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Exhibit 10.9
STOCK OPTION AGREEMENT
WITH RESPECT TO
INGLES MARKETS, INCORPORATED
THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of the 2nd day of August, 1995, by and between INGLES MARKETS, INCORPORATED a
North Carolina corporation (the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇(the
"Optionee").
W I T N E S S E T H
WHEREAS, the Audit/Compensation Committee (the "Committee") of the Board of
Directors of the Company deems it to be in the best interests of the Company to
enter into this Agreement; and
WHEREAS, this Agreement has been approved by the vote of the members of the
Committee; and
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto do hereby agree as follows:
1. Purposes of this Agreement. The purposes of this Agreement are (a)
to insure the retention of the Optionee as Vice President-Strategic Planning of
the Company and (b) to provide incentive to the Optionee to devote his utmost
effort and skill to the advancement and betterment of the Company, by
permitting him to participate in the ownership of the Company and, thereby, in
the success and increased value of the Company that he has helped to produce.
It is intended that the option issued pursuant to this Agreement shall not
constitute an incentive stock option within the meaning of Section 422A of the
Internal Revenue Code of 1986, as now or hereafter amended (the "Code");
rather, the Option is intended to constitute a nonqualified stock option.
2. Grant Of Option. The Company hereby grants to the Optionee an
option (the "Option") to purchase all or any part of one hundred thousand
(100,000) shares (the "Option Shares") of the Company's Class A Common Stock,
$.05 par value (the "Class A Stock"), on the terms and conditions set forth
herein. The date of the grant of this Option shall be the day and year first
above written (the "Grant Date").
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3. Exercise Price.
(a) Exercise Price. The exercise price (the "Exercise Price") for
each Option Share shall be $10.625 per share.
(b) Medium and Time of Payment. The Exercise Price shall be
payable in cash or its equivalent, or, subject to the approval of the
Committee, by means of unrestricted shares of the Company's capital stock or
any combination thereof upon the exercise of the Option. Payment in currency
or by check, bank draft, cashier's check or postal money order shall be
considered payment in cash. The Company shall not loan any monies to the
Optionee for purchase of any Option Shares. In the event of payment in the
Company's capital stock, the shares used in payment of the purchase price shall
be taken at the Fair Market Value thereof (as defined below), which, for
purposes of this Section 3(b), shall be determined on the date immediately
preceding the day of payment. The "Fair Market Value" of the Company's capital
stock shall mean (i) if payment date occurs on the day after the effective date
of a public offering of such stock, the public offering price; (ii) if the
Company's capital stock is listed on an established stock exchange, the closing
price of the Company's capital stock on such stock exchange on the relevant
date or, if no sale of the Company's capital stock shall have been made on such
stock exchange that day, such price for the next preceding day upon which a
sale shall have occurred; (iii) if the Company's capital stock is not listed
upon an established exchange but is quoted on National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), the closing sale
price (if the stock is listed in the National Market List) or the mean between
the closing dealer "bid" and "asked" prices for the Corporation's capital stock
as quoted on NASDAQ on the relevant date or, if no such closing sale price or
"bid" and "asked" prices are quoted for the day of the grant, such prices on
the next preceding day on which such prices are quoted; or (iv) if the
Company's capital stock is neither listed on an established stock exchange nor
quoted on NASDAQ, the fair market value of such stock on the relevant date as
determined by the Committee. Subject to the foregoing, the Committee, in
fixing the Fair Market Value, shall have full authority and discretion and be
fully protected in doing so.
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4. Exercise of Options.
(a) Partial and Total Exercise. Subject to the terms of
Section 6 of this Agreement, the Option may be exercised for all or a part of
the Option Shares as provided in this Section 4(a). The Option shall not be
exercisable, either in whole or in part, prior to sixty (60) months from the
Grant Date. The Option shall not be exercisable after the Optionee ceases to
be employed by the Company.
The Option shall become exercisable sixty (60) months from the
Grant Date. The Optionee shall have three(3) months beyond this sixty (60)
month period to exercise the Option at the Exercise Price. If any part of the
Option has not been exercised after sixty-three (63) months from the Grant
Date, the unexercised portion immediately becomes null and void and no longer
of any force and effect.
(b) Termination of Employment Other Than By Reason of Death. In
the event that the Optionee shall cease to be employed by the Company for any
reason other than his death, a material disability or retirement with the
consent of the Company, the Option shall terminate immediately and become null
and void and no longer be of any force or effect.
If the termination is due to a material disability or retirement of
the Optionee with the consent of the Company, the Optionee shall have the
right to exercise the Option at the date of such termination of employment at
any time within three (3) months after such termination, subject to the
conditions that the Option shall not be exercisable after the expiration of
sixty-three (63) months from the date it was granted. Whether termination of
employment is due to a material disability or is to be considered a retirement
with the consent of the Company shall be determined by the Committee, which
determination, unless overruled by the Board of Directors, shall be final and
conclusive. Any disability to be considered "material" must result in a
permanent and total disability of an employee as defined in Code Section
22(e)(3), as amended, or if such Section is no longer of any force or effect,
an employee shall be deemed to be permanently and totally disabled if he is
unable to engage in any substantial gainful employment by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months.
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If the Optionee leaves the Company for any reason other than death,
material disability or Company approved retirement, before sixty-three (63)
months has expired from the Grant Date, the Option shall become null and void
and no longer of any force or effect.
(c) Death of Optionee. If the Optionee shall die while in the
employ of the Company or within a period of three (3) months after the
termination of his employment as a result of a Company approved retirement or
disability as determined in Section 4(b) above, the Option may be exercised in
whole or in part at any time within three (3) months after the Optionee's
death, by the executor or administrators of the Optionee's estate or by any
person or persons who shall have acquired the Option directly from the optionee
by bequest or inheritance, subject to the condition that the Option shall not
be exercisable after the expiration of sixty-three (63) months from the Grant
Date.
(d) Method of Exercising Option. The Option or any portion
thereof may be exercised by the Optionee by (i) delivering to the Company at
its main office (to the attention of its Vice President-Finance) written notice
which shall set forth the Optionee's election to exercise a portion or all of
the Option, the number of Option Shares with respect to which the Option rights
are being exercised and such other representations and agreements as may be
required by the Company to comply with applicable securities laws and (ii)
paying in full the purchase price of the Option Shares as set forth in Section
3(b), and (iii) remitting, in cash or its equivalent, to the Company the
federal income tax, state income tax and F.I.C.A. to be withheld by the Company
(in such amounts as may be determined by the Company) with respect to the
compensation to be recognized by the Optionee upon the exercise of the Option.
Upon receipt of such notice and payment, the Company shall issue and deliver to
the Optionee a certificate for the number of shares of Class A Stock with
respect to which the Option was so exercised.
(e) Nonassignability of Option. The Option shall not be
assignable or transferrable by the Optionee except by will or by the laws of
descent and distribution in accordance with Sections 4(b). Any distributee by
will or by the laws of descent and distribution shall be bound by the
provisions of this Agreement. During the life of the Optionee, the Option
shall be exercisable only by the Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of the Option, and any levy of
execution, attachment or similar process on the Option shall be null and void.
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(f) General Restrictions. The Option shall be subject to the
requirement that, if at any time the Board of Directors or the Committee shall
determine, in its discretion, that the listing, registration or qualification
of the Option Shares upon any securities exchange 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 issue or
purchase of Option Shares, 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 that are not
acceptable to the Board of Directors.
(g) Leave of Absence. If the Optionee goes on an approved
leave of absence, the Committee may make such provision respecting continuance
of the Option while the Optionee is on such leave of absence as it may deem
equitable, except that in no event shall the Option be exercised after the
expiration of sixty-three (63) months from the Grant Date.
5. Adjustments to Class A Stock Subject to Option. The number of
shares of Class A Stock covered by the Option, and the Exercise Price shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Class A Stock of the Company resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Class A Stock) or any other increase or decrease in the number of such shares
affected without receipt of consideration by the Company.
If the Company shall be the surviving corporation in any merger,
consolidation or reorganization, the Option shall pertain to and apply to the
same number and kind of securities to which the Optionee would have been
entitled had he then been the record holder of the number of shares of Class A
Stock subject to the Option. A dissolution or liquidation of the Company or a
merger, consolidation or reorganization (a) in which the Company is not the
surviving corporation, and (b) which does not contain appropriate provisions
for the substitution of options to purchase appropriate stock of the surviving
corporation, on an equitable basis, shall cause the Option to terminate,
provided that if the Optionee has held the Option for more than (1) year prior
to the effective date of such event, he shall have the right immediately prior
to such dissolution or liquidation, or merger, consolidation or reorganization
in which the Company is not the surviving corporation, to exercise the Option
in whole or in part, subject to the exception that the Option shall not
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be exercisable after the expiration of sixty-three (63) months from the date it
is granted.
In the event of a change in the Class A Stock of the Company, which is
limited to a change of all of its authorized shares with par value into the
same number of shares with a different par value, the shares resulting from any
such shares shall be deemed to be the Class A Stock within the meaning of this
Agreement.
To the extent that the foregoing adjustments relate to stock or securities
of the Company such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
Except as hereinbefore expressly provided in this Agreement, (a) the
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of Class A Stock or the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class or by reason
of any dissolution, merger, consolidation, reorganization or spinoff of assets
or stock of another corporation, and (b) any issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or Exercise Price of shares of Class A Stock subject to
the Option.
The grant of the Option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
6. Securities Laws - Restrictions on Issuance of Shares. No shares of
Class A Stock shall be issued or sold upon the exercise of the Option unless
and until (a) the full amount of the Exercise Price has been paid as provided
in Section 4(c) of this Agreement and (b) in accordance with Section 4(e) of
this Agreement, the then applicable requirements of the Securities Act of l933,
as amended, and the applicable securities laws of any state, as any of the same
may be amended, the rules and regulations of the Securities and Exchange
Commission and any other regulations of any securities exchange on which the
Class A Stock may be listed, (including, without limitation for such purposes,
NASDAQ) shall have been fully complied with and satisfied.
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7. No Rights as a Stockholder. The Optionee and any transferee of the
Option shall have no rights as a stockholder of the Company with respect to any
Option Shares until the date of the issuance of a stock certificate(s) to him
or her for the Option Shares. No adjustment shall be made 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 date
any such stock certificate is issued, except as provided in Section 4.
8. Interpretation of Option; Indemnification of Committee. The
interpretation and construction by the Committee of any provisions of this
Agreement or any terms of the Option shall be final unless otherwise determined
by the Board of Directors. No member of the Committee or the Board of
Directors shall be liable for any action or determination made in good faith
with respect to the Option. In addition to such other rights of
indemnification as they may have as Directors of the Company, the members of
the Committee shall be indemnified by the Company against the reasonable
expenses, including attorney's fees actually and necessarily incurred in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with
this Agreement or the Option, and against all amounts paid by them in
satisfaction of a judgment in any such proceeding, except in relation to
matters as to which it shall be adjudged in such action, suit, or proceeding
that the Committee member is liable for negligence or misconduct in the
performance of his duties; provided that within sixty (60) days after
institution of any such action, suit or proceeding, a Committee member shall in
writing offer the Company the opportunity at its own expense, to handle and
defend the same.
9. Application of Funds. The proceeds received by the Company from
the issuance of Class A Stock pursuant to the Option will be used for general
corporate purposes.
10. No Obligation To Exercise Option. The granting of the Option shall
impose no obligation upon the Optionee to exercise such Option.
11. Binding Effect. This Agreement shall be binding upon the executors,
administrators, heirs, legal representatives and successors of the parties
hereto.
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12. No Employment Rights. This Agreement shall not confer upon
Optionee any right with respect to the continuance of employment by the
Company, nor shall it interfere in any way with the right of the Company to
terminate such employment at any time.
13. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina.
14. Notices. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally or when received if mailed to the party to
whom notice is to be given, by certified mail, return receipt requested,
postage pre-paid, and addressed as follows, until any such address is changed
by notice duly given:
To Optionee at: The address indicated
on the signature page hereof
To Company at: Ingles Markets, Incorporated
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President-Finance
15. Enforcement. If any portion of this Agreement shall be determined
to be invalid or unenforceable, the remainder shall be valid and enforceable to
the extent possible.
16. Shareholder Approval. Notwithstanding anything in this Agreement to
the contrary, the Company shall have no obligation to issue any Option Shares
or any other consideration upon any exercise to the Option if the Shareholders
of the Company have not approved this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
INGLES MARKETS, INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chairman of the Board
and Chief Executive Officer
(CORPORATE SEAL)
OPTIONEE:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ (SEAL)
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Address: ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
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