Exhibit 10.1
Xxxxxx X. Xxxxxxxx Non-Employee Director Non-Qualified Stock Option Agreement
HARRY'S FARMERS MARKET, INC.
XXXXXX X. XXXXXXXX
NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into this 30th day of January,
1997 (the "Grant Date") by and between HARRY'S FARMERS MARKET, INC., a
Georgia corporation (the "Company"), and XXXXXX X. XXXXXXXX ("Grantee").
BACKGROUND
A. Grantee is a non-employee director of the Company and is not at
the present time eligible to receive stock options, restricted stock and
other stock-based awards from the Company other than as currently set
forth under the terms of the Company's 1996 Director Stock Option Plan
(the "Plan"). Although granted outside of the Plan, the option
represented by this Agreement is intended to be generally consistent with
the terms and conditions of the Plan. Therefore, for purposes of
reference only, and not to imply that the option granted hereby is
governed by or issued under the Plan, capitalized terms used herein and
not defined in context are defined in Section 6.11 hereof or in the Plan.
B. The Company and Grantee wish to confirm herein the terms,
conditions, and restrictions of the option.
C. For and in consideration of the premises, the mutual covenants
contained herein, and other good and valuable consideration, the parties
hereto agree:
ARTICLE 1
GRANT AND EXERCISE OF OPTION
1.1 Grant of Option. Subject to the terms, restrictions,
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limitations, and conditions stated herein, the Company hereby grants to
Grantee a non-qualified option (the "Option") to purchase all or any part
of 50,000 shares of Class A Common Stock, no par value per share (the
"Option Shares"). This Option is intended to be a non-qualified stock
option.
1.2 Exercise of Option.
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(a) Except as provided in Section 1.4 below, the Option may be
exercised during the Option Period (as defined in Section 1.4) only
to the extent of the number of Option Shares that are then vested
("Vested Shares") as determined pursuant to the vesting schedule
attached hereto as Schedule I.
(b) The Option may be exercised with respect to all or any
portion of the Vested Shares at any time during the Option Period by
the delivery to the Company, at its principal place of business, of
(i) a written notice of exercise, in substantially the form attached
hereto as Exhibit A (or such other form as shall be required by the
Board of Directors or as otherwise permitted by the Board of
Directors), prior to the date upon which Grantee desires to exercise
all or any portion of the Option (the "Exercise Date"); (ii) payment
in full of the amount of the Option Exercise Price multiplied by the
number of Option Shares being purchased (the "Purchase Price") in
any manner permitted under Section 1.2(c) below; and (iii) a
certified or cashier's check payable to the Company in the amount of
all withholding tax obligations, if any (whether federal, state or
local), imposed on the Company by reason of the exercise of the
Option. Upon acceptance of such notice, receipt of payment in full,
and receipt of payment of all withholding tax obligations, if any,
the Company shall cause a certificate representing the shares of
Common Stock purchased to be issued and delivered to Grantee.
(c) The Purchase Price may be paid in any of the following
methods:
(i) in cash
(ii) by certified or cashier's check or money order
payable to the Company (or the equivalent thereof acceptable
to the Board of Directors);
(iii) with the consent of the Board of Directors in
its sole discretion, by personal check (subject to
collection), which may in the Board of Director's sole
discretion be deemed conditional;
(iv) at the option of the Grantee, in Common Stock
theretofore owned by the Grantee; provided; however, that if
the Grantee acquired such stock to be surrendered directly or
indirectly from the Company, he shall have owned such stock
for six months prior to using such stock to exercise this
Option and, provided, further, that such exercise transaction
shall not result in a violation of Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"). For purposes of determining the amount, if any, of the
exercise price satisfied by payment in Common Stock, such
Common Stock shall be valued at its Fair Market Value on the
date of exercise. Any Common Stock delivered in satisfaction
of all or a portion of the exercise price shall be
appropriately endorsed for transfer and assignment to the
Company; or
(v) any combination of the above.
1.3 Option Exercise Price. The price for each share of Common
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Stock for which the Option is exercised is US $3.00 (the "Option Exercise
Price").
1.4 Term and Termination of Option.
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(a) Except as otherwise provided herein, the period in which
the Option may be exercised as to any Vested Shares (the "Option
Period") shall commence on the date such shares become Vested Shares
and terminate at 5:00 p.m. Eastern Time on the date of the first to
occur of the following events:
(i) March 4, 2001;
(ii) If Grantee ceases to be a Director of the Company
for any reason other than as provided in paragraph (iii) or
(iv) below, the Option shall lapse, unless it is previously
exercised, thirty (30) days after Grantee's position as a
Director of the Company terminates.
