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Exhibit 10.9
Amended and Restated 2005 Stock Option Plan of Overhill Farms,
Inc.
Section 1. Purpose. This Amended and Restated 2005 Stock
Plan of Overhill Farms, Inc. is intended as an incentive to attract
and retain qualified and competent employees, consultants, advisors
and directors for the Company and its Subsidiaries, upon whose
efforts and judgment the success of the Company is largely
dependent, through the encouragement of stock ownership in the
Company by such persons.
Section 2. Definitions. As used herein, the following
terms shall have the meaning indicated:
(a) “Act”
shall mean the Securities Exchange Act of 1934, as amended.
(b) “Beneficial
Owner” shall have the meaning provided in the definition of
“Change in Control” in this Section 2.
(c) “Board”
shall mean the Board of Directors of the Company.
(d) “Business
Day” shall mean (i) if the Shares trade on a national
exchange, any day that the national exchange on which the Shares
trade is open or (ii) if the Shares do not trade on a national
exchange, any day that commercial banks in the City of Los Angeles,
California are open.
(e) “Cause”
shall have the meaning set forth in an Optionee’s employment
or consulting agreement with the Company or a Subsidiary, if any,
or if not defined therein, shall mean (i) acts or omissions by the
Optionee which constitute intentional material misconduct or a
knowing violation of a material policy of the Company or a
Subsidiary, (ii) the Optionee personally receiving a benefit in
money, property or services from the Company or a Subsidiary or
from another person dealing with the Company or a Subsidiary in
material violation of applicable law or Company policy, (iii) an
act of fraud, conversion, misappropriation or embezzlement by the
Optionee or his conviction of, or entering a guilty plea or plea of
no contest with respect to, a felony, or the equivalent thereof
(other than driving under the influence) or (iv) any material
misuse or improper disclosure of confidential or proprietary
information of the Company or a Subsidiary. A termination for
“cause” may also include any resignation in
anticipation of discharge for “cause” or resignation
accepted by the Company in lieu of a formal discharge for
“cause.”
(f) “Change
in Control” shall mean the occurrence of any of the
following:
(i) Any
“Person” or “Group,” as such terms are
defined in Section 13(d) of the Act and the rules and regulations
promulgated thereunder, becomes the “Beneficial Owner”
(within the meaning of Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company, or of any entity
resulting from a merger or consolidation involving the Company,
representing more than fifty percent (50%) of the combined voting
power of the then outstanding securities of the Company or such
entity.
(ii) The
individuals who, as of the time immediately following the election
of directors at the Company’s 2005 Annual Meeting of
Stockholders, are members of the Board (the “Existing
Directors”), cease, for any reason, to constitute more than
fifty percent (50%) of the number of authorized directors of the
Company as determined in the manner prescribed in the
Company’s Articles of Incorporation and Bylaws; provided,
however, that if the election, or nomination for election, by the
Company’s stockholders of any new director was approved by a
vote of at least fifty percent (50%) of the Existing Directors,
such new director shall be considered an Existing Director;
provided, further, however, that no individual shall be considered
an Existing Director if such individual initially assumed office as
a result of either an actual or threatened “Election
Contest” (as described in Rule 14a-11 promulgated under the
Act) or other actual or threatened solicitation of proxies by or on
behalf of anyone other than the Board (a “Proxy
Contest”), including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy Contest.
(iii) The
consummation of (x) a merger, consolidation or reorganization to
which the Company is a party, whether or not the Company is the
Person surviving or resulting therefrom, or (y) a sale, assignment,
lease, conveyance or other disposition of all or substantially all
of the assets of the Company, in one transaction or a series of
related transactions, to any Person other than the Company, where
any such transaction or series of related transactions as is
referred to in clause (x) or clause (y) above in this subparagraph
(iii) (singly or collectively, a “Transaction”) does
not otherwise result in a “Change in Control” pursuant
to subparagraph (i) of this definition of “Change in
Control”; provided, however, that no such Transaction shall
constitute a “Change in Control” under this
subparagraph (iii) if the Persons who were the stockholders of the
Company immediately before the consummation of such Transaction are
the Beneficial Owners, immediately following the consummation of
such Transaction, of fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of the
Person surviving or resulting from any merger, consolidation or
reorganization referred to in clause (x) above in this subparagraph
(iii) or the Person to whom the assets of the Company are sold,
assigned, leased, conveyed or disposed of in any transaction or
series of related transactions referred in clause (y) above in this
subparagraph (iii), in substantially the same proportions in which
such Beneficial Owners held voting stock in the Company immediately
before such Transaction.
