1
Exhibit 99.3
CARL KARCHER ENTERPRISES, INC.
1993 EMPLOYEE STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered
into as of the Date of Grant indicated below by and between Carl Karcher
Enterprises, Inc., a California corporation (the "Company"), and the person
named below as Employee.
WHEREAS, Employee is an employee of the Company and/or one or
more of its subsidiaries; and
WHEREAS, pursuant to the Company's 1993 Employee Stock
Incentive Plan (the "Plan"), the committee of the Board of Directors of the
Company administering the Plan (the "Committee") has approved the grant to
Employee of an option to purchase shares of the common stock of the Company
(the "Common Stock"), on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Option; Certain Terms and Conditions. The
Company hereby grants to Employee, and Employee hereby accepts, as of the Date
of Grant, an option to purchase the number of shares of Common Stock indicated
below (the "Option Shares") at the Exercise Price per share indicated below,
which option shall expire at 5:00 o'clock p.m., California time, on the
Expiration Date indicated below and shall be subject to all of the terms and
conditions set forth in this Agreement (the "Option"). On each anniversary of
the Date of Grant, the Option shall become exercisable to purchase, and shall
vest with respect to, that number of Option Shares (rounded to the nearest
whole share) equal to the total number of Option Shares multiplied by the
Annual Vesting Rate indicated below.
Employee: ___________________
Date of Grant: _______
Number of shares purchasable: _______
Exercise Price per share: _______
Expiration Date: _______
Annual Vesting Rate: ______%
2
The Option is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code (an "Incentive Stock Option").
2. Acceleration and Termination of Option.
(a) Termination of Employment.
(i) Termination Within One Year After Change of
Control. In the event that Employee shall cease to be an employee of
the Company or any of its subsidiaries (such event shall be referred
to herein as the "Termination" of Employee's "Employment") for any
reason, or for no reason, within one year after a Change of Control
(as hereinafter defined), then (A) the portion of the Option that has
not vested on or prior to the date of such Termination of Employment
shall fully vest on such date and (B) the Option shall terminate upon
the earlier of the Expiration Date or the first anniversary of the
date of such Termination of Employment. "Change of Control" shall
mean the first to occur of the following events:
(X) any date upon which the directors of the
Company who were last nominated by the Board of Directors (the
"Board") for election as directors cease to constitute a
majority of the directors of the Company;
(Y) the date of the first public announcement
that any person or entity, together with all Affiliates and
Associates (as such capitalized terms are defined in Rule
12b-2 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) of such person or entity,
shall have become the Beneficial Owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of voting securities
of the Company representing 25% or more of the voting power of
the Company (a "25% Stockholder"), provided, however, that the
terms "person" and "entity," as used in this clause (Y), shall
not include (1) the Company or any of its subsidiaries, (2)
any employee benefit plan of the Company or any of its
subsidiaries, (3) any entity holding voting securities of the
Company for or pursuant to the terms of any such plan, (4) any
person or entity if the transaction that resulted in such
person or entity becoming a 25% Stockholder was approved in
advance by the Board or (5) any person or entity who was a 25%
Stockholder on the date of adoption of the Plan by the
Company's Board of Directors; or
2
3
(Z) a reorganization, merger or consolidation of
the Company (other than a reorganization, merger or
consolidation the sole purpose of which is to change the
Company's domicile solely within the United States) the
consummation of which results in the outstanding securities of
any class then subject to the Option being exchanged for or
converted into cash, property and/or a different kind of
securities.
(ii) Retirement. If Employee's Employment is
Terminated by reason of Employee's retirement in accordance with the
Company's then-current retirement policy ("Retirement"), and a Change
of Control shall not have occurred within one year prior thereto, then
(A) the portion of the Option that has not vested on or prior to the
date of such Retirement shall terminate on such date and (B) the
remaining vested portion of the Option shall terminate upon the
Expiration Date.
(iii) Death or Permanent Disability. If Employee's
Employment is Terminated by reason of the death or Permanent
Disability (as hereinafter defined) of Employee, and a Change of
Control shall not have occurred within one year prior thereto, then
(A) the portion of the Option that has not vested on or prior to the
date of such Termination of Employment shall terminate on such date
and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the first anniversary of
the date of such Termination of Employment. "Permanent Disability"
shall mean the inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than 12 months.
Employee shall not be deemed to have a Permanent Disability until
proof of the existence thereof shall have been furnished to the Board
in such form and manner, and at such times, as the Board may require.
Any determination by the Board that Employee does or does not have a
Permanent Disability shall be final and binding upon the Company and
Employee.
(iv) Other Termination. If Employee's Employment
is Terminated for no reason, or for any reason other than Retirement,
death or Permanent Disability, and a Change of Control shall not have
occurred within one year prior thereto, then the Option shall
terminate upon the date of such Termination of Employment.
(b) Death Following Termination of Employment.
Notwithstanding anything to the contrary in this Agreement, if
3
4
Employee shall die at any time after the Termination of his or her Employment
and prior to the Expiration Date, then (i) the portion of the Option that has
not vested on or prior to the date of such death shall terminate on such date
and (ii) the remaining vested portion of the Option shall terminate on the
earlier of the Expiration Date or the first anniversary of the date of such
death.
(c) Other Events Causing Acceleration of Option. The
Committee, in its sole discretion, may accelerate the exercisability of the
Option at any time and for any reason.
(d) Other Events Causing Termination of Option.
Notwithstanding anything to the contrary in this Agreement, the Option shall
terminate upon the consummation of any of the following events, or, if later,
the thirtieth day following the first date upon which such event shall have
been approved by both the Board and the stockholders of the Company:
(i) the dissolution or liquidation of the
Company; or
(ii) a sale of substantially all of the property
and assets of the Company, unless the terms of such sale shall provide
otherwise.
