RUBIO’S RESTAURANTS, INC. STOCK OPTION AGREEMENT
Exhibit
10.56
▇▇▇▇▇’▇
RESTAURANTS, INC.
RECITALS
A. The Board
has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board or of the board of directors of any
Parent or Subsidiary and consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Optionee
is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Corporation’s grant of an option to
Optionee.
C. All
capitalized terms in this Agreement shall have the meaning assigned to them in
the attached Appendix.
NOW,
THEREFORE, it is
hereby agreed as follows:
1. Grant
of Option. The
Corporation hereby grants to Optionee, as of the Grant Date, an option to
purchase up to the number of Option Shares specified in the Grant Notice. The
Option Shares shall be purchasable from time to time during the option term
specified in Paragraph 2 at the Exercise Price.
2. Option
Term. This
option shall have a maximum term of ten (10) years measured from the Grant Date
and shall accordingly expire at the close of business on the Expiration Date,
unless sooner terminated in accordance with Paragraph 5 or 6.
3. Limited
Transferability.
(a) This
option shall be neither transferable nor assignable by Optionee other than by
will or by the laws of descent and distribution following Optionee’s death and
may be exercised, during Optionee’s lifetime, only by Optionee. However,
Optionee may designate one or more persons as the beneficiary or beneficiaries
of this option, and this option shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee’s death while holding such option. Such beneficiary or beneficiaries
shall take the transferred option subject to all the terms and conditions of
this Agreement, including (without limitation) the limited time period during
which this option may, pursuant to Paragraph 5, be exercised following
Optionee’s death.
(b) If this
option is designated a Non-Statutory Option in the Grant Notice, then this
option may, in connection with the Optionee’s estate plan, be assigned in whole
or in part during Optionee’s lifetime to one or more members of Optionee’s
immediate family or to a trust established for the exclusive benefit of one or
more such family members. The assigned portion shall be exercisable only by the
person or persons who acquire a proprietary interest in the option pursuant to
such assignment. The terms applicable to the assigned portion shall be the same
as those in effect for this option immediately prior to such
assignment.
4. Dates
of Exercise. This
option shall become exercisable for the Option Shares in one or more
installments as specified in the Grant Notice. As the option becomes exercisable
for such installments, those installments shall accumulate and the option shall
remain exercisable for the accumulated installments until the Expiration Date or
sooner termination of the option term under Paragraph 5 or 6.
5. Cessation
of Service. The
option term specified in Paragraph 2 shall terminate (and this option shall
cease to be outstanding) prior to the Expiration Date should any of the
following provisions become applicable:
(a) Should
Optionee cease to remain in Service for any reason (other than death, Permanent
Disability or Misconduct) while holding this option, then Optionee shall have a
period of three (3) months (commencing with the date of such cessation of
Service) during which to exercise this option, but in no event shall this option
be exercisable at any time after the Expiration Date.
(b) Should
Optionee die while holding this option, then the personal representative of
Optionee’s estate or the person or persons to whom the option is transferred
pursuant to Optionee’s will or in accordance with the laws of inheritance shall
have the right to exercise this option. However, if Optionee has designated one
or more beneficiaries of this option, then those persons shall have the
exclusive right to exercise this option following Optionee’s death. Such right
shall lapse, and this option shall cease to be outstanding, upon the
earlier of (i)
the expiration of the twelve (12)-month period measured from the date of
Optionee’s death or (ii) the Expiration Date.
(c) Should
Optionee cease Service by reason of Permanent Disability while holding this
option, then Optionee shall have a period of twelve (12) months (commencing with
the date of such cessation of Service) during which to exercise this option. In
no event shall this option be exercisable at any time after the Expiration
Date.
(d) During
the limited period of post-Service exercisability, this option may not be
exercised in the aggregate for more than the number of Option Shares for which
the option is exercisable at the time of Optionee’s cessation of Service. Upon
the expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not been exercised. However,
this option shall, immediately upon Optionee’s cessation of Service for any
reason, terminate and cease to be outstanding with respect to any Option Shares
for which this option is not otherwise at that time exercisable.
(e) Should
Optionee’s Service be terminated for Misconduct, then this option shall
terminate immediately and cease to remain outstanding.
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6. Special
Acceleration of Option.
(a) This
option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall automatically accelerate so that this option
shall, immediately prior to the effective date of such Corporate Transaction,
become exercisable for all of the Option Shares at the time subject to this
option and may be exercised for any or all of those Option Shares as fully
vested shares of Common Stock. No such acceleration of this option shall occur,
however, if and to the extent: (i) this option is, in connection with the
Corporate Transaction, to be assumed by the successor corporation (or parent
thereof) or (ii) this option is to be replaced with a cash incentive program of
the successor corporation which preserves the spread existing at the time of the
Corporate Transaction on the Option Shares for which this option is not
otherwise at that time exercisable (the excess of the Fair Market Value of those
Option Shares over the aggregate Exercise Price payable for such shares) and
provides for subsequent payout in accordance with the same option
exercise/vesting schedule set forth in the Grant Notice.
(b) Immediately
following the Corporate Transaction, this option shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof) in connection with the Corporate Transaction.
(c) If this
option is assumed in connection with a Corporate Transaction, then this option
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to
Optionee in consummation of such Corporate Transaction had the option been
exercised immediately prior to such Corporate Transaction, and appropriate
adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.
(d) This
Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
7. Adjustment
in Option Shares. Should
any change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate adjustments shall be made to
(i) the total number and/or class of securities subject to this option and (ii)
the Exercise Price in order to reflect such change and thereby preclude a
dilution or enlargement of benefits hereunder.
8. Stockholder
Rights. The
holder of this option shall not have any stockholder rights with respect to the
Option Shares until such person shall have exercised the option, paid the
Exercise Price and become a holder of record of the purchased
shares.
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9. Manner
of Exercising Option.
(a) In order
to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or
persons exercising the option) must take the following actions:
(i) Execute
and deliver to the Corporation a Notice of Exercise for the Option Shares for
which the option is exercised.
(ii) Pay the
aggregate Exercise Price for the purchased shares in one or more of the
following forms:
(A) cash or
check made payable to the Corporation;
(B) a
promissory note payable to the Corporation, but only to the extent authorized by
the Plan Administrator in accordance with Paragraph 13;
(C) shares of
Common Stock held by Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or
(D) through a
special sale and remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently provide irrevocable
instructions (i) to a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (ii) to the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.
Except to
the extent the sale and remittance procedure is utilized in connection with the
option exercise, payment of the Exercise Price must accompany the Notice of
Exercise delivered to the Corporation in connection with the option
exercise.
(iii) Furnish
to the Corporation appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this
option.
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(iv) Make
appropriate arrangements with the Corporation (or Parent or Subsidiary employing
or retaining Optionee) for the satisfaction of all Federal, state and local
income and employment tax withholding requirements applicable to the option
exercise.
(b) As soon
as practical after the Exercise Date, the Corporation shall issue to or on
behalf of Optionee (or any other person or persons exercising this option) a
certificate for the purchased Option Shares, with the appropriate legends
affixed thereto.
(c) In no
event may this option be exercised for any fractional shares.
10. Compliance
with Laws and Regulations.
(a) The
exercise of this option and the issuance of the Option Shares upon such exercise
shall be subject to compliance by the Corporation and Optionee with all
applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange (or the Nasdaq National Market, if applicable)
on which the Common Stock may be listed for trading at the time of such exercise
and issuance.
(b) The
inability of the Corporation to obtain approval from any regulatory body having
authority deemed by the Corporation to be necessary to the lawful issuance and
sale of any Common Stock pursuant to this option shall relieve the Corporation
of any liability with respect to the non-issuance or sale of the Common Stock as
to which such approval shall not have been obtained. The Corporation, however,
shall use its best efforts to obtain all such approvals.
11. Successors
and Assigns. Except
to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Corporation
and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries
of this option designated by Optionee.
12. Notices. Any
notice required to be given or delivered to the Corporation under the terms of
this Agreement shall be in writing and addressed to the Corporation at its
principal corporate offices. Any notice required to be given or delivered to
Optionee shall be in writing and addressed to Optionee at the address indicated
below Optionee’s signature line on the Grant Notice. All notices shall be deemed
effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.
13. Financing. The
Plan Administrator may, in its absolute discretion and without any obligation to
do so, permit Optionee to pay the Exercise Price for the purchased Option Shares
by delivering a full-recourse promissory note payable to the Corporation. The
terms of any such promissory note (including the interest rate, the requirements
for collateral and the terms of repayment) shall be established by the Plan
Administrator in its sole discretion.
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14. Construction. This
Agreement and the option evidenced hereby are made and granted pursuant to the
Plan and are in all respects limited by and subject to the terms of the Plan.
All decisions of the Plan Administrator with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.
15. Governing
Law. The
interpretation, performance and enforcement of this Agreement shall be governed
by the laws of the State of California without resort to that State’s
conflict-of-laws rules.
16. Excess
Shares. If the
Option Shares covered by this Agreement exceed, as of the Grant Date, the number
of shares of Common Stock which may without stockholder approval be issued under
the Plan, then this option shall be void with respect to those excess shares,
unless stockholder approval of an amendment sufficiently increasing the number
of shares of Common Stock issuable under the Plan is obtained in accordance with
the provisions of the Plan.
17. Additional
Terms Applicable to an Incentive Option. In the
event this option is designated an Incentive Option in the Grant Notice, the
following terms and conditions shall also apply to the grant:
(a) This
option shall cease to qualify for favorable tax treatment as an Incentive Option
if (and to the extent) this option is exercised for one or more Option Shares:
(A) more than three (3) months after the date Optionee ceases to be an Employee
for any reason other than death or Permanent Disability or (B) more than twelve
(12) months after the date Optionee ceases to be an Employee by reason of
Permanent Disability.
(b) No
installment under this option shall qualify for favorable tax treatment as an
Incentive Option if (and to the extent) the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder would, when added to the aggregate value
(determined as of the respective date or dates of grant) of the Common Stock or
other securities for which this option or any other Incentive Options granted to
Optionee prior to the Grant Date (whether under the Plan or any other option
plan of the Corporation or any Parent or Subsidiary) first become exercisable
during the same calendar year, exceed One Hundred Thousand Dollars ($100,000) in
the aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation be
exceeded in any calendar year, this option shall nevertheless become exercisable
for the excess shares in such calendar year as a Non-Statutory
Option.
(c) Should
the exercisability of this option be accelerated upon a Corporate Transaction,
then this option shall qualify for favorable tax treatment as an Incentive
Option only to the extent the aggregate Fair Market Value (determined at the
Grant Date) of the Common Stock for which this option first becomes exercisable
in the calendar year in which the Corporate Transaction occurs does not, when
added to the aggregate value (determined as of the respective date or dates of
grant) of the Common Stock or other securities for which this option
or one or
more other Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the Corporation or any
Parent or Subsidiary) first become exercisable during the same calendar year,
exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation be exceeded in the
calendar year of such Corporate Transaction, the option may nevertheless be
exercised for the excess shares in such calendar year as a Non-Statutory
Option.
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(d) Should
Optionee hold, in addition to this option, one or more other options to purchase
Common Stock which become exercisable for the first time in the same calendar
year as this option, then the foregoing limitations on the exercisability of
such options as Incentive Options shall be applied on the basis of the order in
which such options are granted.
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EXHIBIT
I
NOTICE
OF EXERCISE
I hereby
notify ▇▇▇▇▇’▇ Restaurants, Inc. (the “Corporation”) that I elect to purchase
____________ shares of
the Corporation’s Common Stock (the “Purchased Shares”) at the option exercise
price of $ _____________ per
share (the “Exercise Price”) pursuant to that certain option (the “Option”)
granted to me under the Corporation’s 1999 Stock Incentive Plan
on ________________________ ,
_______.
Concurrently
with the delivery of this Exercise Notice to the Corporation, I shall hereby pay
to the Corporation the Exercise Price for the Purchased Shares in accordance
with the provisions of my agreement with the Corporation (or other documents)
evidencing the Option and shall deliver whatever additional documents may be
required by such agreement as a condition for exercise. Alternatively, I may
utilize the special broker-dealer sale and remittance procedure specified in my
agreement to effect payment of the Exercise Price.
___________________________,
________
Date
| Optionee | |||
| Address: | |||
| Print name in exact manner it is to appear on the stock certificate: | |||
| Address to which certificate is to be sent, if different from address above: | |||
|
Social
Security Number: |
|||
APPENDIX
The
following definitions shall be in effect under the Agreement:
A. Agreement shall
mean this Stock Option Agreement.
B. Board shall
mean the Corporation’s Board of Directors.
C. Common
Stock shall
mean shares of the Corporation’s common stock.
D. Code shall
mean the Internal Revenue Code of 1986, as amended.
E. Corporate
Transaction shall
mean either of the following stockholder-approved transactions to which the
Corporation is a party:
(i) a merger
or consolidation in which securities possessing more than fifty percent (50%) of
the total combined voting power of the Corporation’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such transaction, or
(ii) the sale,
transfer or other disposition of all or substantially all of the Corporation’s
assets in complete liquidation or dissolution of the Corporation.
F. Corporation shall
mean ▇▇▇▇▇’▇ Restaurants, Inc., a Delaware corporation, and any successor
corporation to all or substantially all of the assets or voting stock of ▇▇▇▇▇’▇
Restaurants, Inc. which shall by appropriate action adopt the Plan.
G. Employee shall
mean an individual who is in the employ of the Corporation (or any Parent or
Subsidiary), subject to the control and direction of the employer entity as to
both the work to be performed and the manner and method of
performance.
H. Exercise
Date shall
mean the date on which the option shall have been exercised in accordance with
Paragraph 9 of the Agreement.
I. Exercise
Price shall
mean the exercise price per Option Share as specified in the Grant
Notice.
J. Expiration
Date shall
mean the date on which the option expires as specified in the Grant
Notice.
K. Fair
Market Value per
share of Common Stock on any relevant date shall be determined in accordance
with the following provisions:
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(i) If the
Common Stock is at the time traded on the Nasdaq National Market, then the Fair
Market Value shall be deemed equal to the closing selling price per share of
Common Stock on the date in question, as the price is reported by the National
Association of Securities Dealers on the Nasdaq National Market. If there is no
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists, or
(ii) If the
Common Stock is at the time listed on any Stock Exchange, then the Fair Market
Value shall be deemed equal to the closing selling price per share of Common
Stock on the date in question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock, as such price is
officially quoted in the composite tape of transactions on such exchange. If
there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
▇. ▇▇▇▇▇
Date shall
mean the date of grant of the option as specified in the Grant
Notice.
▇. ▇▇▇▇▇
Notice shall
mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant to
which Optionee has been informed of the basic terms of the option evidenced
hereby.
N. Incentive
Option shall
mean an option which satisfies the requirements of Code Section
422.
O. Misconduct shall
mean the commission of any act of fraud, embezzlement or dishonesty by Optionee,
any unauthorized use or disclosure by Optionee of confidential information or
trade secrets of the Corporation (or any Parent or Subsidiary), or any other
intentional misconduct by Optionee adversely affecting the business or affairs
of the Corporation (or any Parent or Subsidiary) in a material manner. The
foregoing definition shall not be deemed to be inclusive of all the acts or
omissions which the Corporation (or any Parent or Subsidiary) may consider as
grounds for the dismissal or discharge of Optionee or any other individual in
the Service of the Corporation (or any Parent or Subsidiary).
P. Non-Statutory
Option shall
mean an option not intended to satisfy the requirements of Code Section
422.
Q. Notice
of Exercise shall
mean the notice of exercise in the form attached hereto as Exhibit
I.
R. Option
Shares shall
mean the number of shares of Common Stock subject to the option as specified in
the Grant Notice.
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S. Optionee shall
mean the person to whom the option is granted as specified in the Grant
Notice.
T. Parent shall
mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
U. Permanent
Disability shall
mean the inability of Optionee to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which is
expected to result in death or has lasted or can be expected to last for a
continuous period of twelve (12) months or more.
V. Plan shall
mean the Corporation’s 1999 Stock Incentive Plan.
W. Plan
Administrator shall
mean either the Board or a committee of the Board acting in its capacity as
administrator of the Plan.
X. Service shall
mean the Optionee’s performance of services for the Corporation (or any Parent
or Subsidiary) in the capacity of an Employee, a non-employee member of the
board of directors or a consultant or independent advisor.
Y. Stock
Exchange shall
mean the American Stock Exchange or the New York Stock Exchange.
Z. Subsidiary shall
mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
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