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EXHIBIT 10.23
EXHIBIT A
TANDY BRANDS ACCESSORIES, INC.
1997 EMPLOYEE STOCK OPTION PLAN
Section 1. Establishment. Tandy Brands Accessories, Inc., a Delaware
corporation, hereby establishes the Tandy Brands Accessories, Inc. 1997 Employee
Stock Option Plan (the "Plan") for officers and key employees of the Company.
Options granted to an optionee under the Plan shall be either "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1996,
as amended, or nonqualified options.
Section 2. Purpose. The purpose of the Plan is to strengthen the ability of
the Company (as hereinafter defined) to attract and retain senior executives and
other key employees by providing a means for officers, management and other key
employees of the Company to acquire a proprietary interest in the Company and a
direct participation in the growth of the Company through ownership of common
stock of Tandy Brands Accessories, Inc. The Plan will furnish additional
incentive to those persons responsible for the successful management of the
Company, and thereby serve as an incentive for long and short-term management
objectives intended to enhance stockholders' investments in the Company.
Section 3. Definitions.
(a) "Board" means the Board of Directors of Tandy Brands
Accessories, Inc.
(b) "Change of Control" shall have the meaning set forth in Section
12(b) hereof.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(d) "Committee" means the Compensation and Human Resources
Committee of the Company or such other committee as may be designated by
the Board to administer the Plan. The Committee shall consist of not less
than two persons who are "non-Employee Directors" (as that term is defined
in Rule 16(b)-3 (or any successor to such rule) promulgated under the
Exchange Act) and who are also "outside directors" (as that term is defined
under Section 162(m) of the Code and such Treasury regulations as may be
promulgated thereunder). All members of the Committee will serve at the
pleasure of the Board.
(e) "Company" means, unless the context otherwise requires, Tandy
Brands Accessories, Inc., a Delaware corporation, and its Subsidiaries, if
any, or its successors.
(f) "Date of Grant" means the date on which an Option is granted as
determined in accordance with the rules set forth in Treasury regulation
Section 1.421-7(c).
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(g) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(h) "Fair Market Value" means the fair market value of the Stock,
determined as follows:
(i) if the Stock is actively traded on any national securities
exchange or is included on the National Market System of the
National Association of Securities Dealers Automated Quotation
System, Fair Market Value shall be the average of the high and low
prices of the Stock as reported for the date the Option is granted
or, if no sale of the Stock shall have been made on that day, the
next preceding day on which there was a sale of Stock; or
(ii) if the price for the Stock is not reported in the manner
described in subsection (i) above, Fair Market Value shall be
determined by the Committee.
(i) "Incentive Stock Option" means an Option granted under the Plan
which is designated by the Committee as an incentive stock option and which
complies with the requirements of Section 422 of the Code, as amended from
time to time.
(j) "Nonqualified Option" means an Option granted under the Plan
which is not an Incentive Stock Option.
(k) "Option" means an award granted by the Committee to an employee
under the Plan in the form of a right to purchase Stock, evidenced by a
Stock Option Agreement containing such provisions as the Committee may
establish.
(l) "Stock" means the common stock, $1.00 par value per share, of
Tandy Brands Accessories, Inc.
(m) "Stock Option Agreement" means the agreement, entered into
between the Company and an optionee, evidencing an Option.
(n) "Subsidiary" shall have the meaning set forth in Section 424(f)
of the Code.
Section 4. Administration. The Plan shall be administered by the Committee,
which shall have the following powers:
(a) As to each Option, the Committee shall have the full and final
authority in its discretion to determine: (i) whether the Option shall be
an Incentive Stock Option or a Nonqualified Option or both; (ii) the number
of shares of Stock subject to each Option; (iii) the time or times at which
Options shall be granted; (iv) the exercise price of the shares of Stock
subject to each Option, which price shall not be less than the minimum
price specified in Section 7 of this Plan; and (v) the time or times when
each Option shall become exercisable and the duration of the exercise
period, which shall not exceed the maximum period specified in Section 7.
