Homeland Holding Corporation
1996 Stock Option Plan
1. Purpose. This Homeland Holding Corporation 1996 Stock
Option Plan ("Plan") is intended as to encourage stock ownership by the
officers and the employees of Homeland Holding Corporation ("Holding")
and its subsidiaries in order to increase their proprietary interest in
the success of Homeland Holding Corporation. The term "Homeland" means
Holding and its subsidiaries.
2. Administration. The Plan shall be administered by the
Board of Directors of Holding ("Board") or, if the Board decides that
the Plan should be so administered, by a committee ("Committee") of at
least two (2) members of the Board appointed by the Board. Upon the
appointment of a Committee, the Board of Directors shall cease to
administer the Plan and the Committee shall administer the Plan.
The Board or, if there is a Committee, the Committee shall
determine the persons who may participate in the Plan and, subject to
the provisions of the Plan, the extent, the terms and the conditions of
their participation.
The interpretation and the construction by the Board or, if
there is a Committee, the Committee of any provision of the Plan or any
option granted under the Plan and any determination by the Board or, if
there is a Committee, the Committee pursuant to any provision of the
Plan or any such option shall be final and conclusive. No member of the
Board or the Committee, if any, shall be liable for any action or any
determination taken or made in good faith and the members of the Board
and the Committee, if any, shall be entitled to indemnification and
advancement of expenses as provided in the Bylaws of Holding.
3. Stock. The capital stock subject to options under the
Plan shall be authorized but unissued shares of Common Stock, par value
$0.01 per share ("Common Stock"), of Holding, subject to adjustment in
accordance with the Plan. Subject to adjustment in accordance with the
Plan, the total number of shares of Common Stock on which options may be
granted under the Plan may not exceed, in the aggregate, 263,158 shares.
If any option outstanding under the Plan expires or terminates for any
reason prior to the end of the period during which options may be
granted under the Plan, the shares of Common Stock covered by the
unexercised portion of such option may again be subject to an option
under the Plan.
4. Terms and Conditions of Stock Options. Options which are
granted under the Plan shall be "non-qualified options." Options which
qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code of 1986, as amended may not be granted under the Plan.
All of the options granted under the Plan shall comply with,
and be subject to the following provisions:
4.1. Eligibility. The individuals who are eligible to
receive options under the Plan are the officers and the employees
of Homeland.
4.2. Option Price. The option price for each option shall
be not less than the fair market value as determined in accordance
with Section 5.
4.3. Term of Option. Any option granted under the Plan
shall expire and terminate on, and shall not be exercisable after,
the earliest of (a) ten (10) years from the date the option is
granted; (b) termination of the optionee's employment for cause;
and (c) forty-five (45) days after termination of the employment of
an optionee other than for cause.
Termination of employment for cause means termination due
to (a) any act of moral turpitude by an officer or an employee
which has or may have an adverse effect on Homeland or its
business, including, without limitation, commission of a felony;
(b) disloyalty to Homeland; (c) the failure or inability of an
officer or an employee to perform the duties assigned to the
officer or the employee as determined by Holding; or (d) a material
breach by an officer or an employee of the terms of his or her
employment.
4.4. Medium and Time of Payment. The Board or, if there
is a Committee, the Committee shall determine the medium and the
time of payment of the exercise price of each option granted under
the Plan. Unless the Board or the Committee otherwise determines,
the exercise price shall be paid in cash at the time at which the
option is exercised.
If so determined by the Board or the Committee, the
exercise price may (a) be paid in cash; (b) be paid by transferring
to Holding shares of Common Stock equal in value (as determined by
the Board or, if there is a Committee, the Committee) to the
exercise price; or (c) be paid in cash in an amount equal to the
par value of the shares of Common Stock with a binding obligation
to pay the balance of the exercise price on terms and subject to
conditions determined by the Board or, if there is a Committee, by
the Committee. The Board or, if there is a Committee, may at the
time that it grants an option, in its sole discretion, grant an
optionee the right to convert an unexercised option to a cash
payment equal to the difference between the exercise price and the
fair market value of the shares of Common Stock covered thereby on
the date of conversion (as determined in accordance with Section
5).
4.5. Written Agreement. Each option shall be evidenced
by a written agreement, which shall state, inter alia, the total
number of shares of Common Stock covered thereby.
