EXHIBIT 4.1
JUST FOR FEET, INC.
INCENTIVE STOCK OPTION AGREEMENT
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THIS INCENTIVE STOCK OPTION AGREEMENT ("Option Agreement") is made and
entered into this ____ day of ___________, 199__ by and between Just For Feet,
Inc., an Alabama corporation (the "Company") and __________ ("Employee").
W I T N E S S E T H:
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The Board of Directors of the Company has adopted the Just For Feet, Inc.
1997 Employee Incentive Plan (the "Plan"), a copy of which is attached hereto as
Exhibit "A" and incorporated herein by reference. Pursuant to the terms of the
Plan, the Board of Directors or its designated committee has selected Employee
to participate in the Plan and desires to grant to Employee certain incentive
stock options to purchase shares of the Company's authorized $.0001 par value
common stock ("Stock"), subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual promises, agreements and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all respects
in a manner which is consistent with the terms of the Plan, the provisions of
which are hereby incorporated by reference into this Option Agreement and a copy
of which is on file with the Secretary of the Company. Employee acknowledges
receipt of a copy of the Plan prior to the execution of this Agreement. Unless
specifically provided otherwise, all terms used in this Option Agreement shall
have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Employee is hereby granted a stock option to purchase _______________ shares
of Stock, effective as of the date first written above. This stock option is
intended to be an Incentive Stock Option as provided in (S) 422 of the Internal
Revenue Code.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is ____________.
4. OPTION PRICE
The Board of Directors has determined that the price for each share of Stock
purchased under this Option Agreement shall be ____________ (the "Option
Price").
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall expire
(to the extent not previously fully exercised) upon the first to occur of the
following:
(a) ____________ (the tenth anniversary of the date of grant of the
option, or the fifth anniversary in the case of a Ten Percent Owner);
(b) As to any option or unexercised portion thereof which was otherwise
exercisable on the date of termination of Employment;
(i) The date which is three (3) months following the date on which
Employee ceases his employment with the Company or any subsidiary
of the Company, otherwise than as a result of Employee's death or
Disability or if Employee's employment is terminated for Cause (as
hereinafter defined).
(ii) The date which is the first anniversary of the date upon which
Employee ceases to be employed by the Company, or any subsidiary
of the Company, by reason of Employee's death or Disability but in
no event after the date provided in paragraph (a) of this
Article 5;
(iii) The date of termination of employment if Employee is terminated
for Cause.
For the purposes of this Agreement, Cause shall mean (i) the
commission of a felony or any act of fraud, theft, embezzlement,
dishonesty, misappropriation or moral turpitude (as hereafter
defined) on the part of the Employee, (ii) a willful failure by
the Employee to comply with any laws or regulations relating to
his employment with the Corporation (as hereinafter defined in
Section 8(a)), (iii) a material breach by the Employee of, or a
material failure by the Employee to perform, his duties and
obligations as an Employee of the Corporation, (iv) substantial
dependance or addiction to alcohol or any drug, (v) wilful
dereliction of duties or disregard of lawful instructions or
directions of the officers or directors of the Corporation
relating to a material matter, (vi) conduct disloyal to the
Corporation, or (vii) a failure by Employee to cease and desist
conducting activities prohibited by the rules and regulations of
the Company after an oral or written request by the Corporation to
so cease and desist. For purposes of this Agreement, "moral
turpitude" shall mean an act of baseness, vileness, or depravity
in the private and social duties which a person owes to another,
or to society in general, contrary to the accepted and customary
rule of right and duty between people.
(c) As to any options or portion thereof that were not exercisable on the
date Employee ceases Employment with the Corporation by reason of death
or Disability, the date which is six (6) months following such
termination but in no event after the date provided in paragraph (a) of
this Article 5.
6. EXERCISE OF OPTION
Unless options hereunder shall earlier lapse or expire pursuant to Article 5
hereof, this option may be exercised, subject to the limitations contained in
the second paragraph of this Article 6, with respect to the aggregate number of
shares subject to this Option Agreement as follows:
(i) as of ______________, 199__, _________ shares;
(ii) as of ______________, 199__, an additional _________ shares; and
(iii) as of ______________, 199__, an additional _________ shares.
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To the extent such options become exercisable in accordance with the
foregoing, Employee may exercise this stock option, in whole or part, from time
to time. The option exercise price may be paid by Employee either in cash, or by
surrender of other shares of unrestricted Stock of the Company held by Employee
for at least six months or a combination of cash and Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary of the
Company by specifying the number of shares to be purchased and signed by
Employee or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than Employee,
such person shall also provide such other information and documentation as the
Secretary of the Company may reasonably require to assure that such person is
entitled to acquire Stock under the terms of the Plan and this Option Agreement.
After receipt of the notice and any other assurances requested by the
Company under this Article 7, and upon receipt of the full option price, the
Company shall issue to the person giving notice of exercise under this Option
Agreement the number of shares specified in such notice.
8. COVENANT NOT TO COMPETE
In consideration of the grant by the Company of the option, Employee agrees
with the Company as follows:
(a) While Employee is employed by the Company, or one or more of the
subsidiaries (hereinafter collectively referred to as "the Corporation")
Employee will devote his entire time, energy and skills to the service
of the Corporation. Such employment shall be at the pleasure of the
board of directors of each employing corporation. Except as provided in
Section 5 hereof, no option granted under this Agreement shall be
exercised after the termination of Employee's employment with the
Corporation.
(b) Employee will not, during the term of his employment with the
Corporation and for a period of one (1) year after termination for any
reason of his employment with the Corporation, directly or indirectly,
engage in or carry on within a fifty (50) mile radius of any of the
Corporation's retail outlets existing upon the date of termination of
such employment, any business, like or similar to that engaged in by
Corporation, either individually or as a stockholder, director, officer,
consultant, independent contractor, employee, agent, member or otherwise
of or through any corporation, partnership, association, joint venture,
firm, individual or otherwise (hereinafter "Firm"), or in any other
capacity.
The above one (1) year period shall be extended by any period of time during
which Employee is in default of the covenants contained in this Agreement.
(c) During the term of his employment with the Corporation and thereafter,
Employee shall not divulge, or furnish or make accessible to any third
party, company, corporation or other organization (including but not
limited to customers, competitors or governmental agencies), without the
Corporation's prior written consent, any trade secrets, customer lists,
information regarding customers, or other confidential information
concerning the Corporation or its business, including without
limitation, confidential methods of operation and organization,
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trade secrets, confidential matters related to pricing, markups,
commissions and customer lists.
(d) In the event of a breach or threatened breach by Employee of all or any
part of the provisions of subdivisions (b) or (c) of this Article 8, the
Corporation shall be entitled to an injunction restraining Employee from
such breach without limiting any other rights or remedies available to
the Corporation for such breach or threatened breach.
(e) Employee specifically recognizes and affirms that if any of the
covenants contained in subdivisions (b) or (c) of Article 8 of this
Agreement should be held or found invalid or unenforceable for any
reason whatsoever by a court of competent jurisdiction in an action
between Employee and the Corporation, the Company shall be entitled to
receive (but not obligated to acquire) from Employee all Stock held by
Employee which was obtained by Employee under this Option Agreement
(including all shares obtained by virtue of any stock dividend or
distribution, recapitalization, merger, consolidation, split-up,
combination, exchange of shares or other transaction, hereinafter "stock
dividends") by returning to Employee for each share received the Option
Price paid by Employee (as adjusted for stock dividends). If Employee
has sold, transferred, or otherwise disposed of Common Stock obtained
under this Agreement (including all shares obtained by virtue of any
stock dividends), the Company shall be entitled to receive from Employee
the difference between the Option Price paid by Employee and the fair
market value of the Common Stock (including all shares obtained by
virtue of any stock dividends) on the date of sale, transfer, or other
disposition.
(f) Notwithstanding any provision to the contrary herein contained,
Article 8(b) shall not apply:
(i) Upon the termination of the Employee's employment by the
Corporation other than for Cause within one (1) year following a
Sale of the Company; and
(ii) Upon the voluntary termination of employment by the Employee
for any reason within the thirty (30) day period immediately
after the one (1) year period following a Sale of the Company.
(g) In the event of a Sale of the Company following the execution of this
Agreement, Employee expressly agrees that the terms and conditions set
forth in this Article 8 shall be binding upon Employee and shall be
fully enforceable by the successor to the Company.
