EXHIBIT 10.6
MACHEEZMO MOUSE RESTAURANTS, INC.
STOCK OPTION AGREEMENT
Non-Statutory Stock Option
This STOCK OPTION AGREEMENT is made between MACHEEZMO MOUSE RESTAURANTS,
INC., an Oregon corporation (the "Company"), and ________________ (the
"Optionee"), pursuant to the Company's 1996 Stock Incentive Plan (the "Plan").
The Company and the Optionee agree as follows:
1. OPTION GRANT. The Company hereby grants to the Optionee on the terms
and conditions of this Agreement the right and the option (the "Option") to
purchase all or any part of _________ shares of the Company's Common Stock at a
purchase price of $_____ per share. The purchase price is 100 percent or more
of the fair market value of the Company's Common Stock at the date of grant of
this Option. The terms and conditions of the Option grant set forth in attached
EXHIBIT A are hereby incorporated into and made a part of this Agreement. The
Option is NOT intended to be an Incentive Stock Option as defined in Section
422A of the Internal Revenue Code of 1986, as amended, but is intended to be a
Non-Statutory Stock Option, as defined in the Plan.
2. GRANT DATE. The Grant Date for this Option is ____________. The
Option shall continue in effect until the date ____ years after the Grant Date
(the "Expiration Date") unless earlier terminated as provided in Sections 1 or 5
of EXHIBIT A.
3. TIME OF EXERCISE OF OPTION. The Option will become exercisable as
follows:
Grant Date
and Months Percentage of Option
Following Becoming Exercisable
---------------------------------------------
Grant Date 20.0%
One through 36 2.22%
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
as of the date written above.
MACHEEZMO MOUSE OPTIONEE
RESTAURANTS, INC.
By:_________________________ ____________________________
Title:______________________ [signature]
0000 XX Xxxxxx Xxxxxx, #000 ____________________________
Xxxxxxxx, Xxxxxx 00000 [print name]
____________________________
____________________________
[address]
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MACHEEZMO MOUSE RESTAURANTS, INC.
EXHIBIT A TO STOCK OPTION AGREEMENT
1. TERMINATION OF EMPLOYMENT OR SERVICE.
1.1 Unless otherwise determined by the Board of Directors of the Company,
if the Optionee's employment by or service with the Company terminates for any
reason other than because of physical disability or death, the Option may be
exercised at any time prior to the Expiration Date or the expiration of 30 days
after the date of the termination, whichever is the shorter period, but only if
and to the extent the Optionee was entitled to exercise the Option at the date
of termination.
1.2 If the Optionee's employment by or service with the Company terminates
because of death or physical disability (as defined in Section 6(a)(iv)(B) of
the Plan), the Option may be exercised at any time prior to the Expiration Date,
but only if and to the extent the Optionee was entitled to exercise the Option
at the date of termination. If the Optionee's employment or service is
terminated by death, the Option shall be exercisable only by the person or
persons to whom the Optionee's rights under the Option pass by the Optionee's
will or by the laws of descent and distribution of the state or country of the
Optionee's domicile at the time of death.
2. METHOD OF EXERCISE OF OPTION.
2.1 Unless the Board of Directors determines otherwise, to exercise the
Option, the Optionee must give written notice to the Company stating the
Optionee's intention to exercise, specifying the number of shares as to which
the Optionee desires to exercise the Option and the date on which the Optionee
desires to complete the transaction. On or before the date specified for
completion of the purchase of shares pursuant to the Option, the Optionee must
pay the Company the full purchase price of such shares in cash. No shares shall
be issued until full payment for the shares has been made.
2.2 After exercise of all or a part of the Option, the Optionee shall
immediately upon notification of the amount due, if any, pay to the Company in
cash the amount necessary to satisfy any applicable federal, state and local tax
withholding requirements. If additional withholding is or becomes required
beyond any amount deposited before delivery of the certificates for the Option
shares, the Optionee shall pay such amount to the Company on demand. If the
Optionee fails to pay the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the Optionee, including salary or
compensation, subject to applicable law.
3. NONTRANSFERABILITY OF OPTION. The Option may not be assigned or
transferred by the Optionee, either voluntarily or by operation of law, except
by will or by the laws of descent and distribution of the state or country of
the Optionee's domicile at the time of death.
4. CHANGES IN CAPITAL STRUCTURE.
4.1 STOCK SPLITS; STOCK DIVIDENDS. If the outstanding Common Stock of the
Company is hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company by reason
of any stock split, combination of shares or dividend payable in shares,
recapitalization or reclassification appropriate adjustment shall be made by the
Board of Directors in the number and kind of shares as to which the Option, or
portions thereof then unexercised, shall be exercisable. Adjustments shall be
made without change in the total price applicable to the unexercised portion of
the Option and with a corresponding adjustment in the Option price per share and
shall neither (i) make the ratio, immediately after the event, of the Option
price per share to the fair market value per share more favorable to the
Optionee than that ratio immediately before the event nor (ii) make the
aggregate spread, immediately after the event, between the fair market value of
shares as to which the Option is exercisable and the Option price of such shares
more favorable to the Optionee than that aggregate spread immediately before the
event. The Board of Directors shall have no obligation to effect any adjustment
that would or might result in the issuance of fractional shares, and any
fractional shares resulting from any adjustment may be disregarded or provided
for in any manner determined by the Board of Directors. Any such adjustments
made by the Board of Directors shall be conclusive.
4.2 MERGERS, REORGANIZATIONS, ETC. In the event of a merger,
consolidation or plan of exchange to which the Company is a party or a sale of
all or substantially all of the Company's assets (each, a
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"Transaction"), the Board of Directors shall, in its sole discretion and to the
extent possible under the structure of the Transaction, select one of the
following alternatives for treating the Option:
4.2-1 The Option shall remain in effect in accordance with its terms.
4.2-2 The Option shall be converted into an option to purchase stock
in the corporation that is the surviving or acquiring corporation in the
Transaction. The amount, type of securities subject thereto and exercise
price of the converted option shall be determined by the Board of Directors
of the Company, taking into account the relative values of the companies
involved in the Transaction and the exchange rate, if any, used in
determining shares of the surviving corporation to be issued to holders of
shares of the Company. Conversions shall be made without change in the
total price applicable to the unexercised portion of the Option and with a
corresponding adjustment in the Option price per share and shall neither
(i) make the ratio, immediately after the event, of the Option price per
share to the fair market value per share more favorable to the Optionee
than that ratio immediately before the event nor (ii) make the aggregate
spread, immediately after the event, between the fair market value of
shares as to which the Option is exercisable and the Option price of such
shares more favorable to the Optionee than that aggregate spread
immediately before the event. Unless otherwise determined by the Board of
Directors, the converted option shall be exercisable only to the extent
that the exercisability requirements relating to the Option have been
satisfied.
4.2-3 The Board of Directors shall provide a 30-day period prior to
the consummation of the Transaction during which the Option may be
exercised to the extent then exercisable, and, upon the expiration of such
30-day period, the Option shall immediately terminate to the extent not
exercised. The Board of Directors may, in its sole discretion, accelerate
the exercisability of the Option so that it is exercisable in full during
such 30-day period.
4.3 DISSOLUTION OF THE COMPANY. In the event of the dissolution of the
Company, options shall be treated in accordance with paragraph 4.2-3.
5. CONDITIONS ON OBLIGATIONS. The Company shall not be obligated to issue
shares of Common Stock upon exercise of the Option if the Company is advised by
its legal counsel that such issuance would violate applicable state or federal
laws, including securities laws. The Company will use its best efforts to take
steps required by state or federal law or applicable regulations in connection
with issuance of shares upon exercise of the Option.
6. NO RIGHT TO EMPLOYMENT OR SERVICE. Nothing in the Plan or this Agreement
shall (i) confer upon the Optionee any right to be employed or to continue in
the employment of or service to the Company; (ii) interfere in any way with the
right of the Company to terminate the Optionee's employment or service with the
Company at any time for any reason, with or without cause, or to decrease the
Optionee's compensation or benefits, or (iii) confer upon the Optionee any right
to continuation, extension, renewal, or modification of any compensation,
contract or arrangement with or by the Company.
7. WITHHOLDING. Upon notification of the amount due, if any, and prior to or
concurrently with delivery of the certificates representing the shares for which
the Option was exercised, Optionee shall pay to the Company amounts necessary to
satisfy any applicable federal, state, and local withholding tax requirements.
If additional withholding becomes required beyond any amount deposited before
delivery of the certificates, Optionee shall pay such amount to the Company on
demand. If Optionee fails to pay any amount demanded, the Company shall have
the right to withhold that amount from other amounts payable by the Company to
Optionee, including salary, subject to applicable law.
8. SUCCESSORS OF COMPANY. This Agreement shall be binding upon and shall
inure to the benefit of any successor of the Company but, except as provided
herein, the Option may not be assigned or otherwise transferred by the Optionee.
9. NOTICES. Any notices under this Agreement must be in writing and will be
effective when actually delivered or, if mailed, three days after deposit into
the United States mails by registered or certified mail, postage prepaid. Mail
shall be directed to the addresses stated on the face page of this Agreement or
to such address as a party may certify by notice to the other party.
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