Exhibit 10(iii)(A)(10)
THE SOUTHLAND CORPORATION
1995 Stock Incentive Plan
Award Agreement
GRANT OF NONQUALIFIED STOCK OPTION (NQSO)
The Southland Corporation (the "Company") hereby grants
to
______________________ ) (Social Security Number ______________)
(the "Participant") on October 23, 1995 (the "Date of Grant"), subject
to the approval by Company shareholders of the 1995 Stock Incentive
Plan (the "Plan"), a stock option subject to the Plan and upon
the terms and conditions set forth below. Capitalized terms used
and not otherwise defined herein have the meanings given to them in the
Plan.
1.GRANT OF OPTION
Subject to the terms and conditions hereinafter set forth, the
Company, with the approval and direction of the Incentive Compensation
Committee of the Board of Directors (the "Committee"), grants to the
Participant, as of the Date of Grant, an option to purchase up to
____________ shares of Common Stock at a price of $ ____ per share,
the Fair Market Value of the Common Stock on the Date of Grant. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter referred
to as the "Option Shares." This Option is a Nonqualified Stock Option,
and as such is not intended by the parties hereto to be an Incentive
Stock Option (as such term is defined under the Code ).
2.EXERCISABILITY OF OPTIONS
Subject to such further limitations as are provided herein, the
Option shall become exercisable in five (5) installments, the Participant
having the right hereunder to purchase from the Company the following
number of Option Shares upon exercise of the Option, on and after
the following dates, in cumulative fashion:
(a) on and after the first anniversary of the Date of ▇▇▇▇▇, up to one-
fifth (ignoring fractional shares) of the total number of Option Shares;
(b) on and after the second anniversary of the Date of ▇▇▇▇▇, up to
an additional one-fifth (ignoring fractional shares) of the total
number of Option Shares;
(c) on and after the third anniversary of the Date of ▇▇▇▇▇, up to
an additional one-fifth (ignoring fractional shares) of the total
number of Option Shares;
(d) on and after the fourth anniversary of the Date of ▇▇▇▇▇, up to
an additional one-fifth (ignoring fractional shares) of the total
number of Option Shares; and
(e) on and after the fifth anniversary of the Date of ▇▇▇▇▇, the
remaining Option Shares.
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3.PERFORMANCE ACCELERATED VESTING
After the first anniversary of the Date of ▇▇▇▇▇, an additional
onefifth (ignoring fractional shares) of the total number of Option
Shares shall become exercisable on and after each of the following
events:
(a) on and after the twentieth consecutive trading day that the Closing
Price is equal to or greater than $4.00;
(b) on and after the twentieth consecutive trading day that the Closing
Price is equal to or greater than $5.00;
(c) on and after the twentieth consecutive trading day that the Closing
Price is equal to or greater than $6.50; and
(d) on and after the twentieth consecutive trading day that the Closing
Price is equal to or greater than $8.00.
4. TERMINATION OF OPTION
(a) The Option and all rights hereunder with respect thereto, to
the extent such rights shall not have been exercised, shall
terminate and become null and void after the expiration of ten (10)
years from the Date of Grant (the "Option Term").
(b) If the Participant has an exercisable Option (in whole or in
part) as of the date of the Participant's voluntary termination of
employment with the Company, then the exercisable portion of such Option
shall remain exercisable for a period equal to the lesser of (1) the
remainder of the Option Term or (2) the date which is 60 days
after the date of Participant's voluntary termination of employment.
(c) Upon termination of the Participant's employment with the Company
by reason of Normal Retirement, the Option shall become immediately
one hundred percent (100%) vested, and the Participant shall have
until the expiration of the Option Term to exercise the Option.
(d) Upon termination of the Participant's employment with the Company
by reason of Early Retirement or Disability, any portion of the Option
that is not yet vested shall continue to vest and to be exercisable in
accordance with the provisions of Sections 2 and 3 of this Award
Agreement and, once vested, the Option shall remain exercisable until
the expiration of the Option Term unless, prior thereto, the
Participant reaches age 65, at which time all remaining Options shall
vest.
(e) Upon termination of the Participant's employment with the Company
by reason of Divestiture, any portion of the Option that as of the
date of termination is not yet exercisable shall become null and void
as of the date of termination and the portion, if any, of the
Option that is exercisable as of the date of termination shall remain
exercisable for a period equal to the lesser of (1) the remainder of
the Option Term or (2) the date which is one year after the date of
termination.
(f) In the event of death of the Participant, regardless whether the
Participant has had previously retired (either Early Retirement or
Normal Retirement) or is was disabled at the time of death, the Option
shall
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become immediately one hundred percent (100%) vested and the
Participant's Designated Beneficiary shall have twelve (12) months
following the Participant's death during which to exercise the Option.
(g) A transfer of the Participant's employment between the Company
and any Subsidiary of the Company, shall not be deemed to be a
termination of the Participant's employment.
(h) Notwithstanding any other provisions set forth herein or in the
Plan, if the Participant shall (i) commit any act of malfeasance or
wrongdoing affecting the Company or any Subsidiary of the Company, (ii)
breach any covenant not to compete, or employment contract with the
Company or any Subsidiary of the Company, or (iii) engage in conduct
that would warrant the Participant's discharge for cause (excluding
general dissatisfaction with the performance of the Participant's
duties, but including any act of disloyalty or any conduct clearly
discrediting the Company or any Subsidiary or Affiliate of the
Company), any unexercised portion of the Option shall immediately
terminate and be void.
5.EXERCISE OF OPTIONS
(a) The Participant may exercise the Option from time to time
with respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Manager of the Company's Compensation
and Benefits Department written notice of the intent to exercise.
The notice of exercise shall specify the number of Option Shares as to
which the Option is to be exercised and the date of the exercise
thereof (the "Exercise Date"), which date shall be within five days
after the giving of such notice.
(b) On or before the Exercise Date, the Participant shall pay the
full amount of the purchase price for the Option Shares in cash (U.S.
dollars) or through the surrender of previously acquired shares of Stock
valued at their Fair Market Value on the Exercise Date. In addition,
to the extent permitted by applicable law, the Participant may arrange
with a brokerage firm for that brokerage firm, on behalf of the
Participant, to pay the Company the Exercise Price of the Option being
exercised (either as a loan to the Participant or from the proceeds
of the sale of Stock issued pursuant to that exercise of the
Option), and the Company shall promptly cause the exercised shares to
be delivered to the brokerage firm. Such transactions shall be effected
in accordance with such further procedures as the Committee may establish
from time to time.
On the Exercise Date or as soon thereafter as is practicable,
the Company shall cause to be delivered to the Participant, a
certificate or certificates for the Option Shares then being purchased
(out of theretofore unissued Stock or reacquired Stock, as the Company
may elect) upon full payment for such Option Shares. The obligation
of the Company to deliver Option Shares shall, however, be subject to
the condition that if at any time the Committee shall determine in
its discretion that the listing, registration or qualification of the
Option or the Option Shares upon any securities exchange or such other
securities trading system or market or under any state or federal
law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the
Option or the issuance or purchase of the Option Shares thereunder, the
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 Committee.
(c) If the Participant fails to pay for any of the Option
Shares specified in such notice or to pay any applicable withholding tax
relating thereto or fails to accept delivery of the Option Shares, the
Participant's right to purchase such Option Shares may be terminated
by the Committee.
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6. FAIR MARKET VALUE
As used herein, the "fair market value" of a share of Stock shall be
the Closing Price per share of Stock on Tthe NASDAQ Nasdaq national
Stock mMarket, or such other securities trading system or exchange which
is the primary market on which the Stock may then be listed or traded on
the date in question, or if the Stock has not been traded on such date,
the Closing Price on the first day prior thereto on which the Stock was
so traded.
7. NO RIGHTS OF SHAREHOLDERS
Neither the Participant nor any personal representative shall be,
or shall have any of the rights and privileges of, a shareholder of
the Company with respect to any shares of Stock purchasable or issuable
upon the exercise of the Option, in whole or in part, prior to the
date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION
During the Participant's lifetime, the Option shall be exercisable
only by the Participant or any guardian or legal representative
of the Participant, and the Option shall not be transferable except, in
case of the death of the Participant, by will or the laws of
descent and distribution, nor shall the Option be subject to attachment,
execution or other similar process. In the event of (a) any attempt by
the Participant to alienate, assign, pledge, hypothecate or otherwise
dispose of the Option, except as provided for herein, or (b) the levy
of any attachment, execution or similar process upon the rights or
interest hereby conferred, the Company may terminate the Option by
notice to the Participant and it shall thereupon become null and void.
Notwithstanding the above, in the discretion of the Committee,
Options may be transferable pursuant to a QDRO.
9.RESTRICTIONS ON TRANSFER FOLLOWING EXERCISE
(a) Thirty percent (30%) of the Option Shares (the "Restricted
Option Shares") acquired upon exercise of the Option shall be
delivered to Participant via a stock certificate bearing a legend
restricting the transfer or sale of such Option Shares for a period of
24 months following the Exercise Date. Seventy percent (70%) of the
Option Shares acquired upon exercise of the Option shall not be subject
to any restriction against the transfer or sale of such Option Shares by
the Participant.
(b) If the Participant's employment with the Company is
voluntarily terminated within the 24-month period following the Exercise
Date (other than due to Early Retirement or Normal Retirement) or is
terminated due to cause, the Company may repurchase the Restricted
Option Shares at the Exercise Price paid by the Participant. If
the Company elects not to purchase such Restricted Option Shares, the
Participant shall continue to hold such Shares subject to the
restrictions thereon.
(c) Upon a termination of employment as a result of death,
Disability, Divestiture, Early Retirement or Normal Retirement, any
Restricted Option Shares then held by a Participant or a Participant's
Designated Beneficiary shall be released from, and no Option Shares
acquired after the date of termination shall be subject to, the
restrictions on transfer or sale set forth in paragraph 9(a) above.
Promptly after the date of any such termination, upon receipt of
certificates representing any Restricted Option Shares, the Company
shall exchange any such certificates for certificates representing
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such Shares free of any restrictive legend relating to the lapsed
restrictions.
10. WITHHOLDING TAX REQUIREMENTS
Following receipt of each notice of exercise of the Option, the
Company shall deliver to Participant a notice specifying the
amount that Participant is required to pay to satisfy applicable
tax withholding requirements. Participant hereby agrees to either
(i) deliver to the Company by the due date specified in such notice
from the Company a check payable to the Company and equal to the amount
set forth in such notice or (ii) make other appropriate arrangements
acceptable to the Company to satisfy such tax withholding requirements.
11. NO RIGHT TO EMPLOYMENT
Neither the granting of the Option nor its exercise shall be
construed as granting to the Participant any right with respect
to continued employment with the Company.
12. CHANGE IN CONTROL
The Committee shall, in its sole discretion, have the right
to accelerate the vesting of any Option and to release any restrictions
on the Restricted Option Shares, in the event of a Change in Control.
13. ADJUSTMENT OF AWARDS
The terms of this Option and the number of Option Shares
purchasable hereunder shall be subject to adjustment pursuant to Sections
5(c) through (hg) of the Plan.
14. AMENDMENT OF OPTION
The Option may be amended by the Committee at any time (i) if
the Committee determines, in its sole discretion, that amendment is
necessary or advisable in the light of any additions to or changes in
the Code or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change occurs
after the Date of Grant and by its terms applies to the Option; or (ii)
other than in the circumstances described in clause (i), with the consent
of the Participant.
15. NOTICE
Any notice to the Company provided for in this Award Agreement shall
be in writing and addressed to the Company in care of the Manager of
the Company's Compensation and Benefits Department, and any notice
to the Participant shall be in writing and addressed to the
Participant at the Participant's current address shown on the records
of the Company or such other address as the Participant may submit to
the Company in writing. Any notice shall be deemed to be duly given if
and when properly addressed with postage prepaid, or if personally
delivered to the addressee or, in the case of notice to the Company,
if sent via telecopy to the Compensation and Benefits Department's
facsimile machine at such telephone number as may be published in the
Company's published telephone directory.
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16. INCORPORATION OF PLAN BY REFERENCE
The Option is granted pursuant to the terms of the Plan, which terms
are incorporated herein by reference, and the Option shall in all
respects be interpreted in accordance with the Plan. The Committee
shall interpret and construe the Plan and this Award Agreement, and
its interpretations and determinations shall be conclusive and binding
on the parties hereto and any other person claiming an interest
hereunder, with respect to any issue arising hereunder or thereunder.
In the event of a conflict between the terms of this Award Agreement
and the Plan, the terms of the Plan shall control.
17. GOVERNING LAW
The validity, construction, interpretation and effect of this
Award Agreement shall exclusively be governed by and determined in
accordance with the law of the State of Texas, except to the extent
preempted by federal law, which shall to that extent govern.
IN WITNESS WHEREOF, The Southland Corporation has caused its
duly authorized officer to execute this Grant of Nonqualified Stock
Option, and the Participant has placed his or her signature hereon,
effective as of the Date of ▇▇▇▇▇.
THE SOUTHLAND CORPORATION
By:_____________________________________
President and Chief Executive Officer
ACCEPTED AND AGREED TO:
By:_____________________________________
Participant
Participant's Social Security Number: _____________
Tab 5
EXHIBIT 11
THE SOUTHLAND CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER-SHARE EARNINGS
(In thousands, except per-share data)
CALCULATION OF EARNINGS (LOSS) PER COMMON SHARE
YEAR ENDED DECEMBER 31
--------------------------------
1995 1994 1993
---------- ---------- ----------
Earnings (loss) before extraordinary gain and cumulative
effect of accounting change ............................. $ 167,594 $ 91,996 $ (11,280)
Add interest on Convertible Debt, net of tax .............. 1,093 - -
---------- ---------- ----------
Earnings (loss) before extraordinary gain and cumulative
effect of accounting change applicable to common stock
and equivalents outstanding.............................. 168,687 91,996 (11,280)
Extraordinary gain ........................................ 103,169 - 98,968
Cumulative effect of accounting change for postemployment
benefits ................................................ - - (16,537)
---------- ---------- ----------
Net earnings applicable to common stock and equivalents
outstanding.............................................. $ 271,856 $ 91,996 $ 71,151
========== ========== ==========
Weighted average number of common shares outstanding....... 409,923 409,923 409,938
Weighted average number of common shares issuable upon
conversion of Convertible Debt .......................... 6,811 - -
---------- ---------- ---------
Weighted average number of common shares and
equivalents outstanding.................................. 416,734 409,923 409,938
========== ========== =========
Earnings (loss) per common share and equivalents (Primary
and Fully Diluted):
Before extraordinary gain and cumulative effect of
accounting change .................................... $ .40 $ .22 $(.03)
Extraordinary gain ..................................... .25 - .24
Cumulative effect of accounting change ................. - - (.04)
-------- ------ ------
Net earnings ........................................... $ .65 $ .22 $ .17
======== ====== ======
Tab 6