For purposes of this Agreement, "Sale of the Company" shall mean (i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (a "Person"), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either the
then outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"), or (ii) consummation by the Company of a
reorganization, merger or consolidation, or sale or other disposition of all or
substantially all of the assets of the Company; unless, following such
acquisition of beneficial ownership or transaction (A) more than 60% of the then
outstanding shares of common stock of the Person resulting from such
reorganization, merger or consolidation, or (B) more than 60% of the then
outstanding shares of common stock of the Person acquiring such beneficial
ownership or assets, and the combined voting power of the then outstanding
voting securities of such Person
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entitled to vote generally in the election of directors of such Person, is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of
Outstanding Common Stock and Outstanding Voting Securities immediately prior to
such acquisition or transaction, in substantially the same proportion as their
ownership of Outstanding Common Stock and Outstanding Voting Securities prior to
such event.
9. PLAN TO CONTROL
The Plan is incorporated in this Agreement by this reference. Any question
of interpretation or application of the Plan or this Agreement shall be resolved
by the Board of Directors or the Committee, and its determination shall be final
and binding on the Company and Employee. In the event of any conflict between
the provisions of the Plan and of this Agreement, the Plan shall control.
10. BINDING EFFECT
This Agreement shall bind and inure to the benefit of the parties hereto,
the successors and assigns of the Company and the person to whom the rights of
Employee are transferred by will or the laws of descent and distribution.
11. RESTRICTIONS ON TRANSFERABILITY
(a) The stock option granted hereunder shall not be transferable by Employee
otherwise than by will or by the laws of descent and distribution, and such
stock option shall be exercisable during Employee's lifetime only by Employee.
(b) Pursuant to Section 5(h) of the Plan, the shares of stock purchased by
Employee pursuant to the exercise of the options hereunder are not transferable
by Employee until the expiration of sixty (60) days from the transfer of shares
to Employee upon the exercise of this option, and any attempt by Employee to
transfer such shares prior to the latter of such dates may result in the
repurchase of such shares by the Company as provided in that section of the
Plan.
12. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
Employee acknowledges and understands that the Stock subject to this Option
Agreement is not registered under the federal Securities Act of 1933, as amended
("Federal Act") or under the Alabama Securities Act or the securities laws of
any other state (the "State Acts"). Each option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such option or the issue or purchase of shares thereunder, such option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors. The costs of any such
listing, registration, qualification, consent or approval shall be paid by the
Company. Alternatively, the Company shall not permit any exercise of this stock
option unless it receives such representations, factual assurances, and legal
opinions as it may deem necessary to determine and document the availability of
an exemption from registration under both the Federal Act and the State Acts
with respect to any particular issuance of shares under this Option Agreement.
Further, the Board of Directors shall require that Stock issued in respect of
any exercise of this stock option shall bear such restrictions on further
transfer as shall be necessary to insure the availability of any exemption so
claimed.
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13. REORGANIZATION
In the event that dividends are payable in Common Stock of the Company or in
the event there are subdivisions or consolidations of shares of Common Stock of
the Company or in the event of any other increase or decrease in the number of
issued shares of the Company without receipt of consideration by the Company,
the number of shares deliverable upon the exercise thereafter of any Option
theretofore granted and the exercise price with respect to such Option shall
each be increased or decreased proportionately, as the case may be, without
change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or in the case of the sale of all
or substantially all of the assets of the Company, or in case of a dissolution
or liquidation of the Company, or in the case of a sale or exchange of eighty
percent (80%) or more of the outstanding stock of the Company by the
shareholders of the Company, the Board of Directors of the Company or its
designated committee shall upon written notice to the Optionee provide that the
Option (including the shares not then exercisable) must be exercised within
thirty (30) days of the date of such notice or it will be terminated.
Notwithstanding anything in this Option Agreement or the Plan to the contrary,
nothing shall extend Optionee's right to exercise this Option after the
expiration of ten (10) years from the date it is granted.
14. GOVERNING LAW
This Option Agreement shall be interpreted and construed according to and
governed by the laws of the State of Alabama.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or the Committee or a duly
authorized officer of the Company, and Employee has executed this Option
Agreement as of the date first written above.
JUST FOR FEET, INC.
By:
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Xxxxxx Xxxxxxxxxx, President
Attest:
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Xxxxx Xxxxx, Secretary
EMPLOYEE
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Employee
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