(iii) If Grantee ceases to be a Director of the
Company by reason of his mental or physical disability
determined by a medical doctor satisfactory to the Company,
the Option shall lapse, unless it is previously exercised,
within one year after the date that the Grantee's position as
a Director of the Company terminates.
(iv) If Grantee dies while serving as a Director, or
during the 30-day period described in paragraph (ii) and
before the Option otherwise lapses, the Option shall lapse one
year after Grantee's death. Upon Grantee's death, any
exercisable Options may be exercised by Grantee's legal
representative or representatives, by the person or persons
entitled to do so under Grantee's last will and testament, or,
if Grantee shall fail to make testamentary disposition of such
Option or shall die intestate, by the person or persons
entitled to receive such Option under the applicable laws of
descent and distribution.
If Grantee exercises the Option after the Grantee's position
as a Director terminates, the Option may be exercised only with
respect to the shares that were otherwise vested on the date that
the Grantee's position as a Director of the Company terminates.
Upon the expiration of the Option Period, this Option, and all
unexercised rights granted to Grantee hereunder, shall terminate as
to all Vested Shares to which the Option Period relates, and
thereafter be null and void.
(b) The Board of Directors of the Company in its sole
discretion may, by giving written notice to the Grantee
("Cancellation Notice"), cancel, effective upon the date of a Change
in Control, any portion of the Option that remains unexercised on
such date. Such Cancellation Notice shall be given to the Grantee
at least ten (10) days prior to the date of cancellation.
1.5 No Rights as Stockholder. Grantee shall have no rights as a
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stockholder with respect to any Option Shares until the issuance of a
stock certificate to him for such shares. Except as otherwise provided
in Section 1.6 below, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date
is prior to the date such stock certificate is issued.
1.6 Changes in Capitalization.
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(a) If at any time there shall be an increase or decrease in
the number of issued an outstanding shares of Common Stock of the
Company, through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or
exchange of shares of Common Stock, then appropriate proportional
adjustment shall be made in the number of Option Shares (and, with
respect to the Option Shares, the Option Exercise Price) subject to
this Option still outstanding.
(b) In the event of a merger, consolidation or other
reorganization of the Company under the terms of which the Company
is not the surviving corporation, but the surviving corporation
elects to assume this Option, the Grantee shall be entitled to
receive, upon the exercise of the Option, with respect to each
Option Share: (i) the number of shares of stock of the surviving
corporation (or equity interest in any other entity); and (ii) any
other notes, evidences of indebtedness or other property, that the
Grantee would have received in connection with such merger,
consolidation or other reorganization had he exercised the Option
immediately prior to such merger, consolidation or other
reorganization.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class
or securities convertible into shares of capital stock of any class,
either in connection with direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, shall not affect and no adjustment by reason thereof
shall be made with respect to, the number of Option Shares then
outstanding or the Option Exercise Price.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options under this Agreement shall not
affect in any manner the right or power of the Company to make,
authorize or consummate: (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business; (ii) any merger or consolidation
of the Company; (iii) any issuance by the Company of debt securities
or preferred stock that would rank above the Option Shares subject
to outstanding Options; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any
part of the assets or business of the Company; or (vi) any other
corporate act or proceeding, whether of a similar character or
otherwise.
ARTICLE 2
RESTRICTION ON TRANSFER OF OPTION
The Option evidenced hereby is not assignable or otherwise
transferable, except to members of the Grantee's immediate family or by
will or the laws of descent and distribution.
ARTICLE 3
LEGENDS
3.1 Legends. Each certificate representing the Option Shares
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purchased upon exercise of this Option shall be endorsed with the
following legend and Grantee shall not make any transfer of the Option
Shares without first complying with the restrictions on transfer
described in such legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE IS
AN EFFECTIVE REGISTRATION UNDER SUCH ACT COVERING SUCH SECURITIES,
(2) THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 PROMULGATED
UNDER SUCH ACT, OR (3) THE ISSUER RECEIVES AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT.
THE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON ONE OR MORE
EXEMPTIONS FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER SUCH LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH LAWS.
Grantee agrees that the Company may also endorse any other legends
required by applicable federal or state securities laws.
The Company shall not be required to transfer on its books any
Option Shares that have been sold or transferred in violation of the
provisions of this Agreement (including the foregoing legends).
3.2 Removal of Legend and Transfer Restrictions.
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(a) Any legend endorsed on a certificate pursuant to Section
3.1 hereof and the stop transfer instructions with respect to the
Option Shares shall be removed and the Company shall issue a
certificate without such legend to the holder thereof if such Option
Shares are registered under the Securities Act of 1933, as amended
(the "Securities Act") and a prospectus meeting the requirements of
Section 10 of the Securities Act is available.
(b) The restrictions described in the second sentence of the
legend set forth in Section 3.1 hereof may be removed at such time
as permitted by Rule 144 promulgated under the Securities Act.
ARTICLE 4
PURCHASE FOR INVESTMENT
As a condition of any issuance of a stock certificate for the Option
Shares, the Board of Directors may obtain such agreements or
undertakings, if any, as it may deem necessary or advisable to assure
compliance with any provision of this Agreement or any law or regulation,
including, but not limited to, the following:
(a) a representation and warranty by the Grantee to the
Company, at the time this Option is exercised, that the Grantee is
acquiring the Option Shares to be issued to him for investment and
not with a view to, or for sale in connection with, the distribution
of any such Option Shares; and
(b) a representation, warranty or agreement to be bound by any
legends that are, in the opinion of the Board of Directors,
necessary or appropriate to comply with the provisions of any
securities law deemed by the Board to be applicable to the issuance
of the Option Shares and are endorsed upon the certificates
representing the Option Shares.
ARTICLE 5
GENERAL PROVISIONS
5.1 Governing Laws. This Agreement shall be construed,
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administered and enforced according to the laws of the State of Georgia.
5.2 Successors. This Agreement shall be binding upon and inure to
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the benefit of the heirs, legal representatives, successors, and
permitted assigns of the parties.
5.3 Notice. Except as otherwise specified herein, all notices and
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other communications under this Agreement shall be in writing and shall
be deemed to have been given if personally delivered, if mailed by
overnight delivery or if sent by registered
or certified United States mail, return receipt requested, postage
prepaid, addressed to the proposed recipient at the last known address of
the recipient. In each case, each notice or other communication shall be
deemed to have been received on the earlier of the date of actual receipt
or the date that is three (3) days after the date on which such notice or
other communication was mailed or sent. Any party may designate any other
address to which notices shall be sent by giving notice of the address to
the other parties in the same manner as provided herein.
5.4 Severability. In the event that any one or more of the
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provisions or portion thereof contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect,
the same shall not invalidate or otherwise affect any other provisions of
this Agreement, and this Agreement shall be construed as if the invalid,
illegal or unenforceable provision or portion thereof had never been
contained herein.
5.5 Entire Agreement. This Agreement expresses the entire
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understanding and agreement of the parties with respect to the subject
matter hereof. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
5.6 Violation. Except as provided herein, any transfer, pledge,
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sale, assignment, or hypothecation of the Option or any portion thereof
or of any Option Shares issued upon exercise hereof shall be a violation
of the terms of this Agreement and shall be void and without effect.
5.7 Headings. Paragraph headings used herein are for convenience
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of reference only and shall not be considered in construing this
Agreement.
5.8 Specific Performance. In the event of any actual or threatened
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default in, or breach of, any of the terms, conditions and provisions of
this Agreement, the party or parties who are thereby aggrieved shall have
the right to specific performance and injunction in addition to any and
all other rights and remedies at law or in equity, and all such rights
and remedies shall be cumulative.
5.9 No Rights to Continued Directorship. The grant of the Option
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hereunder shall not be construed as giving Grantee the right to continue
to serve as a Director of the Company or any Affiliate of the Company.
5.10 Certain Definitions. The capitalized terms listed below are
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used herein with the meaning thereafter ascribed:
(a) "Change of Control" shall be deemed to have occurred if
(i) a tender offer shall be made and consummated for the ownership
of 25% or more of the outstanding voting securities of the Company,
(ii) the Company shall be merged or consolidated with another
corporation and as a result of such merger or consolidation less
than 50% of the outstanding voting securities of the surviving
or resulting corporation shall be owned in the aggregate by the
former shareholders of the Company, (iii) the Company shall sell at
least 75% of its assets by value in a single transaction or in a
series of transactions to another corporation which is not a wholly-
owned subsidiary of the Company, or (iv) a person, within the
meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on
the date hereof) of the Exchange Act, shall acquire 50% or more of
the outstanding voting securities of the Company(whether directly,
indirectly, beneficially or of record). For purposes hereof,
ownership of voting securities shall take into account and shall
include ownership as determined by applying the provisions of Rule
13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the
Exchange Act.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Common Stock" means the Class A Common Stock, no par
value per share, of the Company.
IN WITNESS WHEREOF, the parties have executed and sealed this
Agreement on the day and year first set forth above.
HARRY'S FARMERS MARKET, INC.
By: /s/ Xxxxx X. Blazer
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Xxxxx X. Blazer
Title: President
GRANTEE:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
EXHIBIT A
TO
XXXXXX X. XXXXXXXX
NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
HARRY'S FARMERS MARKET, INC.
Notice of Exercise
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Name _____________________________
Address __________________________
__________________________________
Date _____________________________
Harry's Farmers Market, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Re: Exercise of Stock Option
Gentlemen:
I hereby give notice of my election to exercise options granted to
me to purchase ________ shares of Class A common stock (the "Common
Stock") of Harry's Farmers Market, Inc. (the "Company") under the Xxxxxx
X. Xxxxxxxx Non-Employee Director Non-Qualified Stock Option Agreement
dated January 29, 1997 (the "Agreement"). The purchase shall take place
as of ___________ (the "Exercise Date").
On or before the Exercise Date, I will present you with proper
payment in the form of _______________________ for $__________ for the
full purchase price payable to the order of the Company.
I hereby represent, warrant, covenant, and agree with the Company as
follows:
The shares of the Common Stock being acquired by me will be
acquired for my own account without the participation of any other
person, with the intent of holding the Common Stock for investment
and without the intent of participating, directly or indirectly, in
a distribution of the Common Stock and not with a view to, or for
resale in connection with, any distribution of the Common Stock, nor
am I aware of the existence of any distribution of the Common Stock;
I am not acquiring the Common Stock based upon any
representation, oral or written, by any person with respect to the
future value of, or income from, the
Exhibit A to Non-Qualified Stock Option Agreement - Page 1
Common Stock but rather upon an independent examination and judgment
as to the prospects of the Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of
any offers made to other persons by such means;
I am able to bear the economic risks of the investment in the
Common Stock including the risk of a complete loss of my investment
therein;
I understand and agree that the Common Stock will be issued
and sold to me without registration under any state law relating to
the registration of securities for sale, and will be issued and sold
in reliance on the exemptions from registration under the Securities
Act of 1933 (the "1933 Act"), provided by Sections 3(b) and/or 4(2)
thereof and the rules and regulations promulgated thereunder;
The Common Stock cannot be offered for sale, sold or
transferred by me other than pursuant to: (A) an effective
registration under the 1933 Act or in a transaction, otherwise in
compliance with the 1933 Act; and (B) evidence satisfactory to the
Company of compliance with the applicable securities laws of other
jurisdictions. The Company shall be entitled to rely upon an
opinion of counsel satisfactory to it with respect to compliance
with the above laws;
The Company will be under no obligation to register the Common
Stock or comply with any exemption available for sale of the Common
Stock without registration or filing, and the information or
conditions necessary to permit routine sale of securities of the
Company under Rule 144 of the 1933 Act are not now available and no
assurance has been given that it or they will become available. The
Company is under no obligation to act in any manner so as to make
Rule 144 available with respect to the Common Stock;
I have and have had complete access to and the opportunity to
review and make copies of all material documents related to the
business of the Company, including, but not limited to, contracts,
financial statements, tax returns, leases, deeds and other books and
records. I have examined such of these documents as I wished and am
familiar with the business and affairs of the Company. I realize
that purchase of the Common Stock is a speculative investment and
that any possible profit therefrom is uncertain;
I have had the opportunity to ask questions of and receive
answers from the Company and any person acting on its behalf and to
obtain all material informal reasonably available with respect to
the Company and its affairs. I have received all information and
data with respect to the Company which I have requested and which I
have deemed relevant in connection with the evaluation of the merits
and risks of investment in the Company;
Exhibit A to Non-Qualified Stock Option Agreement - Page 2
I have such knowledge and experience in financial and business
matters that I am capable of evaluating the merits and risks of the
purchase of the Common Stock hereunder and I am able to bear the
economic risk of such purchase; and
The agreements, representations, warranties, and covenants
made by me herein extend to and apply to all of the Common Stock of
the Company issued to me pursuant to this Option. Acceptance by me
of the certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations,
warranties, and covenants made herein shall be true and correct at
that time.
I understand that the certificates representing the shares being
purchased by me in accordance with this notice shall bear a legend
referring to the foregoing covenants, representations and warranties and
restrictions on transfer, and I agree that a legend to that effect may be
placed on any certificate which may be issued to me as a substitute for
the certificates being acquired by me in accordance with this notice.
Very truly yours,
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AGREED TO AND ACCEPTED:
HARRY'S FARMERS MARKET, INC.
By: ________________________
Title: _____________________
Number of Shares
Exercised: _________________
Number of Shares
Remaining: _________________ Date: ____________________
Exhibit A to Non-Qualified Stock Option Agreement - Page 3
SCHEDULE 1
to Harry's Farmers Market, Inc.
Non-Qualified Stock Option Agreement
with Xxxxxx X. Xxxxxxxx
for 50,000 Shares
Vesting Schedule
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NO. OF OPTION SHARES VESTED NO. OF OPTION SHARES
VESTING DATE ON THE VESTING DATE CUMULATIVELY VESTED
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Grant Date 50,000 50,000
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