EMPLOYEE OPTION AWARD AGREEMENT Non-Qualified and Incentive Stock Options Pursuant to THE BOMBAY COMPANY, INC.
Non-Qualified
and Incentive Stock Options
Pursuant
to
THE
BOMBAY COMPANY, INC.
2006
EMPLOYEE STOCK INCENTIVE PLAN
This
Employee Option Award Agreement (the “Agreement”) is made this ___ day of
_____________, _____ between THE BOMBAY COMPANY, INC., a Delaware corporation
(the “Company”), and ____________________, an employee of the Company or one of
its Affiliates ( “Employee”).
WHEREAS,
the Company desires to carry out the purposes of The Bombay Company, Inc. 2006
Employee Stock Incentive Plan (the “Plan”) by affording Employee the opportunity
to purchase shares of the Company’s common stock, $1.00 par value per share (the
“Shares”);
WHEREAS,
the Plan is administered by the Compensation and Human Resources Committee
(the
“Committee”) of the Company’s Board of Directors (the “Board”); and
WHEREAS,
the Committee has selected Employee to participate in the Plan by the grant
of
an option;
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as
follows:
1. Grant
of Option.
The
Company hereby grants to Employee the right and option (the “Option”) to
purchase an aggregate of _______ Shares, such number of Shares being subject
to
adjustment as provided in paragraph 8 hereof, and on the terms and conditions
herein set forth (the “Option Shares”). Of the Options granted pursuant to this
Agreement, Options for _______ shares (the “ISO Shares”) are granted as an
Incentive Stock Option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”), and Options for ______ shares (the “NQSO
Shares”) are granted as a Nonqualified Stock Option.
2. Purchase
Price.
The
purchase price of the Option Shares shall be $_____ per Share, such purchase
price being 100% of the fair market value of such Shares on the date first
appearing above (the “Date of Grant”).
3. Exercise
of Option.
A. ISO
Shares: Unless expired as provided in paragraph 5 below, and subject to the
special provisions of paragraph 6 below, the Option for ISO Shares may be
exercised from time to time in whole or in part for not more than 25% of the
entire number of ISO Shares at any time after the first anniversary of the
Date
of Grant, and an additional 25% of the total ISO Shares on each of the three
(3)
succeeding anniversaries of the Date of Grant.
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B. NQSO
Shares: Unless expired as provided in paragraph 5 below, and subject to the
special provisions of paragraph 6 below, the Option for NQSO Shares may be
exercised from time to time in whole or in part for not more than 25% of the
entire number of NQSO Shares at any time after the first anniversary of the
Date
of Grant, and an additional 25% of the total NQSO Shares on each of the three
(3) succeeding anniversaries of the Date of Grant.
4. Manner
of Exercise; Payment of Purchase Price.
A. Subject
to the terms and conditions of this Agreement, the Option shall be exercised
by
written notice to the Company at its principal office. Such notice shall state
the election to exercise the Option and shall specify the number of Option
Shares sought to be purchased pursuant to the notice including whether such
Option Shares are ISO Shares or NQSO Shares. Such notice of exercise shall
be
signed by Employee and shall be irrevocable when given.
B. The
notice of exercise shall be accompanied by the full payment of the purchase
price for the Option Shares to be purchased in cash, by certified or bank
cashiers check, or through satisfactory arrangements for payment by a broker
representing Employee in the sale of some or all of the Option Shares. Subject
to approval of the Committee, payment of the purchase price may be accomplished
by the surrender of stock certificates representing Shares held for a period
of
not less than six months and having an aggregate fair market value on the date
of exercise equal to the purchase price of the Option Shares to be purchased,
or
by a combination of cash and such Shares.
C. Upon
receipt of the purchase price, and subject to the terms of paragraph 11, a
certificate representing the Option Shares purchased shall be registered in
the
name of the person or persons so exercising the Option. In the event the Option
shall be exercised pursuant to paragraph 7 by any person or persons other than
Employee, such notice shall be accompanied by appropriate proof satisfactory
to
the Company of the right of such person or persons to exercise the Option.
All
Shares issued as a result of an exercise of an Option as provided herein shall
be fully paid and non-assessable.
D. The
payment of withholding tax liability by Employee shall be a condition precedent
to the Company’s obligation to issue any certificates for Shares resulting from
an exercise of an Option.
5. Exercise
and Expiration of Option.
This
Option, if not exercised, shall expire and become null and void upon the
expiration of three (3) months after Employee ceases to be employed by the
Company or any of its Affiliates unless such termination shall have been for
cause, as determined by the Committee, in which event the Option shall be null
and void as of the date of such termination. Notwithstanding the above, if
Employee retires from the Company or any of its Affiliates, the Option shall
remain exercisable for a period of 36 months following such retirement.
“Retirement” shall mean the separation from employment, other than by the
Company for cause, after the earlier of (a) completing 15 years of service
with
the Company or any Subsidiary and attaining age 55 or (b) attaining age 65.
In
the event of Employee’s death or permanent disability (Employee’s permanent
disability shall be established only if Employee is “disabled” as determined in
accordance with Section 22(e)(3) of the Code), the Option shall be exercisable
for a period of 12 months following such death or disability. Notwithstanding
the above, the Option shall, without exception, become null and void once a
period of 7 years shall have elapsed since the Date of Grant. Except as provided
in paragraph 6 below, only those portions of this Option vested as of the date
of termination of Employee’s employment may be exercised.
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6. Acceleration
of Exercise Dates.
