FRESH BRANDS, INC.
OPTION CANCELLATION AGREEMENT
THIS OPTION CANCELLATION
AGREEMENT , made this
_____day of December, 2005, by and between FRESH BRANDS,
INC. , a Wisconsin corporation (the “Company”), and
[NAME OF OPTIONEE] (“Optionee”).
WHEREAS , the Company has established the Fresh Brands, Inc.
1995 Equity Incentive Plan (also known as the Schultz Sav-O Stores,
Inc. 1995 Equity Incentive Plan) (the “1995 Plan”) and
the Fresh Brands, Inc. 2001 Nonemployee Director Option Plan (also
known as the Schultz Sav-O Stores, Inc. 2001 Nonemployee Director
Option Plan) (the “2001 Plan”) for the purpose of
providing an additional incentive to key employees and directors
through stock ownership and a corresponding proprietary interest in
the Company through the award of options.
WHEREAS , the Company granted to the Optionee the options
specified on Exhibit A (the “Option(s)”) under the 1995
Plan and/or the 2001 Plan.
WHEREAS , the Company has entered into that certain
Agreement and Plan of Merger among Certified Holdings, Inc., Pillow
Acquisition Corp. and the Company, dated as of December 5 2005 (the
“Merger Agreement”) that provides for the merger of
Pillow Acquisition Corp. and the Company (the “Merger”)
for a cash payment per share of Company common stock of
$7.05;
WHEREAS , pursuant to the Merger Agreement and in order to
effectuate the Merger, the Company is required to cancel the
Option(s); and
WHEREAS , the Company and the Optionee desire to cancel the
Option(s) in exchange for a cash payment.
NOW, THEREFORE , in consideration of the premises, the
Company and the Optionee agree as follows:
1.
Cancellation of the Option(s) . The Company and the Optionee
acknowledge and irrevocably agree that the Option(s) is hereby
automatically surrendered, canceled and shall cease to exist
immediately prior to the Effective Time of the Merger, as that term
is defined in the Merger Agreement. In addition, from the date of
execution of this Agreement to the Effective Time of the Merger,
the Optionee irrevocably agrees not to exercise any of the
Option(s).
2.
Payment to the Optionee . In consideration for the surrender
and cancellation of the Option(s) and the Optionee’s
irrevocable agreement to refrain from exercising the Option(s), the
Company is hereby providing to the Optionee a cash payment of One
Hundred dollars ($100.00). The payment, or any other payment to
which the Optionee is entitled from the Company, shall be reduced
for any required withholding taxes due as a result of the payment
hereunder.
3.
Release . Effective im
