AWARD NUMBER
------------
7-ELEVEN, INC.
1995 Stock Incentive Plan
2001 Award Agreement
GRANT OF NONQUALIFIED STOCK OPTION (NQSO)
7-Eleven, Inc. (the "Company") hereby grants to [name],
[social security number] (the "Participant") as of May 14,
2001 (the "Date of Grant"), pursuant to 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
Committee, grants to the Participant, as of the Date of
Grant, an option to purchase up to 10,000 shares of Common
Stock at a price of $--------, which is 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 OPTION
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.
Tab 2
3. PERFORMANCE ACCELERATED VESTING
After the first anniversary of the Date of ▇▇▇▇▇, an
additional one-fifth (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 $20.00;
(b) on and after the twentieth consecutive trading day
that the Closing Price is equal to or greater than $25.00;
(c) on and after the twentieth consecutive trading day
that the Closing Price is equal to or greater than $32.50;
and
(d) on and after the twentieth consecutive trading day
that the Closing Price is equal to or greater than $40.00.
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"); provided, however, if a Participant's
employment with the Company terminates for any reason other
than those described in the following paragraphs (b) through
(h) of this Section 4, then the exercisable portion of any
Option held by such Participant 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 termination of employment.
(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, whether
voluntary or involuntary, for any reason other than those
described in the following paragraphs (b) through (h) of this
Section 4, 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 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 had previously retired (either Early
Retirement or Normal Retirement) or was Disabled at the time
of death, the Option shall 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 OPTION
(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 Company's
Director of Compensation and Benefits written notice of the
intent to exercise or by complying with such other procedures
as may be established by the Company's Director of
Compensation and Benefits and communicated to the
Participant. The notice of exercise shall specify the number
of Option Shares as to which the Option is to be exercised,
the Award Number (as indicated on the first page of the
applicable Award Agreement), 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.
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 The
New York Stock Exchange, 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
Qualified Domestic Relations Order.
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 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 Section 5 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),
in the latter case 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 Company's Director of Compensation and Benefits,
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 facsimile
machine of the Director of Compensation and Benefits at such
telephone number as may be published in the Company's
published telephone directory.
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 Company 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 ▇▇▇▇▇.
7-ELEVEN, INC.
By: /s/
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
President and CEO
ACCEPTED AND AGREED TO:
By: /s/
---------------------------------
Participant: [name of employee]
Participant's Social Security Number:-----------