Notwithstanding the provisions of Paragraph 3 above relating to the vesting
of
this Option in installments, this Option shall be 100% vested, until the
expiration date provided in paragraph 5 above, for the entire number of Option
Shares covered hereby upon the retirement of Employee or any Change of Control
of the Company (as defined in the Plan).
7. Option
Nontransferable.
Unless
permitted by law or regulation and approved by the Committee, the Option and
any
right related thereto shall not be transferable by Employee otherwise than
by
will or by the laws of descent and distribution and may be exercised during
Employee’s lifetime only by Employee. Upon the death of Employee, to the extent
exercisable as provided above, the Option may be exercised by Employee’s
executor, administrator, legatee or distributee, as the case may
be.
8. Adjustments
of Shares Subject to Option.
If any
Shares shall at any time be changed or exchanged by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination of shares or a dividend payable in stock, then the aggregate number
of Option Shares subject to this Agreement and the purchase price of such Option
Shares shall be automatically adjusted such that Employee’s proportionate
interest shall be maintained as before the occurrence of such event. The
determination of any such adjustment by the Committee shall be final, binding
and conclusive.
9. No
Contract for Employment.
This
Agreement does not constitute a contract for employment and shall not affect
the
right of the Company to terminate Employee’s employment for any reason
whatsoever or for no reason.
10. Rights
as Shareholder.
This
Option shall not entitle Employee or any permitted transferee to any rights
of a
shareholder of the Company or to any notice of proceedings of the Company with
respect to any Option Shares issuable upon exercise of this Option unless and
until the Option has been exercised for such Shares.
11. Restriction
on Issuance of Shares.
The
Company shall not be required to issue or deliver any certificates for Shares
purchased upon the exercise of an Option prior to the obtaining of any approval
from any governmental agency that the Company shall, in its sole discretion,
determine to be necessary or advisable, and the completion of any registration
or other qualification of such Shares on their offering or sale under any state
or federal law, ruling or regulations of any governmental body that the Company
shall, in its sole discretion, determine to be necessary or advisable. In
addition, if the offering and sale of the Shares reserved for issuance upon
exercise of Options shall not then be registered under the Securities Act of
1933, as amended, the Company may, upon Employee’s exercise of any Option,
require Employee or his permitted transferee to represent in writing that the
Shares being acquired are for investment and not with a view to distribution,
and may ▇▇▇▇ the certificate for the Shares with a legend restricting transfer
and may issue stop transfer orders relating to such certificate to the transfer
agent.
12. Lapse
of Option.
This
Agreement shall be null and void in the event Employee shall fail to sign and
return a counterpart hereof to the Company within thirty (30) days of its
delivery to Employee.
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13. Confidentiality
and Non-Solicitation Restrictions.
In
consideration of Employee’s receipt of the above stock option grant, Employee
agrees as follows:
A. Employee
will not use or disclose to any person any confidential information obtained
while in the employ of the Company, including, without limitation, any of the
Company’s inventions, methods of distribution, vendors, customers or other trade
secrets; provided, however, that this provision shall not preclude Employee
from
use of or disclosure of information known generally to the public or of
information not considered confidential by persons engaged in the business
conducted by the Company or from disclosure required by law or court order.
Upon
termination of employment, Employee shall immediately return to the Company
all
documents, reports, files, memoranda, records, keys and pass cards, software
and
other physical or personal property which Employee has received or prepared
or
helped to prepare in connection with his or her employment which is in
Employee’s possession or control and Employee agrees not to retain any copies,
duplications, reproductions or excerpts thereof.
B. Employee
will not now or for a period of one (1) year after Employee’s termination of
employment solicit and/or attempt to recruit employees of the Company for
employment with any subsequent employer of Employee or such employer’s
affiliates or attempt directly or indirectly to solicit the trade or business
of
any current or prospective customer, supplier or partner of the
Company.
C. In
the
event Employee fails to comply with the provisions of paragraphs A and B above,
the Company shall have the right to rescind any exercise or other transaction
involving the Options granted pursuant to this Agreement up to six (6) months
prior to such failure to comply and for up to two (2) years thereafter. In
the
event of any such rescission, Employee shall pay to the Company the amount
of
any gain realized or payment received as a result of the rescinded exercise
in
such manner and on such terms and conditions as may be required by the Company,
and the Company shall be entitled to set off against the amount of any such
gain
any amount owed to Employee by the Company.
14. Binding
Effect.
This
Agreement shall be binding upon the heirs, executors, administrators, and
successors of the parties hereto.
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15. Modification.
No
change or modification of this Agreement shall be valid or binding upon the
parties unless the change or modification is in writing and signed by the
parties; provided, however, that the Company may change or modify this Agreement
without Employee’s consent or signature if the Company determines, in its sole
discretion, that such change or modification is necessary for purposes of
compliance with or exemption from the requirements of Section 409A of the Code
or any regulations or other guidance issued thereunder. Notwithstanding the
preceding sentence, the Company may amend the Plan and this Agreement to the
extent permitted by the Plan.
16. Governing
Instrument and Law.
This
Agreement shall in all respects be governed by the terms and provisions of
the
Plan, and in the event of a conflict between the terms of this Agreement and
the
terms of the Plan, the terms of the Plan shall control. Capitalized terms used
and not otherwise defined in this Agreement shall have the respective meanings
given them in the Plan. This Agreement shall be governed by the laws of the
State of Delaware, without regard to its conflict of laws
principles.
THE
BOMBAY COMPANY, INC.
By:/s/▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇.
Vice
President and General Counsel
Accepted
and Agreed:
Date: