EXHIBIT 10.33
AMERICA'S FAVORITE CHICKEN COMPANY
NONQUALIFIED STOCK OPTION AGREEMENT - EXECUTIVE
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is entered
into as of ________________, 1996 by and between America's Favorite Chicken
Company, a Minnesota corporation (the "Company"), and ____________ ("Optionee")
pursuant to the Company's 1996 Nonqualified Stock Option Plan dated
_____________, 1996 (the "Plan").
R E C I T A L S:
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A. Optionee is an employee of the Company and/or of a direct or
indirect subsidiary of the Company (individually, a "Subsidiary," and
collectively, the "Subsidiaries") and the Company considers it desirable to give
Optionee an added incentive to advance the Company's interests.
B. The Company has determined to grant Optionee the right to
purchase certain stock of the Company pursuant to the terms and conditions of
this Agreement.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the covenants hereinafter set
forth, and pursuant to the authority granted to the Committee (as defined in the
Plan) by the Board of Directors of the Company, the parties agree as follows:
1. Option; Number of Shares; Price. The Company hereby grants to
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Optionee the right (the "Option") to purchase up to a maximum of _______ shares
(the "Shares") of the Common Stock, $0.01 par value per share, of the Company
(the "Common Stock"), at a purchase price of $3.317 per share (the "Option
Price"), to be paid in accordance with Section 6 hereof. The Option and the
right to purchase all or any portion of the Shares is subject to the terms and
conditions stated in this Agreement and in the Plan, including, without
limitation, the provisions of Sections 4 and 11 of the Plan under which the
Option shall be subject to modification and Sections 14(b) and 15 of the Plan
and Sections 3 and 4 hereof pursuant to which the Option is subject to
acceleration and/or termination. It is intended that the Option will not
qualify for treatment as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Exercisability. Subject to Section 3 below, the Option shall
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become exercisable as provided on Schedule A hereto.
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3. Term of Agreement. Except for the rights conferred upon the
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Company pursuant to Section 7 below, the Option, and Optionee's right to
exercise the Option, shall terminate when the first of the following occurs:
(a) termination pursuant to Section 14(b) or Section 15 of the
Plan;
(b) the expiration of seven (7) years from the date hereof;
(c) 45 days after the date of termination of Optionee's
employment or other relationship with the Company and all of the Subsidiaries,
unless such termination results from Optionee's death or disability (within the
meaning of Section 22(e)(3) of the Code) or Optionee dies within 30 days after
the date of termination (other than for cause) of Optionee's employment or other
relationship with the Company and all of the Subsidiaries;
(d) 180 days after the date of termination of Optionee's
employment or other relationship with the Company and all of the Subsidiaries,
if such termination results from Optionee's death or disability (within the
meaning of Section 22(e)(3) of the Code) or Optionee dies within 30 days after
the date of termination (other than for cause) of Optionee's employment or other
relationship with the Company and all of the Subsidiaries; or
(e) on the date of termination of Optionee's employment or other
relationship with the Company and all of the Subsidiaries, if such termination
was for cause (as determined in good faith by the Board of Directors of the
Company (the "Board")).
4. Termination of Employment or Other Relationship. The termination
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for any reason of Optionee's employment or other relationship with the Company
and all of the Subsidiaries shall not accelerate the time at with the Option
becomes exercisable or affect the number of Shares with respect to which the
Option may be exercised. The Option may only be exercised with respect to that
number of Shares which could have been purchased under the Option had the Option
been exercised by Optionee on the date of such termination.
5. Death of Optionee; No Assignment. The rights of Optionee under
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this Agreement may not be assigned or transferred except by will or 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, a designee of
Optionee, or if Optionee has not designated anyone, his or her legal
representative, may exercise the Option on behalf of Optionee (provided the
Option would have been exercisable by Optionee) until the right to exercise the
Option expires pursuant to Section 3 hereof. Any attempt to sell, pledge,
assign, hypothecate, transfer or otherwise dispose of the Option in
contravention of this Agreement or the Plan shall be void and shall have no
effect. If Optionee should die while Optionee is engaged in an employment or
other relationship with the Company and/or any Subsidiary, and provided
Optionee's rights hereunder shall have become exercisable, in whole or in part,
pursuant to Section 2 hereof, Optionee's legal representative, Optionee's
legatee or the person who acquired the right to exercise the Option 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 Option.
6. Exercise of Option. On or after time at which the Option becomes
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exercisable in accordance with Section 2 hereof and until termination of the
Option in accordance with Section 3 hereof, the Option may be exercised by
Optionee (or such other person specified in Section 5 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
and states the number of Shares (which may not be less than 100, or all of the
Shares if less than 100 Shares then remain covered by the Option) then being
purchased;
(b) a check, cash or any combination thereof in the amount of the
Option Price (or payment of the aggregate Option Price in such other form of
lawful consideration as the Committee may approve from time to time under the
provisions of Section 8 of the Plan) or payment of the Option Price by (i) the
assignment and transfer by Optionee to the Company of outstanding shares of
Common Stock theretofore held by Optionee or (ii) the surrender of that number
of exercisable Options necessary (based on the amount that the aggregate fair
market value of the Shares covered by the Options being surrendered exceeds the
aggregate Option Price with respect to such Shares), to pay the Option Price
with respect to those Options being exercised. Such shares of Common Stock
delivered or Shares covered by
2.
Options surrendered in payment of the Option Price shall be valued at fair
market value as determined by the Committee in good faith, which determination
shall be final, conclusive and binding;
(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 Option
(unless the Optionee elects to pay such tax by reducing the number of shares of
Common Stock issued upon exercise of the Option (for which purpose such shares
shall be valued at fair market value as determined in good faith by the
Committee, which determination shall be final, conclusive and binding) or 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 or any Subsidiary, provided any arrangement set forth in this
parenthetical shall satisfy the requirements of applicable tax laws); and
(d) a written representation and undertaking, if requested by the
Company pursuant to Section 8(b) hereof, in such form and substance as the
Company may require, setting forth the investment intent of Optionee, or a
Successor, as the case may be, and such other agreements, representations and
undertakings as described in the Plan.
7. Repurchase Option Upon Termination. In the event that Optionee's
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employment or other relationship with the Company and all of the Subsidiaries
terminates for any reason on or prior to the fifth anniversary of the date of
grant of this Option (including, without limitation, by reason of Optionee's
death, disability, retirement, voluntary resignation or dismissal by the Company
or any of its Subsidiaries, with or without cause), the Company shall have the
option (the "Repurchase Option") to purchase from Optionee all or any portion of
the Shares acquired by Optionee pursuant to this Option for a period of six
months after the effective date of such termination (the effective date of
termination is hereinafter referred to as the "Termination Date"). The purchase
price (the "Repurchase Price") for each Share to be purchased pursuant to the
Repurchase Option shall equal the greater of the Option Price and the Fair
Market Value (as hereinafter defined) thereof (subject to adjustment as set
forth herein). The "Fair Market Value" of a Share shall be the fair market
value of a Share as of the Termination Date, as determined by the Board, acting
in good faith and based upon the best available evidence, which determination
shall be final and binding. The Repurchase Price for any Shares to be purchased
pursuant to the Repurchase Option shall be increased or decreased appropriately
to reflect any distribution of Shares of capital stock or other securities of
the Company or any successor or assign of the Company which is made in respect
of, in exchange for or in substitution of the Shares by reason of any stock
dividend, stock split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. The Repurchase Option
shall be exercised by the Company by delivery to Optionee, within the six-month
period specified above, of (a) a written notice specifying the number of Shares
to be purchased and (b) a check in the amount of the Repurchase Price,
calculated as provided in this Section 7, for all Shares to be purchased. The
Repurchase Option shall terminate upon (i) the Company's initial underwritten
public offering of shares of Common Stock registered under the Securities Act of
1933, as amended, on form S-1, that results in gross proceeds to the Company in
excess of $25 million from the sale of Common Stock, or (ii) the acquisition by
any person or group (as defined in Section 13d of the Securities Act of 1934) of
beneficial ownership of more than fifty percent (50%) of the Company's then
outstanding shares of Common Stock.
8. Representations and Warranties of Optionee.
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(a) Optionee represents and warrants that the Option is being
acquired by Optionee for Optionee's personal account, for investment purposes
only, and not with a view to the distribution, resale or other disposition
thereof.
3.
(b) Optionee acknowledges that the Company may issue Shares upon
the exercise of the Option without registering such Common Stock under the
Securities Act on the basis of certain exemptions from such registration
requirement. Accordingly, Optionee agrees that Optionee's exercise of the Option
may be expressly conditioned upon Optionee's delivery to the Company of such
representations and undertakings as the Company may reasonably require in order
to secure the availability of such exemptions, including a representation that
Optionee is acquiring the Shares for investment and not with a present intention
of selling or otherwise disposing of such Shares. Optionee acknowledges that,
because Shares received upon exercise of an Option may be unregistered, Optionee
may be required to hold the Shares indefinitely unless they are subsequently
registered for resale under the Securities Act or an exemption from such
registration is available.
(c) Optionee acknowledges receipt of this Agreement granting the
Option, and the Plan, and understands that all rights and liabilities connected
with the Option are set forth herein and in the Plan.
9. No Rights as Stockholder. Optionee shall have no rights as a
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stockholder of any shares of Common Stock covered by the Option until the date
an entry evidencing such ownership is made in the stock transfer books of the
Company (the "Exercise Date"). The Company will make no adjustment for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the Exercise Date.
10. Limitation of Company's Liability for Nonissuance. The inability
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of the Company to obtain, from any regulatory body having jurisdiction,
registration, qualification or other necessary authorization, or the
unavailability of an exemption from registration or qualification obligation
deemed by the Company's counsel to be necessary for the lawful issuance and sale
of any shares of its Common Stock hereunder and under the Plan shall suspend the
Company's obligation to permit the exercise of any affected Option or to issue
any Shares thereupon and shall relieve the Company of any liability in respect
of the nonissuance or sale of such Shares as to which such requisite authority
or exemption shall not have been obtained. In the event that exercisability of
an Option shall be suspended as provided in this Section 10, the term of such
Option shall be extended until the thirtieth (30th) day after the date on which
the Company shall have given notice that such Option may be exercised; provided
that in no event may an Option be exercised after (i) the expiration, if
applicable, of the post-employment exercise periods specified in Section 3 of
this Agreement, unless Optionee shall have delivered written notice of exercise
pursuant to Section 6(a) of this Agreement prior to the date of such expiration,
or (ii) the seventh anniversary of the date of its grant.
11. This Agreement Subject to Plan. This Agreement is made under the
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provisions of the Plan and shall be interpreted in a manner consistent with it.
To the extent that any provision in this Agreement is inconsistent with the
Plan, the provisions of the Plan shall control. A copy of the Plan is available
to Optionee at the Company's principal executive offices upon request and
without charge. The good faith interpretation of the Committee of any provision
of the Plan, the Option or this Agreement, and any determination with respect
thereto or hereto by the Committee, shall be final, conclusive and binding on
all parties.
12. Restrictive Legends. Optionee hereby acknowledges that federal
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securities laws and the securities laws of the state in which Optionee resides
may require the placement of certain restrictive legends upon the Shares issued
upon exercise of the Option, and Optionee hereby consents to the placing of any
such legends upon certificates evidencing the Shares as the Company, or its
counsel, may reasonably deem necessary; provided, however, that any such legend
shall be removed when no longer applicable.
4.
13. Notices. All notices, requests and other communications
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hereunder shall be in writing and, if given by telegram, telecopy or telex,
shall be deemed to have been validly served, given or delivered when sent, if
given by personal delivery, shall be deemed to have been validly served, given
or delivered upon actual delivery and, if mailed, shall be deemed to have been
validly served, given or delivered three business days after deposit in the
United States mails, as registered or certified mail, with proper postage
prepaid and addressed to the party or parties to be notified, at the following
addresses (or such other address(es) as a party may designate for itself by like
notice):
If to the Company:
America's Favorite Chicken Company
0 Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Legal Department
If to Optionee, at the address appearing on the signature page
hereof.
14. Not an Employment or Other Agreement. Nothing contained in this
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Agreement shall confer, intend to confer or imply any rights to an employment or
other relationship or rights to a continued employment by, or rights to any
other relationship with, the Company and/or any Subsidiary in favor of Optionee
or limit the ability of the Company and/or any Subsidiary to terminate, with or
without cause, in its sole and absolute discretion, the employment of, or other
relationship with, Optionee, subject to the terms of any written employment or
other agreement to which Optionee is a party.
15. Governing Law. This Agreement shall be construed under and
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governed by the laws of the State of Delaware without regard to the conflict of
law provisions thereof.
16. Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed an original and both of which together shall be
deemed one Agreement.
17. RIGHTS IN OTHER CAPACITIES; OPTIONEE'S REVIEW OF AGREEMENT.
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(a) THIS AGREEMENT (AND THE STOCK OPTION EVIDENCED HEREBY) SHALL
NOT GIVE THE OPTIONEE ANY RIGHT TO EMPLOYMENT OR CONTINUED EMPLOYMENT BY THE
COMPANY (OR BY ANY DIRECT OR INDIRECT SUBSIDIARY OR OTHER AFFILIATE OF THE
COMPANY) AND THE COMPANY (AND ANY SUCH AFFILIATE) MAY TERMINATE OPTIONEE'S
EMPLOYMENT AND OTHERWISE DEAL WITH OPTIONEE AS AN EMPLOYEE WITHOUT REGARD TO THE
EFFECT ANY SUCH ACTION MAY HAVE ON OPTIONEE'S RIGHTS UNDER THIS AGREEMENT.
OPTIONEE REPRESENTS THAT, IF OPTIONEE AT ANY TIME ACQUIRES SHARES OF THE COMPANY
PURSUANT TO EXERCISE OF HIS OR HER OPTIONS UNDER THIS AGREEMENT, OPTIONEE WILL
BE ACQUIRING THE SHARES FOR THEIR POTENTIAL AS AN EQUITY INVESTMENT AND WITHOUT
ANY EXPECTATION UNDER SECTION 302A.751 OF THE MINNESOTA BUSINESS CORPORATION ACT
OR OTHERWISE THAT THE OWNERSHIP OF THE SHARES WILL ENTITLE OPTIONEE TO ANY
RIGHTS AS AN EMPLOYEE, OFFICER OR DIRECTOR OF THE COMPANY (OR OF ANY SUCH
SUBSIDIARY OR OTHER AFFILIATE OF THE COMPANY) THAT WOULD NOT EXIST IF OPTIONEE
WERE NOT A SHAREHOLDER. OPTIONEE FURTHER AGREES THAT NO CHANGE IN HIS OR HER
EXPECTATIONS CONCERNING EMPLOYMENT OR CONCERNING HIS OR HER PARTICIPATION AS AN
OFFICER OR DIRECTOR, IF ANY, WILL HAVE A REASONABLE BASIS UNLESS SET FORTH IN A
WRITTEN AGREEMENT EXPRESSLY GIVING OPTIONEE ADDITIONAL
5.
RIGHTS AS TO SUCH MATTERS. THE COMPANY HEREBY ADVISES OPTIONEE THAT THE COMPANY
IS GRANTING STOCK OPTIONS TO OPTIONEE IN RELIANCE ON THE FOREGOING
REPRESENTATIONS OF OPTIONEE AND IN THE EXPECTATION THAT OPTIONEE WILL NOT HAVE
ANY RIGHT TO EMPLOYMENT BY THE COMPANY (OR BY ANY DIRECT OR INDIRECT SUBSIDIARY
OR OTHER AFFILIATE OF THE COMPANY) OR TO CONTINUE TO BE AN OFFICER OR DIRECTOR
OF THE COMPANY (OR OF ANY SUCH SUBSIDIARY OR OTHER AFFILIATE) BY VIRTUE OF
OPTIONEE'S OWNERSHIP OF ANY SHARES, AND THAT THE COMPANY WOULD NOT GRANT THE
OPTION OR ISSUE SHARES TO OPTIONEE IF OPTIONEE HAD ANY CONTRARY EXPECTATIONS.
(b) OPTIONEE CONFIRMS THAT OPTIONEE HAS CAREFULLY REVIEWED THIS
AGREEMENT AND UNDERSTANDS IT.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement as of the date first above written.
THE COMPANY:
AMERICA'S FAVORITE CHICKEN COMPANY
By: ___________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
OPTIONEE:
________________________________
ADDRESS:
________________________________
________________________________
________________________________
6.
Schedule A
SCHEDULE OF EXERCISABILITY
______________________________________________________________
Twenty-five percent (25%) of the shares of Common Stock that are
subject to the Option shall become exercisable on the first anniversary of the
date hereof, and an additional twenty-five percent (25%) of the shares of Common
Stock that are subject to the Option shall become exercisable on each of the
second, third and fourth anniversaries of the date hereof.