4.6. Date of Exercise. The date on which options are
exercisable shall be determined by the Board or, if there is a
Committee, by the Committee. Unless the Board or the Committee
otherwise determines, each option shall become exercisable at a
rate equal to 20% of the number of shares covered thereby on the
first anniversary, 20% of the number of shares covered thereby on
the second anniversary, 20% of the number of shares covered thereby
on the third anniversary, 20% of the number of shares covered
thereby on the fourth anniversary and 20% of the number of shares
covered thereby on the fifth anniversary. After becoming
exercisable, an option may be exercised at any time and from time
to time in whole or in part until expiration or termination of the
option.
If there is a change in control of Holding, all options
granted under this Plan shall be immediately exercisable and each
optionee shall have the right to exercise the optionee's option at
any time prior to the expiration of the option.
The term "change of control" means (a) the earliest date
a new shareholder or related group of new shareholders acquires
beneficial ownership of 30% or more of the then issued and
outstanding Common Stock, (b) the date on which Holding ceases to
own all of the issued and outstanding capital stock of Homeland
Stores, Inc. or (c) the date on which Holding or Homeland Stores,
Inc. disposes of 50% or more of its assets.
4.7. Adjustments. The Board or, if there is a Committee,
the Committee may adjust the number and kind of shares covered by
each outstanding option and the price per share thereof for each
outstanding option as the Board or the Committee, as the case may
be, determines, in its sole discretion and good faith, is equitably
required to prevent dilution or enlargement of the rights of
optionees that would otherwise result from (a) any stock dividend,
stock split, combination of shares, recapitalization or other
change in the capital structure of Homeland; (b) any merger,
consolidation, separation, reorganization or partial or complete
liquidation; or (c) any other corporate transaction or event having
an effect similar to any of the foregoing events.
The Board or, if there is a Committee, the Committee may
adjust the number or kind of shares on which options may be granted
to persons participating under the Plan as the Board or, if there
is a Committee, the Committee, as the case may be, determines, in
its sole discretion and in good faith, is appropriate to reflect
any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of
Homeland.
No fractional shares shall be issued upon any exercise of
an option following an adjustment and the aggregate price paid
shall be appropriately reduced on account of any fractional share
not issued.
4.8. Assignability. No option is assignable or
transferable except by will or by the laws of descent and
distribution. During the lifetime of an optionee, an option is
exercisable only by the optionee.
4.9. Optionee's Agreement. If, at the time of the
exercise of any option, it is necessary, appropriate or advisable,
in order to comply with any applicable laws or regulations relating
to the sale of securities, that an optionee exercising an option
agree that the optionee will purchase the shares of Common Stock
covered by the option for investment and not with any present
intention to resell those shares or make other agreements, the
optionee will execute and deliver to Holding an agreement in form
and substance requested by Holding.
4.10. Rights as a Shareholder. An optionee has no
rights as a shareholder with respect to shares covered by an option
until the date of the issuance of the shares of Common Stock to the
optionee and only after such shares are fully paid.
4.11. Other Provisions. The written agreements
required under the Plan may contain such other terms and conditions
as the Board or, if there is a Committee, the Committee deems
appropriate or advisable.
5. Fair Market Value. Fair market value shall be determined
by the Board or, if there is a Committee, the Committee as provided in
this Section 5.
The term "fair market value" shall mean (a), if the shares are
listed on a national securities exchange, the closing price on the date
on which the fair market value is to be determined or, if none of the
shares were traded on that date, on the immediately preceding date on
which shares were traded; (b), if the shares are quoted on an
inter-dealer quotation system, the closing "asked" price on the date on
which fair market value is to be determined or, if such closing "asked"
price is not available, the last sales price on such date or, if no
shares were traded on such date, on the immediately preceding date on
which shares were traded; or (c), if the shares are not listed on a
national securities exchange or quoted on an inter-dealer quotation
system, the value determined by the Board or the Committee, as the case
may be, taking into account such factors reflecting value as they deem
appropriate.
6. Term of Plan. No stock option shall be granted pursuant
to the Plan after December 9, 2006.
7. Amendments. The Board may from time to time amend,
suspend, or discontinue the Plan or amend any option granted thereunder;
provided, however, no such action of the Board may, without approval of
the shareholders, alter the provisions of the Plan so as to (a)
materially increase the benefits accruing to participants under the
Plan; (b) materially increase the number of securities which may be
issued under the Plan; or (c) materially modify the requirements as to
eligibility for participation in the Plan and no amendment may, without
the consent of the optionee, affect any then outstanding options or
unexercised portions thereof.
8. No Obligation to Exercise Option. The granting of an
option does not impose any obligation upon the optionee to exercise the
option.
