Exhibit 10.10
AGREEMENT REGARDING STOCK OPTIONS
This Agreement Regarding Stock Options (the "Agreement") is made and
entered into this 5th day of January, 1998, by and between Xxxxx X. Xxxxxxxx,
Xx. ("Xxxxxxxx") and Cross-Continent Auto Retailers, Inc. ("C-CAR").
RECITALS
A. The Board of Directors of C-CAR has determined that the interests of
C-CAR are advanced by encouraging and enabling certain employees of its
subsidiaries to acquire an equity interest in C-CAR, thus providing a closer
identification of their interests with those of C-CAR.
B. The Board of Directors of C-CAR has authorized C-CAR to grant certain
stock options to Xxxxxxxx if the dealerships owned by JRJ Investments, Inc.
(the "Dealerships") earn certain levels of net income during the period of
Xxxxxxxx'x employment as general manager of the Dealerships (the "Employment
Period").
X. Xxxxxxxx and C-CAR desire to evidence their agreement concerning
C-CAR's granting of stock options to Xxxxxxxx for the performance of the
Dealerships during the Employment Period.
AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which
is hereby acknowledged, Xxxxxxxx and C-CAR agree as follows:
1. C-CAR shall grant to Xxxxxxxx a non-qualified option to acquire the
number of shares of C-CAR's common stock that are set forth below opposite
the respective amount of Net Earnings (hereinafter defined) earned by the
Dealerships during any calendar year that begins and ends during the
Employment Period:
Net Earnings Number of Shares
------------ ----------------
Less than $3,000,000 0
$3,000,000 5,000
$3,500,000 10,000
$4,000,000 15,000
$4,500,000 20,000
$5,000,000 or more 25,000
As used in this Agreement, the term "Net Earnings" shall mean, on an
annual basis:
(a) gross revenues from all sources relating to the
operation of the Dealerships, less
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(b) all cost of sales; general and administrative expenses;
salaries, bonuses, commissions, and other compensation;
depreciation; amortization; interest; dealership
overhead; and $25,000 per month as and for the portion
of C-CAR's corporate overhead charged to the
Dealerships; but before income taxes.
Net Earnings shall be calculated on the accrual method of accounting and
determined by C-CAR's accounting staff in accordance with generally accepted
accounting principles.
2. In addition, C-CAR shall grant to Xxxxxxxx a non-qualified option to
acquire the number of shares of C-CAR's common stock that are set forth below
opposite the respective amount of Net Earnings earned by the Dealerships
during the period from November 1, 1997 to December 31, 1997 (the "1997
Period"):
Net Earnings Number of Shares
------------ ----------------
Less than $500,000 0
$500,000 833
$583,333 1,667
$666,667 2,500
$750,000 3,333
$833,333 or more 4,167
3. If Xxxxxxxx has earned an option for the 1997 Period or for any
calendar year during the Employment Period, the option shall be granted as of
December 31 of such year, with a purchase price equal to the closing price
for C-CAR's common stock quoted in THE WALL STREET JOURNAL for the last
trading day of such year.
4. Each option shall expire ten (10) years after the date of grant, unless
terminated earlier in accordance with the stock option agreement to be
entered into by and between Xxxxxxxx and C-CAR at the time the option is
granted to Xxxxxxxx.
5. Twenty percent (20%) of each option granted to Xxxxxxxx shall vest when
granted and twenty percent (20%) of the option shall vest December 31 of each
year thereafter during the Employment Period, provided that if Xxxxxxxx is
general manager of the Dealerships on October 31, 2000, but is not the
general manager of the Dealerships on December 31, 2000, twenty percent (20%)
of each option that has been granted to Xxxxxxxx shall vest on October 31,
2000.
6. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
7. This Agreement shall be binding upon and shall inure the benefit of the
parties hereto and their respective heirs, administrators, executors,
successors and assigns.
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8. Each option granted to Xxxxxxxx under the terms and provisions of this
Agreement shall be subject to the terms and provisions of (a) C-CAR's stock
option plan then in effect, and (b) the stock option agreement to be entered
into by and between Xxxxxxxx and C-CAR at the time the option is granted to
Xxxxxxxx. Each stock option agreement entered into by and between Xxxxxxxx
and C-CAR at the time an option is granted to Xxxxxxxx shall be substantially
in the form of C-CAR's then standard stock option agreement.
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Xxxxx X. Xxxxxxxx Xx.
CROSS-CONTINENT AUTO RETAILERS, INC.
By:
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R. Xxxxx Xxxxx, Secretary
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