3. Adjustments. In the event that the outstanding
securities of the class then subject to the Option are increased, decreased or
exchanged for or converted into cash, property and/or a different number or
kind of securities, or cash, property and/or securities are distributed in
respect of such outstanding securities, in either case as a result of a
reorganization, merger, consolidation, recapitalization, reclassification,
dividend (other than a regular, quarterly cash dividend) or other distribution,
stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then,
unless such event shall cause the Option to terminate pursuant to Section 2(d)
hereof, the Committee shall make appropriate and proportionate adjustments in
the number and type of shares or other securities or cash or other property
that may thereafter be acquired upon the exercise of the Option; provided,
however, that any such adjustments in the Option shall be made without changing
the aggregate Exercise Price of the then unexercised portion of the Option.
4. Exercise.
(a) The Option shall be exercisable during
Employee's lifetime only by Employee or by his or her guardian or legal
representative, and after Employee's death only by the person or entity
entitled to do so under Employee's last will and testament or applicable
intestate law. The Option may only be exercised by the delivery to the Company
of a
4
5
written notice of such exercise, which notice shall specify the number of
Option Shares to be purchased (the "Purchased Shares") and the aggregate
Exercise Price for such shares (the "Exercise Notice"), together with payment
in full of such aggregate Exercise Price in cash or by check payable to the
Company; provided, however, that payment of such aggregate Exercise Price may
instead be made, in whole or in part, by the delivery to the Company of a
certificate or certificates representing shares of Common Stock, duly endorsed
or accompanied by a duly executed stock powers, which delivery effectively
transfers to the Company good and valid title to such shares, free and clear of
any pledge, commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value (as defined in the Plan)
thereof on the date of such exercise), provided that the Company is not then
prohibited from purchasing or acquiring such shares of Common Stock.
5. Payment of Withholding Taxes. If the Company becomes
obligated to withhold an amount on account of any tax imposed as a result of
the exercise of the Option, including, without limitation, any federal, state,
local or other income tax, or any F.I.C.A., state disability insurance tax or
other employment tax, then Employee shall, on the first day upon which the
Company becomes obligated to pay such amount to the appropriate taxing
authority, pay such amount to the Company in cash or by check payable to the
Company.
6. Notices. All notices and other communications
required or permitted to be given pursuant to this Agreement shall be in
writing and shall be deemed given if delivered personally or five days after
mailing by certified or registered mail, postage prepaid, return receipt
requested, to the Company at 1200 North Harbor Boulevard, Anaheim, California
92801, Attention: Mr. Roger Shively, or to Employee at the address set forth
beneath his or her signature on the signature page hereto, or at such other
addresses as they may designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws.
Notwithstanding anything to the contrary in this Agreement, no shares of stock
purchased upon exercise of the Option, and no certificate representing all or
any part of such shares, shall be issued or delivered if (a) such shares have
not been admitted to listing upon official notice of issuance on each stock
exchange upon which shares of that class are then listed or (b) in the opinion
of counsel to the Company, such issuance or delivery would cause the Company to
be in violation of or to incur liability under any federal, state or other
securities law, or any requirement of any stock exchange listing agreement to
which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.
5
6
8. Nontransferability. Neither the Option nor any
interest therein may be sold, assigned, conveyed, gifted, pledged, hypothecated
or otherwise transferred in any manner other than by will or the laws of
descent and distribution
9. Plan. The Option is granted pursuant to the Plan, as
in effect on the Date of Grant, and is subject to all the terms and conditions
of the Plan, as the same may be amended from time to time; provided, however,
that no such amendment shall deprive Employee, without his or her consent, of
the Option or of any of Employee's rights under this Agreement. The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option and such rules and regulations as may be adopted by the Committee
for the purpose of administering the Plan shall be final and binding upon
Employee. Until the Option shall expire, terminate or be exercised in full,
the Company shall, upon written request therefor, send a copy of the Plan, in
its then-current form, to Employee or any other person or entity then entitled
to exercise the Option.
10. Stockholder Rights. No person or entity shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
any Option Shares until the Option shall have been duly exercised to purchase
such Option Shares in accordance with the provisions of this Agreement.
11. Employment Rights. No provision of this Agreement or
of the Option granted hereunder shall (a) confer upon Employee any right to
continue in the employ of the Company or any of its subsidiaries, (b) affect
the right of the Company and each of its subsidiaries to terminate the
employment of Employee, with or without cause, or (c) confer upon Employee any
right to participate in any employee welfare or benefit plan or other program
of the Company or any of its subsidiaries other than the Plan. EMPLOYEE HEREBY
ACKNOWLEDGES AND AGREES THAT THE COMPANY AND EACH OF ITS SUBSIDIARIES MAY
TERMINATE THE EMPLOYMENT OF EMPLOYEE AT ANY TIME AND FOR ANY REASON, OR FOR NO
REASON, UNLESS EMPLOYEE AND THE COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A
WRITTEN EMPLOYMENT AGREEMENT THAT EXPRESSLY PROVIDES OTHERWISE.
12. Governing Law. This Agreement and the Option granted
hereunder shall be governed by and construed and enforced in accordance with
the laws of the State of California without reference to choice or conflict of
law principles.
6
7
IN WITNESS WHEREOF, the Company and Employee have duly
executed this Agreement as of the Date of Grant.
CARL KARCHER ENTERPRISES, INC.
By ________________________________
Title:
EMPLOYEE
___________________________________
Signature
___________________________________
Street Address
___________________________________
City, State and Zip Code
___________________________________
Social Security Number
7