Form of Stock Option Agreement
Homeland Holding Corporation
Stock Option Agreement
(Non-Qualified Stock Option)
This Stock Option Agreement ("Agreement") is made this
day of , 199 , by and between Homeland Holding Corporation,
a Delaware corporation ("Holding"), and
, an officer and/or an employee
of Holding or a subsidiary thereof ("Holder").
In consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, Holding and the Holder
agree as follows:
1. Grant of Stock Option. Holding hereby grants to the Holder
the right and option ("Option") to purchase an aggregate of
shares of Common Stock, par value $0.01 per share ("Common Stock"), of
Holding on the terms and subject to the conditions set forth in the
Homeland Holding Corporation 1996 Stock Option Plan ("Plan"), which is
incorporated by reference in this Agreement, and in this Agreement.
2. Purchase Price. The purchase price of the shares of
Common Stock subject to the Option shall be $ per share.
3. Option Vesting Schedule. The Option shall be exercisable
as follows:
Number of Shares First Date of Exercise
Such shares may be purchased either in whole or in part at any
time and from time to time on or after the First Date of Exercise and
prior to the Expiration Date, as defined below. The First Date of
Exercise will be accelerated as provided in Section 4.6 of the Plan.
The Board of Directors of Holding ("Board") or, if there is a
Stock Option Committee ("Committee"), the Committee may accelerate the
vesting of the Option, subject to the limitations contained in the Plan.
4. Term of Option. The Option shall expire and terminate on
the earliest of (a) ten (10) years from the date the Option is granted;
(b) termination of the Holder's employment for cause; and (c) forty-five
(45) days after the termination of the Holder's employment other than
for cause ("Expiration Date").
If the Holder dies or becomes disabled while in the employment
or service of Holding or any subsidiary thereof or within the period of
time after termination of employment or service during which the Holder
is entitled to exercise the Option, the legal representative of the
Holder shall have the right to exercise the Option during the period
which the Holder is entitled to exercise the Option.
The Holder shall have none of the rights of a shareholder with
respect to the shares of Common Stock subject to the Option until the
date of issuance of the shares to the Holder and only after such shares
are fully paid.
5. Nontransferability. The Option is not assignable or
transferable by the Holder, other than by will or the laws of descent
and distribution. During the life of Holder, the rights of the Holder
under this Agreement may be exercised only by the Holder. Any attempted
assignment or transfer, voluntarily or by operation of law, that is not
permitted by this Section 5 shall be null and void and without effect.
6. Adjustments. The Board or, if there is a Committee, the
Committee may adjust the number and kind of shares covered by the Option
and the price per share thereof as the Board or the Committee, as the
case may be, determines, in its sole discretion and good faith, is
equitably required to prevent dilution or enlargement of the rights of
the Holder that would otherwise result from (a) any stock dividend,
stock split, combination of shares, recapitalization or other change in
the capital structure of Holding; (b) any merger, consolidation,
separation, reorganization or partial or complete liquidation; or (c)
any other corporate transaction or event having an effect similar to any
of the foregoing events.
7. Investment Intent. The Holder represents and agrees for
the Holder and the Holder's legal representatives that any shares
purchased under the Option will be acquired for investment only and not
with a view to distribution.
8. Exercise of Option. The Option may be exercised by
delivering to the Secretary of Holding notice in writing (in form
satisfactory to Holding) of the Holder's election to exercise the Option
for a specified and permitted number of shares of Common Stock and by
paying to Holding, in the form designated by the Board or, if there is a
Committee, by the Committee, the purchase price for the shares of Common
Stock for which the Option is being exercised.
9. Governing Law; Interpretation. This Agreement shall be
subject to, and governed by, the laws of the State of Oklahoma
irrespective of the fact that one or more of the parties now is, or may
become, a resident of a different state. The Option is subject to the
terms and conditions of the Plan, a copy of which may be examined during
the business hours of Holding at its principal offices in Oklahoma City,
Oklahoma. To the extent there is any conflict or inconsistency between
the Plan and this Agreement, the Plan shall control. Any question of
interpretation or construction of the Plan or this Agreement shall be
determined by the Board or, if there is a Committee, the Committee and
such determination shall be final and binding upon Holding and the
Holder.
10. Section Headings. Section headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, Holding has caused this Agreement to be
duly executed by its officers thereunto duly authorized, and the Holder
has hereunto set the Holder's hand and seal, all on the day and year
first above written.
Homeland Holding Corporation
By:
Name:
Title:
Name: