreement dated August 29, 2003 ("Employment Agreement").
B. Company has determined to grant Optionee the right to purchase
shares of common stock of the Company pursuant to the terms of this Agreement.
C. The Options (as hereinafter defined) granted pursuant to this
Agreement are not granted pursuant to any plan and shall be subject to approval
by Company's shareholders at Company's next annual meeting scheduled for May 21,
2004 (the "Annual Meeting"). Nevertheless, except as provided herein, such
Options shall be subject to the same terms and conditions as if they had been
granted pursuant to the Xxxxxx'x Trading Company, Inc. 1999 Stock Option Plan,
as amended ("Plan").
A G R E E M E N T
NOW, THEREFORE, in consideration of the covenants hereinafter set
forth, the parties agree as follows:
1. Options; Number of Shares.
(a) Subject only to approval by Company's shareholders at the
Annual Meeting, Company hereby grants to Optionee the right to purchase
(each an "Option" and collectively, the "Options") up to 100,000 shares
of common stock, no par value, of the Company ("Common Stock" or
"Shares") at a per share price ("Purchase Price") equal to the closing
price of Common Stock on the date hereof ($8.74).
(b) Although the Options are not issued pursuant to the Plan, the
Options and the right to purchase all or any portion of the Shares are
subject to the terms and conditions stated in this Agreement and in the
Plan, as if such Options had been granted pursuant to the Plan. Upon
exercise of an Option and payment of the Purchase Price, Optionee shall
become a shareholder of the Company, with all rights and privileges of
a shareholder of the Company in respect of any Shares issuable upon
such exercise. It is intended that the Options will not qualify for
treatment as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended ("Code").
2. Exercise Criteria.
(a) Unless vesting of the Options is accelerated pursuant to
Subsection (b), one-third of the Options shall become vested on each of
the first three anniversaries of the date hereof, provided Optionee is
employed by Company on such anniversary date.
(b) Upon a Change in Control (as defined in Section 7 of the
Employment Agreement), all outstanding Options shall become 100%
vested.
(c) If the Plan and the outstanding Options terminate pursuant to
Section 13(b) of the Plan (with no substitution, assumption,
settlement, or other continuation), and ten days' notice referred to in
Section 13(b) is required to be given to Optionee (or would be required
to be given to Optionee if his Options were vested on such date), all
of the Options shall become vested as of the date preceding such
notice, and Optionee shall have the exercise rights specified in
Section 13(d) with respect to all outstanding Options.
3. Termination of Options. The Options and Optionee's right to
exercise the Options shall terminate on the expiration of seven (7) years from
the date hereof, unless terminated earlier pursuant to Section 4 hereof or the
Plan (including, without limitation, Section 13(b) of the Plan).
4. Effect of Termination of Employment or Death.
(a) If the Company terminates Optionee's employment for Cause (as
defined in Section 4(a) of the Employment Agreement), or Optionee
resigns for other than Good Reason or Special Resignation pursuant to
Section 4(e) or 4(f) of the Employment Agreement, Optionee's right to
exercise any outstanding Options shall terminate immediately upon his
termination of employment.
(b) If Optionee's employment terminates during the term of the
Employment Agreement pursuant to Section 4(b), (c), (d), (e), or (f),
Optionee (or, Optionee's estate, in case of his death) may exercise any
or all of his outstanding vested Options at any time before the earlier
of (i) the first anniversary of his termination of employment or (ii)
the date on which his right to exercise such vested Options would have
terminated if he had not terminated employment.
(c) If Optionee's employment terminates for a reason other than
as provided in Subsection (a) or (b) above, Optionee (or his estate, in
case of his death) may exercise any or all of his outstanding vested
Options at any time before the earlier of (i) 90 days after his
termination of employment date or (ii) the date on which his right to
exercise such vested Options would have terminated if he had not
terminated employment.
5. Termination of Employment or Other Relationship. The termination
of Optionee's employment shall not accelerate the vesting of the Options. The
Options may be exercised only with respect to that number of Shares which could
have been exercised under the Options had such Options been exercised by
Optionee on the date of such termination (for a termination other than Cause)
and only for the limited period of time set forth in Section 4.
6. Death of Optionee: No Assignment. The rights of Optionee under
this Agreement may not be assigned or transferred except by will, by the laws of
descent or distribution, and may be exercised during the lifetime of Optionee
only by such Optionee; provided, however, that in the event of disability
(within the meaning of Section 22(e)(3) of the Code) of Optionee, Optionee's
designee or legal representative may exercise the Options on behalf of Optionee
(provided the Options would have been exercisable by Optionee) until the right
to exercise the Options otherwise expires. Any attempt to sell, pledge, assign,
hypothecate, transfer, or otherwise dispose of the Options in contravention of
this Agreement or the Plan shall be void. If Optionee should die while Optionee
is engaged in an employment relationship with the Company or within 90 days
after termination of such relationship, and provided Optionee's rights hereunder
shall have vested, in whole or in part, pursuant to Section 2 hereof, Optionee's
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designee, legal representative, or legatee, the successor trustee of Optionee's
inter vivos trust or the person who acquired the right to exercise the Options
by reason of the death of Optionee (individually, a "Successor") shall succeed
to Optionee's rights under this Agreement. After the death of Optionee, only a
Successor may exercise the Options.
7. Exercise of Options. No Option granted under this Agreement shall
be exercisable until and except to the extent that it has vested. On or after
the vesting of the Options in accordance with Section 2 hereof and until
termination of the Options in accordance with this Agreement and the Plan, the
Options may be exercised by Optionee (or such other person specified in Section
6 hereof) to the extent exercisable as determined under Section 2 hereof, upon
delivery of the following to the Company at its principal executive offices:
(a) a written notice of exercise which identifies this Agreement,
the type of Option to be exercised, and states the number of Shares to
be purchased;
(b) a check, cash or any combination thereof in the amount of the
aggregate Purchase Price (or payment of the aggregate Purchase Price in
such other form of lawful consideration as the Committee may approve
from time to time under the provisions of Section 7 of the Plan);
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal,
state or other applicable tax laws with respect to the taxable income,
if any, recognized by Optionee in connection with the exercise, in
whole or in part, of the Options (unless the Company and Optionee shall
have made other arrangements for deductions or withholding from
Optionee's wages, bonus or other income paid to Optionee by the
Company, provided, however, such arrangements must satisfy the
requirements of all applicable tax laws);
(d) any written representations and/or undertakings, in such form
and substance as the Company may deem necessary or desirable to assure
compliance with all applicable legal and accounting requirements; and
(e) such further acts as may be necessary to register Optionee as
a shareholder of the Company.
Fractional share interests shall be disregarded, but may be cumulated. No fewer
than 100 Options may be exercised at any one time, unless the number is the
total number of Options exercisable at the time.
8. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued employment through each applicable vesting
date as a condition to the vesting of the applicable installment of the Options
and the rights and benefits under this Agreement. Partial employment, even if
substantial, during any vesting period will not entitle Optionee to any
proportionate vesting or avoid or mitigate a termination of rights and benefits
upon or following a termination of employment as provided in Section 3 above or
under the Plan.
9. No Rights as a Stockholder. Neither Optionee nor any other person
entitled to exercise any Option shall have any of the rights or privileges of a
stockholder of the Company as to any shares of Common Stock until the issuance
and delivery to him or her of a certificate evidencing the shares registered in
his or her name. No adjustment will be made for dividends or other rights as to
a stockholder for which a record date is prior to such date of delivery.
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10. The Plan. The Options and all rights of Optionee thereunder
and/or hereunder are subject to, and Optionee agrees to be bound by, all of the
terms and conditions of the Plan, which are incorporated herein by this
reference, and apply to the same extent as if the Options had been issued
pursuant to the Plan; provided, however, the limitation in Section 5(b) of the
Plan on the number of options that may be granted in any calendar year to an
individual shall not apply. Unless otherwise expressly provided in these terms
and conditions, provisions of the Plan that confer discretionary authority on
the Board or the Committee do not (and shall not be deemed to) create any
additional rights in Optionee not expressly set forth in this Agreement or in a
written amendment hereto signed by the Company. If there is any conflict or
inconsistency between the terms and conditions of this Agreement and of the
Plan, the terms and conditions of the Plan shall govern; provided, however,
notwithstanding any provision of the Plan to the contrary, including the final
sentence of Section 8.1 thereof, any determination of whether Optionee's
employment has terminated and the section of Optionee's Employment Agreement
pursuant to which such termination occurs shall be made pursuant to the terms of
the Employment Agreement without regard to the Plan or this Option Agreement.
Optionee acknowledges receipt of a complete copy of the Plan and agrees to be
bound by its terms. Optionee acknowledges reading and understanding the Plan.
(a) Further Assurances. Each party hereto agrees to perform any
further acts and execute and deliver any documents which may be
reasonably necessary to carry out the intent of this Agreement.
(b) Notices. Except as otherwise provided herein, all notices,
requests, demands and other communications under this Agreement shall
be in writing, and if by telegram or telecopy, shall be deemed to have
been validly served, given or delivered when sent, or if by personal
delivery or messenger or courier service, or by registered or certified
mail, shall be deemed to have been validly served, given or delivered
upon actual delivery, at the following addresses, telephone and
facsimile numbers (or such other address(es), telephone and facsimile
numbers a party may designate for itself by like notice):
If to Optionee:
To the Optionee's most recent address or telecopy number reflected on
the Company's records.
If to the Company:
Xxxxxx'x Trading Company, Inc.
Xxx Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxxxx
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(c) Amendments. This Agreement may be amended only by a written
agreement executed by both of the parties hereto. The Company may,
however, unilaterally waive any provision hereof in writing to the
extent such waiver does not adversely affect the interests of Optionee
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hereunder, but no such waiver shall operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other
provision hereof.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana without
regard to conflict of law principles thereunder.
(e) Entire Agreement. This Agreement constitutes the entire
agreement and understanding among the parties pertaining to the subject
matter hereof and supersedes any and all prior agreements, whether
written or oral, relating hereto.
(f) Headings. Introductory headings at the beginning of each
section and subsection of this Agreement are solely for the convenience
of the parties and shall not be deemed to be a limitation upon or
description of the contents of any such section and subsection of this
Agreement.
(g) Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and both of
which, when taken together, shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the date first above written.
THE COMPANY: OPTIONEE:
Xxxxxx'x Trading Company, Inc.
an Indiana corporation
By: /s/ XXXXXX X. XXXXXXXX /s/ XXXXX X. XXXXXX
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Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxx
Chairman of the Board
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