EXHIBIT 10.17
FLOWERS FOODS, INC.
2001 EQUITY AND PERFORMANCE INCENTIVE PLAN
20[ ] NONQUALIFIED STOCK OPTION AGREEMENT
WHEREAS, _________________________ (the "OPTIONEE") is an
employee of Flowers Foods, Inc. (the "COMPANY") or a Subsidiary (as defined
below);
WHEREAS, the grant of a stock option to the Optionee has been
duly authorized by a resolution of the Committee (as defined below) duly adopted
on ___________, 20__, to be effective __________, 20__ (the "DATE OF GRANT");
and
WHEREAS, the option granted hereunder is intended to be a
nonqualified stock option and will not be treated as an "incentive stock option"
within the meaning of that term under Section 422 of the Internal Revenue Code
of 1986, as amended (the "CODE").
NOW, THEREFORE, pursuant to the Flowers Foods, Inc. 2001
Equity and Performance Incentive Plan (the "PLAN"), the Company hereby grants to
the Optionee an option (the "OPTION") pursuant to this 20__ Nonqualified Stock
Option Agreement (this "AGREEMENT") to purchase __________ shares of the
Company's common stock, par value $.01 per share ("COMMON STOCK"), at the price
of $_____ per share (the "OPTION PRICE"), and agrees to cause certificates for
any shares of Common Stock purchased hereunder to be delivered to the Optionee
upon full payment of the Option Price, subject to the applicable terms and
conditions of the Plan and this Agreement.
1. EXERCISE OF OPTION.
(a) Unless and until terminated as hereinafter provided, the Option will
become exercisable in full on the third anniversary of the Date of
Grant so long as the Optionee remains in the continuous employ of the
Company or a Subsidiary until said date. For the purposes of this
Agreement, the continuous employment of the Optionee with the Company
or a Subsidiary will not be deemed to have been interrupted, and the
Optionee will not be deemed to have ceased to be an employee of the
Company or a Subsidiary, by reason of (i) the termination of his
employment and immediate rehire between the Company and a Subsidiary
or (ii) an approved leave of absence. To the extent that the Option
will have so become exercisable, it may be exercised in whole or in
part from time to time by notice in writing and payment of the Option
Price; provided, however, that any such exercise may occur only once
during each calendar year during the term of the Option as set forth
herein.
(b) In the event, however, that prior to the Option becoming exercisable
in full the Optionee shall be demoted from the position of employment
held by the Optionee on the Date of Grant, then the Optionee shall
forfeit a fraction of the Common Stock, but shall be entitled to
retain the remaining fraction of the Common Stock covered by the
Option, subject to the provisions of this agreement, which is equal to
the number of the Company's fiscal quarters in which the Optionee is
employed in the position held by the Optionee on the Date of Grant
(beginning with the Date of Grant and terminating with the quarter in
which or with which demotion occurs) divided by twelve.
Notwithstanding the foregoing, solely for purposes of this Agreement,
an apparent demotion from the position of employment held by the
Optionee on the Date of Grant shall nonetheless not be deemed to
constitute a demotion if the Committee so determines.
(c) Notwithstanding the provisions of Subsection (a) of this Section, the
Option will become immediately exercisable in full upon the occurrence
of a Change in Control (as defined below) of the Company, or death,
Disability (as defined below) or Retirement (as defined below) of the
Optionee prior to the time the Option would otherwise vest hereunder.
The Committee may provide for accelerated vesting of the Option in
other circumstances, in its discretion.
2. PAYMENT OF OPTION PRICE. The Option Price is payable in cash or by
certified or cashier's check or other cash equivalent acceptable to the
Company payable to the order of the Company. The requirement of payment in
cash will be deemed satisfied if the Optionee has made arrangements
satisfactory to the Company with a bank or broker that is a member of the
National Association of Securities Dealers, Inc. to sell on the date of
exercise a sufficient number of shares of Common Stock being purchased so
that the net proceeds of the sale transaction will at least equal the
aggregate Option Price and pursuant to which the bank or broker undertakes
to deliver the aggregate Option Price to the Company not later than the
date on which the sale transaction will settle in the ordinary course of
business.