(g) “Commission”
shall mean the Securities and Exchange Commission.
(h) “Committee”
shall mean the Compensation Committee of the Board or other
committee, if any, appointed by the Board pursuant to Section 14
hereof, and in the absence of any appointment, the Board shall be
the Committee.
(i) “Common
Stock” shall mean the Company’s common stock, par value
$.01 per share.
(j) “Company”
shall mean Overhill Farms, Inc., a Nevada corporation.
(k) “Consultant”
and “Consulting Contract” shall have the meanings
provided in the definition of “Eligible Person” in this
Section 2.
(l) “Date
of Grant” shall mean the date on which an Option is granted
to an Eligible Person pursuant to Section 4 hereof.
(m) “Director”
shall mean a member of the Board.
(n) “Disability”
shall mean “disability” as defined in Section 22(e)(3)
of the Internal Revenue Code.
(o) “Disinterested
Committee” shall have the meaning provided in Section 14(a)
hereof.
(p) “Eligible
Person(s)” shall mean those persons who are (i) under written
contract (a “Consulting Contract”) with the Company or
a Subsidiary to provide consulting or advisory services to the
Company or a Subsidiary and whose Options could be registered on
Form S-8 (a “Consultant”), (ii) Employees, or (iii)
Directors.
(q) “Employee(s)”
shall mean those persons who are employees of the Company or who
are employees of any Subsidiary.
(r) “Exercise
Price” shall have the meaning provided in Section 5
hereof.
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(s) “Fair
Market Value” of a share on a particular date shall be the
closing price of the Common Stock, which shall be (i) if the Common
Stock is listed or admitted for trading on any United States
national securities exchange, the last reported sale price of
Common Stock on such exchange as reported in any newspaper of
general circulation on the day of determination, (ii) if the Common
Stock is quoted on a system of automated dissemination of
quotations of securities prices in common use, the last reported
sale price of Common Stock on such exchange as reported in any
newspaper of general circulation on the day of determination or, if
the last sale price is not reported by such system, the mean
between the closing high bid and low asked quotations for such day
of the Common Stock on such system or (iii) if neither clause (i)
nor (ii) is applicable, the value determined by the Board taking
into account all material information available with respect to the
value of a share of the Common Stock, including, without
limitation, the value of the tangible and intangible assets of the
Company, the present value of its anticipated future cash flows,
the market value of the stock or equity interests in other entities
engaged in substantially the same business, recent arm’s
length transactions involving the sale of the Common Stock, and
other relevant factors such as control premiums or discounts for
lack of marketability.
(t) “Incentive
Stock Option” shall mean an option that is an incentive stock
option as defined in Section 422 of the Internal Revenue Code.
(u) “Internal
Revenue Code” shall mean the Internal Revenue Code of 1986,
as it now exists or may be amended from time to time.
(v) “Nonqualified
Stock Option” shall mean a stock option that is not an
incentive stock option as defined in Section 422 of the Internal
Revenue Code.
(w) “Option”
(when capitalized) shall mean any option granted under this
Plan.
(x) “Optionee”
shall mean a person to whom an Option is granted under this Plan or
any successor to the rights of such person.
(y) “Outside
Director” shall mean a Director who qualifies as an
“outside director” under the regulations promulgated
under Section 162(m) of the Internal Revenue Code and as a
“non-employee director” under Rule 16b-3.
(z) “Plan”
shall mean this Amended and Restated 2005 Stock Plan of Overhill
Farms, Inc.
(aa) “Restricted
Stock Purchase Agreement” shall mean the agreement under
which a Stock Purchase Right is granted as described in Section 8
hereof.
(bb) “Rule
16b-3” shall mean Rule 16b-3 promulgated under the Act.
(cc) “Share(s)”
shall mean a share or shares of the Common Stock.
(dd) “Stock
Purchase Right” shall mean a right to purchase restricted
shares of the Company’s stock granted under this Plan as
described in Section 8 hereof.
(ee) “Subsidiary”
shall mean any corporation (other than the Company) in any unbroken
chain of corporations beginning with the Company if, at the time of
the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
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Section 3. Shares and Options.
(a) The
Company may grant to Eligible Persons from time to time Options
(including, without limitation, Incentive Stock Options) and Stock
Purchase Rights to purchase an aggregate of up to 550,000 Shares
from Shares held in the Company’s treasury or from authorized
and unissued Shares. If any Option or Stock Purchase Right granted
under the Plan terminates, expires, or is canceled or surrendered
as to any Shares, or if Shares are repurchased by the Company
pursuant to repurchase rights associated with a Stock Purchase
Right, new Options or Stock Purchase Rights may thereafter be
granted covering such Shares. An Option granted hereunder shall be
either an Incentive Stock Option or a Nonqualified Stock Option as
determined by the Committee at the Date of Grant of such Option and
shall clearly state whether it is an Incentive Stock Option or a
Nonqualified Stock Option. Incentive Stock Options may only be
granted to persons who are Employees.
