Exhibit 10.12
CHICKEN ACQUISITION
CORP.
EXCHANGE STOCK OPTION
AGREEMENT
STOCK OPTION AGREEMENT (the “
Agreement ”), dated as of November 18,
2005, between Chicken Acquisition Corp., a Delaware corporation
(the “ Company ”), and
[ ]
(the “ Employee ”). Capitalized terms
used herein without definition have the meaning set forth in
Section 14 hereof.
WHEREAS, in connection with the
purchase (the “ Purchase ”) of EPL
Holdings, Inc. (“ EPL ”), a Delaware
corporation, EPL Intermediate, Inc., and El Pollo Loco, Inc. by
Chicken Acquisition Corp., the Employee entered into an Exchange
Agreement, dated as of November 18, 2005 (the “
Exchange Agreement ”), pursuant to which the
Employee agreed to exchange certain options to purchase shares of
common stock of EPL held by the Employee prior to the Purchase (the
“ EPL Options ”) for options to purchase
common stock, par value $.01, of the Company (“ Company
Common Stock ”).
NOW, THEREFORE, the parties hereto
agree as follows:
1. Confirmation of Grant, Option
Price .
(a) Confirmation of Grant .
The Company hereby evidences and confirms the grant to the
Employee, effective as of the date hereof (the “ Grant
Date ”), of options to purchase from the Company the
number of shares of Company Common Stock (the “
Options ”) specified on Schedule A hereto;
provided , however , that such grant is expressly
conditioned upon the Employee executing the Stockholders Agreement.
In addition, such Options are subject to the terms of the Chicken
Acquisition Corp. 2005 Stock Option Plan; provided ,
however , where the terms of such plan and the terms of this
Agreement conflict, the terms of this Agreement shall
govern.
(b) Option Price . Each
Option shall have the exercise price per share (the “
Option Price ”) specified on Schedule A
hereto.
(c) Character of Options .
The Options granted hereunder are not intended to be
“incentive stock options” within the meaning of section
422 of the Internal Revenue Code of 1986, as amended (the “
Code ”).
2. Vesting .
All Options granted pursuant to this
Agreement shall be fully vested as of the date hereof and shall
terminate on the date specified on Schedule A hereto, which
is
the date the applicable EPL Options would have
otherwise terminated if the Employee had not entered into the
Exchange Agreement and if the EPL Options had remained outstanding
following the Purchase (the “ Expiration Date
”).
3. Method of Exercise and
Payment .
(a) The Option may be exercised,
from time to time, in whole or in part (but for the purchase of
whole shares only), by delivery of a written notice (the “
Exercise Notice ”) from the Employee to the
Company, which Exercise Notice shall:
(i) state that the Employee elects
to exercise the Option;
(ii) state the number of shares of
Company Common Stock with respect to which the Employee is
exercising the Option;
(iii) state the date upon which the
Employee desires to consummate the purchase of such shares of
Company Common Stock (which date must be prior to the termination
of the Option); and
(iv) comply with such further
provisions as the Company may reasonably require.
(b) Payment of the Option Price for
the shares of Company Common Stock to be purchased on the exercise
of the Option shall be made by certified or bank cashier’s
check payable to the order of the Company, delivery of shares of
Company Common Stock held for at least six months, valued at their
Fair Market Value as of the trading day immediately prior to the
date of exercise or by a combination of any of the foregoing means
of payment.
(c) As a condition to the exercise
of the Option and prior to the issuance of any shares of Company
Common Stock, the Employee (or the representative of his estate)
must have previously executed the Stockholders Agreement with
respect to the Option Shares.
The Company shall be entitled to
require, as a condition of delivery of the shares of Company Common
Stock, that the Employee agree to remit when due an amount in cash
sufficient to satisfy all current or estimated future federal,
state and local withholding, and employment taxes relating
thereto.
4. Termination of Employment
.
Upon the Employee’s
termination of employment with EPL and its Subsidiaries, the
Employee shall have ninety (90) days following the date of
such termination of employment to exercise any portion of the
Option and thereafter such
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Option shall terminate and be null and void.
Notwithstanding the foregoing, if the Employee’s termination
of employment is due to his retirement or total and permanent
disability (each as determined by the Board) or death, the
Employee, or the representative of the estate of the Employee, as
the case may be, may exercise any portion of the Option for a
period of nine months thereafter and thereafter such Option shall
terminate and be null and void. Notwithstanding the foregoing, in
the event of a termination of the Employee’s employment with
EPL or any of its Subsidiaries for Cause, the unexercised portion
of the Option shall terminate immediately and the Employee shall
have no right thereafter to exercise any part of the Option.
Notwithstanding the foregoing, no Option may be exercised following
the Expiration Date.
5. Dividends . Upon the
payment of a dividend with respect to the Company Common Stock, the
Employee shall be entitled to receive the economic equivalent of
such dividend as if all Options had been exercised for shares of
Company Common Stock prior to the payment of the
dividend.
6. Tax Withholdings
.
Whenever Company Common Stock is to
be issued pursuant to the exercise of an Option or any cash payment
is to be made hereunder, the Company or any Subsidiary shall have
the power to withhold, or require the Employee to remit to the
Company or such Subsidiary, an amount sufficient to satisfy the
statutory minimum federal, state, and local withholding tax
requirements relating to such transaction (which amount may be paid
in whole or in part by withholding a number of shares of Company
Common Stock subject to such Option), and the Company or such
Subsidiary may defer payment of cash or issuance of Company Common
Stock until such requirements are satisfied.
7. Nontransferability of
Awards .
No Options granted hereby may be
sold, transferred, pledged, assigned, encumbered or otherwise
alienated or hypothecated, other than as permitted under the terms
of the Stockholders Agreement.
8. Beneficiary Designation
.
The Employee may from time to time
name any beneficiary or beneficiaries (who may be named
contingently or successively) by whom any right under this
Agreement is to be exercised in case of his death. Each designation
will revoke all prior designations by the Employee, shall be in a
form reasonably prescribed by the Committee, and will be effective
only when filed by the Employee in writing with the Committee
during his lifetime. If no beneficiary is named, or if a named
beneficiary does not survive the Employee, benefits remaining
unpaid or Options outstanding at the
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Employee’s death shall be paid to or
exercisable by the Employee’s surviving spouse, if any, or
otherwise to his estate, in each case in accordance with the terms
of the Stockholders Agreement.
9. Adjustment in
Capitalization .
The aggregate number of shares of
Company Common Stock subject to outstanding Option grants and the
respective exercise prices applicable to outstanding Options, shall
be proportionately adjusted to reflect, as deemed equitable and
appropriate by the Committ