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(b) As to the Plan, the Committee shall have the authority (i) to
exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan and any Stock Option Agreements executed
pursuant to Section 7, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, (iv) to make all determinations necessary
or advisable in administering the Plan, and (y) to correct any defect,
supply any omission and reconcile any inconsistency in the Plan.
(c) The determination of the Committee on all matters relating to
the Plan or any Stock Option Agreement shall be conclusive.
Section 5. Eligibility.
(a) Options may be granted only to employees of the Company who are
officers or persons whose principal duties consist of supervising the work
of other employees of the Company or who are otherwise key employees of the
Company. A director, as such, shall not be considered an officer or
employee for purposes of the Plan, but a person otherwise eligible to
participate in the Plan shall not be disqualified by virtue of being a
director of the Company. Neither the members of the Committee nor any
member of the Board who is not an employee shall be eligible under the
Plan.
(b) No Incentive Stock Option may be granted to any individual who
owns (subject to applicable ownership attribution rules of Section 424(d)
of the Code and the regulations promulgated thereunder) Stock possessing
ten percent (10%) or more of the total combined voting power or value of
all classes of stock of Tandy Brands Accessories, Inc. or of any Parent (as
such term is defined in Section 424(c) of the Code) or Subsidiary.
(c) In selecting individual employees to whom Options shall be
granted as well as in determining the number of shares of Stock subject to,
and the conditions, type, terms and provisions of, each Option, the
Committee shall seem such factors as are relevant to accomplish the purpose
of the Plan as stated in Section 2.
Section 6. Stock Available Under the Plan.
(a) Subject to the provisions of Section 11 of this Plan the
aggregate number of shares of Stock for which Options may be granted under
the Plan shall not exceed 300,000 shares. The shares to be delivered upon
exercise of Options shall be made available, at the discretion of the
Committee, either from the authorized but unissued shares or from
previously issued and reacquired shares of Stock held by the Company as
treasury shares.
(b) If an Option granted under this Plan shall expire or terminate
unexercised as to any shares covered thereby, such shares shall thereafter
be available for the granting of other Options under this Plan.
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Section 7. Terms and Conditions of Options. Each Option granted under the
Plan shall be evidenced by a Stock Option Agreement in such form not
inconsistent with the Plan as the Committee shall determine provided that such
Stock Option Agreement clearly and separately identifies Incentive Stock Options
and Nonqualified Options and that the substance of the following terms and
conditions shall be included therein:
(a) Exercise Price. The price at which each share of Stock covered
by such Option may be purchased shall be determined by the Committee and
shall not be less than One Hundred Percent (100%) of the Fair Market Value
of the Stock on the Date of Grant.
(b) Nontransferable. The portion of the Option that is an Incentive
Stock Option and any right related thereto shall not be transferable by the
optionee otherwise than by will or the laws of descent and distribution.
The portion of an Option that is an Incentive Stock Option may be
exercised, during the optionee's lifetime, only by the optionee or by the
optionee's duly appointed guardian or personal representative. The portion
of an Option that is a Nonqualified Option may be transferred subject to
the Plan and the Stock Option Agreement evidencing such Option. In such
case, references herein to the optionee shall include a permitted
transferee.
(c) Exercise of Option. Subject to subsections (e) and (f) below,
the Option and any right related thereto, if exercisable by the
optionee, may be exercised (subject however, to the provisions of
Section 9) only if the optionee has been an employee of the Company
at all times during the period beginning with the Date of Grant of
the Option and ending on the day three (3) months before the date
of such exercise; provided however, that in the case of an optionee
who terminates employment with the Company due to total and
permanent disability, the three (3) months shall be extended to
twelve (12) months. Upon the retirement of any optionee, the
Committee may in its discretion accelerate the dates at which
remaining installments of Options may be exercised to the date of
retirement, Options granted to an employee under the Plan shall not
be affected by any change of duties or position so long as the
optionee continues to be an employee of the Company.
(d) Term of Options. No Option shall be exercisable after the
expiration of ten (10) years from its Date of Grant.