3. TERM OF OPTION. An Option which is not, or does not become, exercisable
upon the date of termination of employment with the Company will terminate
as of said date. An Option which is exercisable will terminate on the
earliest of the following dates:
(a) Three (3) months after the Optionee ceases to be an employee of the
Company or a Subsidiary for any reason other than Retirement, death,
Disability, voluntary termination without the written consent of the
Company, or termination for Cause (as defined below);
(b) Two (2) years from the date of termination of employment because of
Disability, death, or from the date of Retirement, if the Optionee
becomes disabled, dies or retires while an employee of the Company or
a Subsidiary;
(c) Seven (7) years from the Date of Grant; or
(d) The effective date of the Optionee's termination of employment for
Cause, or voluntary termination without the Company's written consent.
(e) Notwithstanding the provisions of Section 3(a) and 3(b), if the
Optionee dies within the applicable period for exercise, the Option
will expire two (2) years from the date of death.
The Optionee shall nonetheless forfeit the entire Option if,
during the applicable period for exercise Optionee enters into competition with
the Company through employment with, rendering of services for compensation to,
or ownership of more than five percent (5%) interest in any entity which is
engaged in a business field in which the Company or any Subsidiary, is also
engaged. The Committee may waive this noncompetition requirement.
4. TRANSFERABILITY.
(a) Except as otherwise permitted by the Plan, the Option may not be
transferred except by will or the laws of descent and distribution and
may not be exercised during the lifetime of the Optionee except by the
Optionee or the Optionee's guardian or legal representative acting on
behalf of the Optionee in a fiduciary capacity under state law and
court supervision.
(b) To the extent the Option or a portion thereof remains unvested due to
a restriction of future performance of services or any other
restriction, the Optionee shall not have the right to sell, transfer,
assign, convey, pledge, hypothecate, grant any security interest in or
mortgage on, or otherwise dispose of or encumber any unvested portion
of the Option or any interest therein. As a result of the retention of
rights in the Option by the Company, except as required by any law,
neither any unvested portion of the Option nor any interest therein
shall be subject in any manner to any forced or involuntary sale,
transfer, conveyance, pledge, hypothecation, encumbrance, or other
disposition or to any charge, liability, debt, or any other obligation
of the Optionee, whether as a direct or indirect result of any action
of the Optionee or any action taken in any proceeding, including but
not limited to any proceeding under any divorce, bankruptcy or other
creditors' rights law. Any action attempting to effect a transaction
of such type shall be void.
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5. COMPLIANCE WITH LAW. The Company will make reasonable efforts to comply
with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Company will not
be obligated to issue any Common Stock pursuant to this Agreement if the
issuance thereof would result in a violation of any such law.
6. ADJUSTMENTS. The Committee may make any adjustments in the Option Price and
in the number and kind of shares of stock or other securities covered by
this Agreement that the Committee may determine to be equitably required to
prevent dilution or enlargement of the Optionee's rights under this
Agreement that would otherwise result from any (a) stock dividend, stock
split, combination of shares, recapitalization or other change in the
capital structure of the Company, (b) merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants
to purchase securities or (c) other corporate transaction or event having
an effect similar to any of the foregoing. Furthermore, in the event of any
transaction or event described or referred to in the immediately preceding
sentence, the Committee may provide in substitution for any or all of the
Optionee's rights under this Agreement such alternative consideration as it
may in good faith determine to be equitable under the circumstances and may
require in connection therewith the surrender of all grants so replaced.
7. WITHHOLDING. To the extent that the Company is required to withhold
federal, state, local or foreign taxes in connection with any payment made
or benefit realized by the Optionee or other person under this Agreement,
and the amounts available to the Company for such withholding are
insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the Optionee or such other person make
arrangements satisfactory to the Company for payment of the balance of such
taxes required to be withheld, which arrangements may include additional
payment in cash by the Optionee to the Company to meet the withholding
requirement. The Company and the Optionee or such other person may also
make arrangements with respect to the payment in cash of any taxes with
respect to which withholding is not required.
8. NO EMPLOYMENT RIGHTS. The Plan and this Agreement will not confer upon the
Optionee any right with respect to the continuance of employment or other
service with the Company or any Subsidiary and will not interfere in any
way with any right that the Company or any Subsidiary would otherwise have
to terminate any employment or other service of the Optionee at any time.
9. RELATION TO OTHER BENEFITS. Any economic or other benefit to the Optionee
under this Agreement will not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company
or a Subsidiary and will not effect the amount of any life insurance
coverage available to any beneficiary under any life insurance plan
covering employees of the Company or any Subsidiary, unless provided
otherwise in any such plan.
10. NOTICES. Any notice necessary under this Agreement will be addressed to the
Company or the Committee at the principal executive office of the Company
and to the Optionee at the address appearing in the personnel records of
the Company for such Optionee, or to either party at such other address as
either party may designate in writing to the other. Any such notice will be
deemed effective upon receipt thereof by the addressee.
11. AGREEMENT SUBJECT TO THE PLAN. The Option granted under this Agreement and
all of the terms and conditions hereof are subject to all of the terms and
conditions of the Plan. In the event of any inconsistency between this
Agreement and the Plan, the terms of the Plan will govern. The Committee
acting pursuant to the Plan, as constituted from time to time, shall,
except as expressly provided otherwise herein, have the right to determine
any questions which arise in connection with this Option or its exercise.
12. NO STOCKHOLDER RIGHTS. The holder of the Option shall have no stockholder
rights with respect to the shares of Common Stock subject to the Option
until such person shall have exercised the Option.
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13. AMENDMENTS. Any amendment to the Plan will be deemed to be an amendment to
this Agreement to the extent that the amendment is applicable hereto;
provided, however, that no amendment will adversely affect the rights of
the Optionee under this Agreement without the Optionee's consent.
14. SEVERABILITY. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated will be deemed to be separable
from the other provisions hereof, and the remaining provisions hereof will
continue to be valid and fully enforceable.
15. SUCCESSORS AND ASSIGNS. Without limiting Section 4 hereof, the provisions
of this Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
16. GOVERNING LAW. This Agreement will be construed and governed in accordance
with the laws of the State of Georgia.
17. CERTAIN DEFINED TERMS. In addition to the following defined terms and terms
defined elsewhere herein, when used in the Agreement, terms with initial
capital letters have the meaning given such term under the Plan, as in
effect from time to time.
(a) "BOARD" means the Board of Directors of the Company and, to the extent
of any delegation by the Board to a committee (or subcommittee
thereof) pursuant to the Plan, such committee or subcommittee.
(b) "CAUSE" means that, prior to any termination of employment, the
Optionee shall have committed an act or acts of dishonesty, moral
turpitude or willful misconduct, which act or acts were intended to
result in substantial personal enrichment at the expense of the
Company or any Subsidiary or which have a material adverse effect on
the business or reputation of the Corporation or any Subsidiary
For the avoidance of doubt and for the purpose of determining
Cause, the exercise of business judgment by the Optionee shall not be determined
to be Cause, even if such business judgment materially injures the financial
condition or business reputation of, or is otherwise materially injurious to the
Company or any Subsidiary, unless such business judgment by the Optionee was not
made in good faith, constitutes willful or wanton misconduct, or was an
intentional violation of state or federal law.
(c) "CHANGE IN CONTROL" shall mean the occurrence during the term of any
of the following events, subject to the provisions of Section
17(c)(vi) hereof:
(i) the Company merges into itself, or is merged or consolidated
with, another entity and as a result of such merger or
consolidation less than 51% of the voting power of the
then-outstanding voting securities of the surviving or
resulting entity immediately after such transaction are
directly or indirectly beneficially owned in the aggregate by
the former shareholders of the Company immediately prior to
such transaction; or
(ii) all or substantially all the assets accounted for on the
consolidated balance sheet of the Company are sold or
transferred to one or more entities or persons, and as a
result of such sale or transfer less than 51% of the voting
power of the then-outstanding voting securities of such entity
or person immediately after such sale or transfer is directly
or indirectly beneficially held in the aggregate by the former
shareholders of the Company immediately prior to such
transaction or series of transactions; or
(iii) a person, within the meaning of Section 3(a)(9) or 13(d)(3)
(as in effect on the Effective Date of the Plan) of the
Exchange Act becomes the beneficial owner (as defined
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in Rule 13d-3 of the Securities and Exchange Commission
pursuant to the Exchange Act) of (i) 15% or more but less than
35% of the voting power of the then-outstanding voting
securities of the Company without prior approval of the Board,
or (ii) 35% or more of the voting power of the
then-outstanding voting securities of the Company; provided,
however, that the foregoing does not apply to any such
acquisition that is made by (w) any Subsidiary; (x) any
employee benefit plan of the Company or any Subsidiary; or (y)
any person or group of which employees of the Company or of
any Subsidiary control a greater than 25% interest unless the
Board determines that such person or group is making a
"hostile acquisition;" or (z) any person or group of which the
Company is an affiliate; or
(iv) a majority of the members of the Board are not Continuing
Directors, where a "CONTINUING DIRECTOR" is any member of the
Board who (x) was a member of the Board on the Effective Date
of the Plan or (y) was nominated for election or elected to
such Board with the affirmative vote of a majority of the
Continuing Directors who were members of such Board at the
time of such nomination or election; or
(v) the Board determines that (A) any particular actual or
proposed merger, consolidation, reorganization, sale or
transfer of assets, accumulation of shares of the Company or
other transaction or event or series of transactions or events
will, or is likely to, if carried out, result in a Change in
Control falling within Subsections (i), (ii), (iii) or (iv)
and (B) it is in the best interests of the Company and its
shareholders, and will serve the intended purposes of this
Section 17(c), if the provisions of awards which provide for
earlier exercise or earlier lapse of restrictions or
conditions upon a Change in Control shall thereupon become
immediately operative.
(vi) Notwithstanding the foregoing provisions of this Section
17(c):
(1) If any such merger, consolidation, reorganization, sale or
transfer of assets, or tender offer or other transaction or
event or series of transactions or events mentioned in
Section 17(c)(v) shall be abandoned, or any such
accumulations of shares shall be dispersed or otherwise
resolved, the Board may, by notice to the Participant,
nullify the effect thereof and reinstate the award as
previously in effect, but without prejudice to any action
that may have been taken prior to such nullification.
(2) Unless otherwise determined in a specific case by the Board,
a "Change in Control" shall not be deemed to have occurred
for purposes of Section (17)(c) solely because (X) the
Company, (Y) a Subsidiary, or (Z) any Company-sponsored
employee stock ownership plan or any other employee benefit
plan of the Company or any Subsidiary either files or
becomes obligated to file a report or a proxy statement
under or in response to Schedule 13D, Schedule 14D-1, Form
8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act disclosing
beneficial ownership by it of shares of the then-outstanding
voting securities of the Company, whether in excess of 20%
or otherwise, or because the Company reports that a change
in control of the Company has occurred or will occur in the
future by reason of such beneficial ownership.
(d) "COMMITTEE" means the Compensation Committee of the Board, which shall
consist of a committee of two (2) or more Nonemployee Directors
appointed by the Board to exercise one or more administrative
functions under the Plan.
(e) "DIRECTOR" means a member of the Board of Directors of the Company.
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(f) "DISABILITY" means disability as determined under procedures
established by the Committee for purposes of the Plan.
(g) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.
(h) "NONEMPLOYEE DIRECTOR" means a Director who is not an employee of the
Company or any Subsidiary.
(i) "RETIREMENT" means termination of employment (i) on or after
attainment of age 65.
(j) "SPREAD" means the excess of the Fair Market Value per share on the
date when the Option is surrendered in payment of the Option Price of
other Options, over the Option Price.
(k) "SUBSIDIARY" means a corporation, company or other entity (i) more
than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, or (ii) which does not have outstanding
shares or securities (as may be the case in a partnership, joint
venture or unincorporated association), but more than fifty percent
(50%) of whose ownership interest representing the right generally to
make decisions for such other entity is, now or hereafter, owned or
controlled, directly or indirectly, by the Company.
In witness whereof, the Company has caused this agreement to be
executed as of the Date of Grant.
FLOWERS FOODS, INC.
By:
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Title:
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The undersigned Optionee hereby acknowledges receipt of an
executed original of this 20__ Nonqualified Stock Option Agreement and accepts
the Option subject to the applicable terms and conditions of the Plan and the
terms and conditions hereinabove set forth.
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Optionee
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