(b) The
aggregate Fair Market Value (determined at the Date of Grant of the
Option) of the Shares with respect to which any Incentive Stock
Option is exercisable for the first time by an Optionee during any
calendar year under the Plan and all such plans of the Company and
any parent and subsidiary of the Company (as defined in Section 424
of the Internal Revenue Code) shall not exceed $100,000. Each
Option will be designated in the option agreement as either an
Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designations, if the Shares subject to an
Optionee’s Incentive Stock Options (granted under all plans
of the Company or any parent or Subsidiary) which become
exercisable for the first time during any calendar year have a fair
market value in excess of $100,000, the Options accounting for this
excess will be treated as Nonqualified Stock Options. For purposes
of this Section 3(b), Incentive Stock Options will be taken into
account in the order in which they were granted, and the Fair
Market Value of the Shares will be determined as of the time of
grant.
(c) Subject
to the provisions of the Plan, the Committee may grant Options to
such Eligible Persons as the Committee in its sole discretion
determines are eligible to receive such grants in accordance with
Section 4 hereof. Notwithstanding any provision herein to the
contrary, there shall be no grant of Options exercisable into in
excess of 300,000 Shares to any one individual in any one year.
Section 4. Conditions for Grant of Options.
(a) Each
Option shall be evidenced by an option agreement that may contain
any term deemed necessary or desirable by the Committee, provided
such terms are not inconsistent with this Plan or any applicable
law. Optionees shall be those persons selected from Eligible
Persons. The Committee shall determine which Eligible Persons,
other than Directors, shall be granted Options from time to time.
The Disinterested Committee shall determine which Directors and
which individuals covered by Section 162(m) of the Internal Revenue
Code or Section 16(b) of the Act shall be granted Options from time
to time. References to the Committee throughout the remainder of
this Section 4 shall mean the Committee or the Disinterested
Committee, as appropriate. Notwithstanding any provision to the
contrary, an Option shall be void if the Optionee is not an
Eligible Person at the time of the grant.
(b) In
granting Options, the Committee shall take into consideration the
contribution the person has made or may make to the success of the
Company or its Subsidiaries and such other factors as the Board
shall determine. The Committee shall also determine the number of
shares subject to each of the Options and shall authorize and cause
the Company to grant Options in accordance with those
determinations. The Committee shall also have the authority to
consult with and receive recommendations from officers and other
personnel of the Company and its Subsidiaries with regard to these
matters. The Committee may from time to time in granting Options
under the Plan prescribe such other terms and conditions concerning
such Options as it deems appropriate, including, without
limitation, relating an Option to achievement of specific goals
established by the Committee or the continued employment of the
Optionee for a specified period of time, provided that such terms
and conditions are not more favorable to an Optionee than those
expressly permitted herein.
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(c) The
Committee in its sole discretion may delegate to the Chief
Executive Officer of the Company any or all of its powers under
this Plan with regard to the granting and administration of Options
to Eligible Persons, provided that the Disinterested Committee may
not delegate its duties with respect to granting Options to, or
otherwise with respect to Options granted to, Eligible Persons who
are subject to Section 16(b) of the Act or Section 162(m) of the
Internal Revenue Code.
Section 5. Exercise Price. The exercise price per Share
(“Exercise Price”) shall be determined by the Committee
at the time of grant and shall not be less than one hundred percent
(100%) of the Fair Market Value per Share on the Date of Grant.
Section 6. Exercise of Options.
(a) Each
Option shall specify the period over which vesting shall occur;
provided, however, that:
(i)
subject to Section 9(b) hereof, if the
Optionee is an Eligible Person on the date that a Change in Control
occurs, unless such vesting would subject the Optionee to the
excise tax under Section 4999 of the Internal Revenue Code, all
Options held by the Optionee shall become fully vested and
immediately exercisable on the day before the date of such Change
in Control;
(ii)
if the Optionee ceases to be an Eligible Person by
reason of the death or Disability of the Optionee, any Options held
by the Optionee shall become fully vested and immediately
exercisable on the date such Optionee ceases to be an Eligible
Person, and the termination provisions of Section 7 hereof shall
apply; and
(iii) Unless
the Committee p
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