(e) Death of Optionee. In the event of the death of an optionee
while the optionee is in the employ of the Company, any Option then held by
the optionee shall be exercisable only within the twelve (12) months next
succeeding such death, and then only by the executor or administrator of
the optionee's estate or by the person or persons to whom the optionee's
rights under the Option shall pass by the optionee's will or the laws of
descent and distribution; provided that in no event shall an Option be
exercisable more than ten (10) years after the Date or Grant.
(f) Termination for Cause. In the event that any optionee shall be
dismissed from the employ of the Company for any reason which, in the
opinion of the Board (or
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the Committee if so authorized by the Board), shall constitute good cause
for dismissal, any Option held by such person at such time shall
automatically terminate as of such dismissal. The decision of the Board (or
the Committee if so acting) as to what shall constitute good cause for
dismissal shall be final and binding upon all concerned.
(g) Execution of Stock Option Agreement. After the effective date
of the Plan (as set forth hereinafter), the Committee may grant Options
pursuant to the Plan at any time. Within thirty (30) days after the Date of
Grant, the Company shall notify the optionee of the grant of the Option,
and submit to the optionee a Stock Option Agreement duly executed by and on
behalf of the Company, with the request that the optionee execute and
return the Stock Option Agreement within thirty (30) days thereafter. If
the optionee shall fail to return the executed Stock Option Agreement
within such thirty (30) day period, such person's Option shall
automatically terminate.
Section 8. Limitation on Incentive Stock Options.
(a) Limitation on Grant. The aggregate Fair Market Value
(determined as of the Date of Grant) of Stock with respect to which
Incentive Stock Options are exercisable for the first time by an optionee
during any calendar year (under all such plans of the optionee's employer
corporation and its parent and subsidiary corporations) shall not exceed
One Hundred Thousand Dollars ($100,000). In the event the limits of this
Section 8(a) would otherwise be exceeded, such Option to the extent of such
excess, shall be deemed to be a Nonqualified Option.
(b) Limitation on Disposition. To maintain special tax treatment
for Incentive Stock Options, an optionee may not dispose of the Stock
acquired pursuant to the exercise of an Incentive Stock Option within two
(2) years from the Date of Grant nor within one (1) year after the optionee
receives the Stock following exercise of the Incentive Stock Option. This
limitation on disposal does not apply to Stock acquired pursuant to the
exercise of an Incentive Stock Option after an optionee's death by his or
her estate or heirs, as applicable, or to Stock acquired by the optionee
pursuant to the exercise of an Incentive Stock Option prior to his or her
death.
Section 9. Exercise of Options and Payment.
(a) Periods of Exercise. An Option shall be exercisable in whole or
in part at such times as may be determined by the Committee and stated in
the Stock Option Agreement; provided that no Option shall be exercisable
before the first anniversary of the Date of Grant (except in the event of
death, total and permanent disability or a Change of Control as set forth
herein), and no Option shall be exercisable after the tenth (10th)
anniversary of the Date of Grant. The Committee shall have the authority to
prescribe upon the granting of an Option the schedule under which Options
will become exercisable by each optionee and the conditions of any such
exercise. Except as provided in Section 7, to the extent that any
installment of an Option has become exercisable it may be exercised
thereafter, until termination of the Option, in whole or in part at any
time or from time to time.
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(b) Notice of Exercise. An Option shall be exercised by written
notice of exercise, in the form prescribed by the Committee, delivered to
the Company in such manner as the Committee may designate. The notice shall
specify the number of shares for which the Option is being exercised and
whether the Option being exercised is an Incentive Stock Option or a
Nonqualified Option. Each such exercise shall be irrevocable when given.
(c) Payment. Payment for the shares shall be either in cash or, at
the election of the optionee and subject to the approval of the Committee,
by the delivery of Stock already owned by the optionee having an aggregate
fair market value equal to the number of shares with respect to which such
Option is exercised multiplied by the exercise price per share, or a
combination of cash and Stock as the Committee may in its discretion
approve; provided, that the Committee may, in the Stock Option Agreement,
impose whatever restrictions it deems necessary or desirable with respect
to the payment for shares by the delivery of Stock already owned by the
optionee. The fair market value of Stock delivered in payment of the Option
price shall be determined in the same manner as set forth in Section 3(h),
except that such determination shall be made on the date of exercise of the
Option. An Option shall be deemed exercised an the date such payment and
the written notice of exercise contemplated by subsection (b) above are
received by the Secretary of the Company.
(d) Issuance of Certificates. An Option shall be exercisable for
the purchase of shares of Stock only upon payment to the Company of the
full purchase price of the Stock with respect to which the Option is
exercised as provided elsewhere herein. However, the Company shall not be
required to issue or deliver any certificates for shares of Stock purchased
upon the exercise of an Option prior to: (i) the obtaining of any approval
from any governmental agency which the Company shall, in its sole
discretion, determine to be necessary or advisable; (ii) the completion of
any registration or other qualification of such shares under any state or
federal law or ruling or regulation of any governmental body which the
Company shall, in its sole discretion, determine to be necessary or
advisable; and (iii) the determination by the Committee that the optionee
has tendered to the Company any federal, state or local tax owed by the
optionee as a result of exercising the Option, when the Company has or may
have a legal liability to satisfy such tax. In addition, if Stock reserved
for issuance upon the exercise of Options shall not then be registered
under the Securities Act of 1933, the Company may, upon exercise of an
Option, require the holder thereof to represent in writing that the shares
being acquired are for investment and not with a view to distribution
thereof, and may mark the certificate(s) for the shares with a legend
restricting transfer and may issue stop transfer orders relating to such
certificate(s) to the transfer agent. The Company shall not be liable for
damages due to delay in the issuance or delivery of any stock certificate
for any reason whatsoever. Furthermore, the Company shall not be liable to
any optionee for refusing to deliver shares of Stock if such refusal is
based upon the provisions of this Section 9(d).
(e) Fractional Shares. The Company shall not be required to issue
any fractional shares upon exercise of any Option, but in lieu thereof the
Company shall pay
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cash equal to the same fraction of the fair market value of one share of
Stock (determined as provided in Section 3(h) on the date such Option is
exercised).
Section 10. Other Conditions.
(a) Nothing contained in the Plan, any Option or any Stock Option
Agreement shall confer upon any optionee any right with respect to
continuance of employment by the Company, nor interfere in any way with the
right of the Company to terminate the optionee's employment at will or
change the optionee's compensation at any time.
(b) No holder of an Option shall, by virtue of holding such Option,
be entitled to any rights of a stockholder in the Company.
(c) An optionee shall not be considered a record holder of any
shares of Stock purchased pursuant to the exercise of an Option for any
purpose until the date on which such Stock is registered in such optionee's
name upon the stock records of the Company.
Section 11. Adjustments Upon Changes in Stock.
(a) In the event that the outstanding shares of Stock are hereafter
increased or decreased or changed into or exchanged for a different number
of shares or kind of shares or other securities of the Company or of
another corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split, combination of shares, or
a dividend payable in Stock, the number and kind of shares reserved for
issuance under the Plan, but not yet covered by an Option, shall be
automatically adjusted to reflect such change. In addition, there shall be
an appropriate adjustment in the number and kind of shares then subject to
any Option, to the end that the optionee's proportionate interest shall be
maintained as before the occurrence of such event, and such adjustment of
outstanding Options shall be made with a corresponding adjustment in the
exercise price per share; provided, however, that each such adjustment in
the number and kind of shares subject to outstanding Options, including any
adjustment in the exercise price, shall be made in such manner as not to
constitute a modification as defined in Section 425 of the Code. The
determination of any adjustment by the Committee shall be conclusive.
(b) The grant of an 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, sell, or transfer all or any
part of its business or assets
Section 12. Changes of Control; Acceleration of Right to Exercise.
(a) Notwithstanding anything in the Plan or any Stock Option
Agreement to the contrary, in the event a Change of Control occurs, each
Option shall become exercisable, during the period beginning on the date of
the occurrence of such Change of Control and ending on the sixtieth (60th)
day following such date, for the purchase of the full number of shares of
Stock subject to such Option.
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(b) "Change of Control" shall mean the occurrence of any of the
following events:
(i) any "person" or "group" of persons, as such terms are used in
Sections 13 and 14 of the Exchange Act, other than any employee benefit
plan sponsored by the Company, becomes the "beneficial owner", as such term
is used in Section 13 of the Exchange Act, of thirty percent (30%) or more
of the outstanding shares of the Company's stock entitled to vote for the
election of directors; or
(ii) any shares of any class of the Company's stock are purchased
pursuant to a tender or exchange offer other than an offer by the Company;
or
(iii) the dissolution or liquidation of the Company or the
consummation of any merger or consolidation of the Company or any sale or
other disposition of all or substantially all of its assets, if the
stockholders of the Company immediately before such transaction own,
immediately after consummation of such transaction, equity securities
(other than options and other rights to acquire equity securities)
possessing less than thirty percent (30%) of the voting power of the
surviving or acquiring corporation.
Section 13. Plan Amendments and Termination.
(a) The Board may at any time terminate the Plan or make such
amendments thereto as it shall deem advisable and in the best interests of
the Company, without further action on the part of the stockholders of the
Company, provided, however, that no such termination or amendment shall,
without the consent of the individual to whom any Option shall theretofore
have been granted, affect or impair the rights of such individual under
such Option, and provided, further, any amendment shall be approved by the
Stockholders of the Company if the amendment would:
(1) increase the number of shares for which Incentive Stock Options
may be issued under the Plan; or
(2) modify the requirements as to eligibility to receive Incentive
Stock Options under the Plan.
(b) No Options shall be granted under the Plan after ten (10) years
from the effective date of the Plan.
Section 14. Effective Date.
This Plan shall become effective immediately upon adoption by the Board;
provided, however, no Option shall constitute an Incentive Stock Option unless
the Plan is approved by the affirmative vote of a majority of the outstanding
shares of the Company present and entitled to vote at a meeting of the
stockholders at which a quorum is present within one (1) year before or after
the Plan's approval by the Board. If the required stockholder approval is not
received within such time period, any Incentive Stock Options awarded in the
intervening period shall be
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deemed to be Nonqualified Options. The Board shall not adopt the plan until
advised by counsel that all other applicable legal requirements incident to the
establishment and operation of the Plan have been complied with.
Section 15. No Liability for Good Faith Determinations. Neither the members
of the Board nor any member of the Committee shall be liable for any act,
omission or determination taken or made in good faith with respect to the Plan
or any Option.
Section 16. No Obligation to Exercise Option.
The granting of an Option shall impose no obligation on the optionee to
exercise such Option.
Section 17. Restrictions Applicable to Named Executive Officers.
The provisions of this Section 17 shall apply only to those executive
officers (i) whose compensation is required to be reported in the Company's
proxy statement pursuant to Item 402(a)(3)(i) and (ii) (or any successor
thereto) of Regulation S-K (or any successor thereto) under the general rules
and regulations under the Exchange Act and (ii) whose total compensation is
determined by the Board to possibly be subject to the limitations on deductions
imposed by Section 162(m) of the Code ("Named Executive Officers"). In the event
of any inconsistencies between this Section 17 and the other Plan provisions as
they pertain to Named Executive Officers, the provisions of this Section 17
shall control.
(a) No amendment of this Plan with respect to any Named Executive
Officer may be made which would (i) increase the maximum amount that can be
paid to any one Participant pursuant to this Plan or (ii) modify the
requirements as to eligibility for participation in this Plan, unless the
Company's stockholders have first approved such amendment in a manner which
would permit the deduction under Section 162(m) (or any successor thereto)
of the Code of such payment in the fiscal year it is paid. The Board shall
amend this Section 17 and such other provisions as it deems appropriate, to
cause amounts payable to Named Executive Officers to satisfy the
requirements of Section 162(m) (or any successor thereto) and the Treasury
regulations promulgated thereunder.
(b) Notwithstanding any provision of this Plan (including the
provisions of this Section 17) to the contrary, the amount of compensation
which a Named Executive Officer may receive with respect to Options which
are granted hereunder is based solely on an increase in the value of the
applicable shares of Stock after the date of grant of such Award. Thus, no
Option may be granted hereunder to a Named Executive Officer with an
exercise price less than the Fair Market Value of the shares of Stock on
the date of grant. Furthermore, the maximum number of shares of Stock with
respect to which Options may be granted hereunder to any Named Executive
Officer during any calendar year may not exceed fifty thousand (50,000)
shares, subject to adjustment as provided in Section 11 hereunder.
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EMPLOYEE STOCK OPTION AGREEMENT
PURSUANT TO THE
TANDY BRANDS ACCESSORIES, INC. 1997 EMPLOYEE STOCK OPTION PLAN
THIS EMPLOYEE STOCK OPTION AGREEMENT (the "Agreement") is made this _____
day of ___________, 19___, between TANDY BRANDS ACCESSORIES, INC., a Delaware
corporation (the "Company"), and _____________________ an employee of the
Company or one or more of its subsidiaries (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to carry out the purposes of the Tandy Brands
Accessories, Inc. 1997 Employee Stock Option Plan (the "Plan") by affording
Employee the opportunity to purchase shares of the common stock, $1.00 par value
per share ("Common Stock"), of the Company.
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 (the
"Shares") of Common Stock. such Shares being subject to adjustment as provided
in Paragraph 8 hereof, on the terms and conditions herein set forth. Of the
Shares covered by this Option, ________ shares (the "ISO Shares") are subject to
an Incentive Stock Option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and ________ shares (the "NQO
Shares") are subject to a Nonqualified Option.
2. Purchase Price. The purchase price of the Shares shall be $___________
per Share, such purchase price being 100% of the Fair Market Value (as defined
in the Plan) of the 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 20% of the entire number of ISO Shares at any time after the first
anniversary of the Date of Grant, and an additional 20% of the total ISO
Shares on or after each of the four (4) succeeding anniversaries of the
Date of Grant
B. NQO Shares: Unless expired as provided in Paragraph 5 below, and
subject to the special provisions of Paragraph 6 below, the Option for NQO
Shares may be exercised from time to time in whole or in part for not more
than 20% of the entire
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number of NQO Shares at any time after the first anniversary of the Date of
Grant, and an additional 20% of the total NQO Share on or after each of the
four (4) 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
than specify the number of respective ISO Shares and NQO Share sought to be
exercised pursuant to the notice. 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 Shares. The purchase price may be paid in cash
by certified or bank cashiers check, or, subject to approval of the
Committee (as defined in the Plan), by the surrender of stock certificates
representing Common Stock already owned by Employee having an aggregate
fair market value on the date of exercise equal to the purchase price of
the Shares, or by a combination of cash and Common Stock already owned by
Employee. In the event Employee wishes to pay all or any portion of the
purchase price by delivering shares of Common Stock. Employee shall, not
less than fourteen (14) days prior to the date of exercise, give written
notice to the Secretary of the Company requesting approval of such payment
method, setting forth the particulars of the proposed payment method. The
Committee shall approve, disapprove or modify the proposed payment method
within fourteen (14) days of its receipt of the request. The failure of the
Committee to respond to the request within the time period required shall
be deemed an approval of Employee's proposed payment method.
C. Upon receipt of the purchase price, and subject to the terms of
Paragraph 11, the certificate or certificates representing the Shares
purchased shall be registered in the name of the person or persons so
exercising the Option. If the Option shall be exercised by Employee and, if
Employee shall so request in the notice exercising the Option, the Shares
shall be registered in the name of Employee and another person. as joint
tenants with right of survivorship, and shall be delivered as provided
above to or upon the written order of the person or persons exercising the
Option. In the event the Option shall be exercised pursuant to Paragraph 7
hereof, 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 that shall be
purchased upon the exercise of the Option as provided herein shall be fully
paid and nonassessable.
5. Expiration of Option. The Option shall expire and become null and void
upon the happening of whichever of the following events shall first occur: (a)
expiration of three (3) months after Employee ceases to be employed by the
Company or any of its subsidiaries for any reason other than termination for
cause, or due to death or total and permanent disability; (b) a period of twelve
(12) months shall have elapsed since Employee's death or total and permanent
disability; (c) a period of ten (10) years shall have elapsed since the Date of
Grant; or
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(d) Employee's employment shall have been terminated for cause as determined by
the Committee or the Board of Directors of the Company. Except as provided in
Paragraph 6, only those portions of the Option exercisable as of the date of
termination of Employee's employment may be exercised, whether such termination
is by retirement or otherwise.
6. Acceleration of Exercise Dates. Notwithstanding the provisions of
Paragraph 3 above relating to the exercise of the Option in installments: (a)
upon Employee's death or total disability this Option shall be immediately
exercisable, until the expiration date provided in Paragraph 5 above, for the
entire number of Shares covered hereby, (b) upon Employee's retirement, the
Committee may, in its discretion, permit this Option to be immediately
exercisable, until the expiration date provided in Paragraph 5 above, for the
entire number of Shares covered hereby; and (c) upon any Change of Control of
the Company (as defined in the Plan) this Option may be exercised for a period
of sixty (60) days following the date of the Change of Control for the entire
number of Shares covered hereby.
7. Option Nontransferable. The portion of the Option that is an Incentive
Stock Option and any right related thereto shall not be transferable by Employee
otherwise than by will or the laws of descent and distribution. The portion of
the Option that is an Incentive Stock Option may be exercised during Employee's
lifetime, only by Employee or Employee's duly appointed guardian or personal
representative. Upon the death of Employee, the Option may be exercised by
Employee's executor, administrator, legatee or distributee as the case may be,
in accordance with Paragraph 6. The portion of the Option that is a Nonqualified
Option may be transferred subject to this Agreement, and the transferee may
exercise such portion of the Option in accordance with Paragraph 3. References
herein to the Employee shall include, where applicable, a permitted transferee.
8. Adjustments of Shares Subject to Option. If the outstanding shares of
Common Stock shall at any time be changed or exchanged by reason of
reorganization, merger, consolidation recapitalization, reclassification, stock
split, combination of share or a dividend Payable in stock, then the aggregate
number of Shares subject to this Agreement and the purchase price of such 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. 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.
10. Rights as Stockholder. This Option shall not entitle Employee or any
permitted transferee to any rights of a stockholder of the Company or to any
notice of proceedings of the Company with respect to any Shares issuable upon
exercise of this Option unless and until the Option has been exercised for such
Shares and such Shares have been registered in the Employee's (or permitted
transferee's) name upon the stock records of the Company.
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: (i) the
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obtaining of any approval from any governmental agency which the Company shall,
in its sole discretion, determine to be necessary or advisable; (ii) the
completion of any registration or other qualification of such Shares under any
state or federal law or ruling or regulation of any governmental body which the
Company shall, in its sole discretion, determine to be necessary or advisable;
and (iii) the determination by the Committee that Employee has tendered to the
Company any federal, state or local tax owed by Employee as a result of
exercising the Option when the Company has a legal liability to satisfy such
tax. In addition, if the Common Stock reserved for issuance upon the exercise of
Options shall not then be registered under the Securities Act of 1933, the
Company may upon Employee's exercise of an 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 mark the certificate
for the Shares with a legend restricting transfer and may issue stop transfer
orders relating to such certificate to the Company's 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.
13. Binding Effect. This Agreement shall be binding upon the permitted
transferees, heirs, executors, administrators, and successors of the parties
hereto.
14. Governing Instrument and Law. This Option and any Shares issued
hereunder shall in all respects be governed by the terms and provisions of the
Plan, and by the laws of the State of Texas, and in the event of a conflict
between the terms of this Agreement and the terms of the Plan (copy attached),
the terms of the Plan shall control.
TANDY BRANDS ACCESSORIES, INC.
By:
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Name:
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Title:
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Accepted and Agreed:
EMPLOYEE:
Date:
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- --------------------------------
Employee's Printed Name
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