EXHIBIT 10.6
TEJON RANCH CO.
AMENDED AND RESTATED STOCK OPTION AGREEMENT
Pursuant to the
1992 EMPLOYEE STOCK INCENTIVE PLAN
This Incentive Stock Option Agreement ("Agreement") is made
and entered into as of the Date of Grant indicated below by and
between Tejon Ranch Co., a Delaware corporation (the "Company"),
and the person named below as Optionee.
WHEREAS, Optionee is an employee, officer or director of the
Company and/or one or more of its subsidiaries;
WHEREAS, pursuant to the Company's 1992 Employee Stock
Incentive Plan (the "1992 Plan"), the Compensation Committee of
the Board of Directors of the Company administering the 1992 Plan
(the "Committee") approved the grant to Optionee of an option to
purchase shares of the Common Stock, par value $.50 per share, of
the Company (the "Common Stock"), on the terms and conditions set
forth in a Stock Option Agreement entered into by Optionee and
the Company as of the Date of Grant; and
WHEREAS, on April 7, 1997 the terms of said option were
amended to change the date when it becomes exercisable and to
change the Exercise Price per share set forth in Section 1 to an
amount equal to the Fair Market Value per share of Common Stock
(as defined in Section 2) on April 7, 1997;
NOW, THEREFORE, in consideration of the foregoing recitals
and the covenants set forth herein, the parties hereto hereby
amend and restate their agreement as so amended:
1. Grant of Option; Certain Terms and Conditions. The
Company hereby grants to Optionee, and Optionee hereby
accepts, as of the Date of Grant indicated below, an option
(the "Option") to purchase the number of shares of Common
Stock indicated below (the "Option Shares") at the Exercise
Price per share indicated below. The Option shall become
exercisable on and after the Vesting Dates indicated below
as to the number of shares indicated with respect to each
such Vesting Date, except as otherwise provided in
Section 3. The Option shall expire at 5:00 p.m., Los
Angeles, California time, on the Expiration Date indicated
below and shall be subject to all of the terms and
conditions set forth in this Agreement.
Optionee:
Date of Grant:
Number of shares purchasable:
Exercise Price per share:
Expiration Date:
Vesting Dates:
2. Incentive Stock Option; Internal Revenue Code
Requirements. The Option is intended to qualify as an
incentive stock option under Section 422 of the Internal
Revenue Code (the "Code") except to the extent that the
aggregate Fair Market Value (determined as of the Date of
Grant) of the shares of Common Stock with respect to which
the Option is exercisable for the first time by Optionee
during any calendar year (under the 1992 Plan and all other
stock option plans of the Company and its subsidiaries)
exceeds $100,000. Such excess shares are intended to be
treated as shares issued pursuant to an Option that is not
an incentive stock option described in Section 422 of the
Code, in accordance with Section 422(d) of the Code. The
number of such excess shares as to which this option is not
intended to be treated as an incentive option is 3,750.
The "Fair Market Value" of a share of Common Stock or other
security on any day shall be equal to the last sale price,
regular way, per share or unit of such other security on
such day or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular
way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the American
Stock Exchange or, if the shares of Common Stock or such
other security are not listed or admitted to trading on the
American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the shares of Common Stock or such other
security are listed or admitted to trading or, if the shares
of Common Stock or such other securities are not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market
as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System or such other
system then in use or, if on any such date the shares of
Common Stock or such other security are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in shares of Common Stock or such other security
selected by the Board of Directors.
3. Acceleration and Termination of Option.
(a) Termination of Employment.
(i) Definition of Termination. In the event that
Optionee shall cease to be an employee of the
Company or any of its subsidiaries voluntarily or
involuntarily or for any reason whatever, such
event is referred to in this Agreement as a
"Termination" of Optionee's "Employment."
(ii) Normal Termination. If Optionee's Employment
is Terminated for any reason other than those
enumerated in this Section 3(a)(ii), then the
Option shall terminate three (3) months from the
date of such Termination of Employment but in no
event later than the Expiration Date. During such
three month period, the Option shall be
exercisable only if the date of Termination of
Employment is after the ninth anniversary of the
Date of Grant.
(iii) Death or Permanent Disability. In the
event of a Termination of Optionee's Employment by
reason of the death of Permanent Disability (as
hereinafter defined) of Optionee, the Option shall
terminate on the first anniversary of the date of
such Termination of Employment or the Expiration
Date, whichever is earlier.
"Permanent Disability" shall mean the inability to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than
twelve (12) months. The Optionee shall not be deemed to
have a Permanent Disability unless proof of the existence
thereof shall have been furnished to the Committee in such
form and manner, and at such times, as the Committee may
require. Any determination by the Committee that Optionee
does or does not have a Permanent Disability shall be final
and binding upon the Company and Optionee.
(b) Death or Permanent Disability Following
Termination of Employment. Notwithstanding anything to
the contrary in this Agreement, if Optionee shall die
or suffer a Permanent Disability at any time after the
Termination of his or her Employment and prior to the
Expiration Date, then to the extent that the Option was
exercisable on the date of such death or Permanent
Disability the Option shall terminate on the earlier of
the Expiration Date or the first anniversary of the
date of such death.
(c) Acceleration of Option Upon a Change of Control.
The Option shall become fully exercisable with respect
to all Option Shares in the event of a Change of
Control. A "Change of Control" shall mean the first to
occur of the following events:
(i) a reorganization, merger or consolidation of
the Company, the issuance or transfer of
securities of the Company in one transaction or
series of related transactions or any other
transaction or series of related transactions in
each case if and only if as a result of the
transaction or transactions persons other than the
shareholders immediately prior to such transaction
or transactions shall own 80% or more of the
voting securities of the Company or its successor
after the transaction;
(ii) the sale or transfer by the Company of all or
substantially all of its property and assets in a
single transaction or series of related
transactions; or
(iii) the dissolution or liquidation of the
Company.
(d) Discretionary Acceleration. The Committee, in its
sole discretion, may
accelerate the exercisability of the Option for
any reason, including without limitation in the
event of death or disablement of Optionee or
termination of employment of Optionee by the
Company other than for cause.
(e) Other Events Causing Termination of Option.
Notwithstanding anything to the contrary in this
Agreement, the Option shall terminate in the event of
the occurrence of an event referred to in clause (ii)
or (iii) of paragraph (c) above or a merger or
consolidation referred to in clause (i) of
paragraph (c) above (a "Termination Event") (even if
such Termination Event occurs after an event referred
to in clause (i) of said paragraph (c) above which is
not a Terminating Event) unless the terms of any such
transaction constituting the Terminating Event
otherwise provide. Such termination shall occur on the
30th day following any such Terminating Event (or such
later date as the Board of Directors or the Committee
shall determine) unless the Board of Directors or the
Committee (i) sets an earlier date which is at least
ten days prior to the occurrence of the Terminating
Event, (ii) notifies the Optionee in writing at least
ten days before the occurrence of the Terminating Event
of the setting of such date and (iii) accelerates the
exercisability of the Option to the extent it would
otherwise be exercisable for any part of the thirty day
period after such event pursuant to Section 1 or
pursuant to paragraph (c) above so that, to such
extent, the Option could be exercised for a period of
at least ten days prior to the occurrence of the
Terminating Event. In such event where the
requirements of clauses (i), (ii) and (iii) of the
preceding sentence are met, the Option shall expire
immediately upon the occurrence of the Terminating
Event.
4. 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 cash dividend paid out of earned surplus) 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, 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.
5. Exercise. The Option shall be exercisable during
Optionee's lifetime only by Optionee or by his or her
guardian or legal representative, and after Optionee's death
only by the person or entity entitled to do so under
Optionee's last will and testament or applicable intestate
law. The Option may only be exercised by the delivery to
the Company of a written notice of such exercise pursuant to
the notice procedures set forth in Section 7 hereof, 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 as follows:
(a) 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 power,
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 thereof on the date of
such exercise), provided that the Company is not then
prohibited from purchasing or acquiring such shares of
Common Stock; and/or
(b) by reducing the number of shares of Common Stock
to be issued and delivered to Optionee upon such
exercise (such reduction to be valued on the basis of
the aggregate Fair Market Value (determined on the date
of such exercise) of the additional shares of Common
Stock that would otherwise have been issued and
delivered upon such exercise), provided that the
Company is not then prohibited from purchasing or
acquiring such shares of Common Stock.
The balance of the Exercise Price not paid by an exchange of
shares pursuant to (a) or (b) above shall be paid in cash or
by a cashier's or certified bank check payable to the
Company.
The Optionee will be obligated to pay the Exercise Price in
the manner contemplated by (a) and/or (b) above and will be
permitted to pay the Exercise Price in cash only to the
extent that it cannot be paid in the manner provided in (a)
and (b) above. Notwithstanding the foregoing, the Optionee
shall be obligated to pay the Exercise Price in the manner
contemplated by (a) above only to the extent that he or she
owns shares of Common Stock beneficially, has the power to
dispose of those shares and such disposition contemplated by
(a) above would not constitute a "disqualifying disposition"
of shares resulting in a loss of the special tax treatment
afforded incentive stock options.
6. Payment of Withholding Taxes.
(a) If the Company is obligated to withhold an amount
on account of any federal, state or local tax imposed
as a result of the exercise of the Option, including,
without limitation, any federal, state or other income
tax, or any F.I.C.A., state disability insurance tax or
other employment tax, then Optionee shall, concurrently
with such exercise, pay such amount (the "Withholding
Liability") to the Company in cash or by a cashier's or
certified bank check payable to the Company; provided,
however, that, in the discretion of the Committee, the
Optionee may, pursuant to an irrevocable election of
Optionee (a "Withholding Election") made on or prior to
the date of such exercise, instead pay all or any part
of the Withholding Liability in the following manner:
(i) 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 thereof on the
date of such exercise), provided that the Company
is not then prohibited from purchasing or
acquiring such shares of Common Stock; and/or
(ii) by reducing the number of shares of Common
Stock to be issued and delivered to Optionee upon
such exercise (such reduction to be valued on the
basis of the aggregate Fair Market Value
(determined on the date of such exercise) of the
additional shares of Common Stock that would
otherwise have been issued and delivered upon such
exercise), provided that the Company is not then
prohibited from purchasing or acquiring such
shares of Common Stock.
(b) The Committee shall have sole discretion to
approve or disapprove any Withholding Election and may
adopt such rules and regulations as are consistent with
and necessary to implement the foregoing. The
Committee may permit Optionee to make a Withholding
Election to pay withholding taxes in excess of the
minimum amount required by law, provided that the
amount of withholding taxes so paid does not exceed the
estimated total federal, state and local tax liability
of Optionee attributable to such exercise.
7. Notices. Any notice given to the Company shall be
addressed to the Company at X.X. Xxx 0000, Xxxxx, Xxxxxxxxxx
00000, Attention: President, or at such other address as
the Company may hereinafter designate in writing to
Optionee. Any notice given to Optionee shall be sent to the
address set forth below Optionee's signature hereto, or at
such other address as Optionee may hereafter designate in
writing to the Company. Any such notice shall be deemed
duly given when delivered personally or five days after
mailing by prepaid certified or registered mail return
receipt requested.
8. Stock Exchange Requirements; Applicable Laws.
Notwithstanding anything to the contrary in this Agreement,
no shares of stock issuable upon exercise of the Option, and
no certificate representing all or any part of such shares,
shall be purchased, 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.
9. Restrictions on Transferability.
(a) 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.
(b) By accepting the Option, the Optionee for himself
or herself and his or her transferees by will or the
laws of descent and distribution, represent and agree
that all shares of Common Stock purchased upon exercise
of the Option will be acquired for investment and not
with a view to the distribution thereof unless they
have been registered under the Securities Act of 1933,
and will otherwise be acquired, held and disposed of
and held in accordance with the restrictions of said
Act and the rules and regulations of the Securities and
Exchange Commission thereunder, that the Company may
instruct its transfer agent to restrict further
transfer of said shares in its records except upon
receipt of satisfactory evidence that such restrictions
have been satisfied, that upon each exercise of any
portion of the Option, the certificates evidencing the
purchased shares shall bear an appropriate legend on
the face thereof evidencing such restrictions, and that
the person entitled to exercise the same shall furnish
evidence satisfactory to the Company (including a
written and signed representation) to the effect that
the shares are being acquired subject to such
restrictions.
10. 1992 Plan. The Option is granted pursuant to the 1992
Plan, as in effect on the Date of Grant, and is subject to
all the terms and conditions of the 1992 Plan, as the same
may be amended from time to time; provided, however, that no
such amendment shall deprive Optionee, without his or her
consent, of the Option or of any of Optionee's rights under
this Agreement. The interpretation and construction by the
Committee of the 1992 Plan, this Agreement, the Option and
such rules and regulations as may be adopted by the
Committee for the purpose of administering the 1992 Plan
shall be final and binding upon Optionee. Until the Option
shall expire, terminate or be exercised in full, the Company
shall, upon written request therefor, send a copy of the
1992 Plan, in its then-current form, to Optionee or any
other person or entity then entitled to exercise the Option.
11. 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
and the Option Shares have been issued.
12. Employment Rights. No provision of this Agreement or
of the Option granted hereunder shall (a) confer upon
Optionee 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 Optionee, with or without cause, or (c) confer
upon Optionee 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 1992 Plan. The
Optionee hereby acknowledges and agrees that the Company and
each of its subsidiaries may terminate the employment of
Optionee at any time and for any reason, or for no reason,
unless Optionee and the Company or such subsidiary are
parties to a written employment agreement that expressly
provides otherwise.
13. Effect on Other Agreement. This Agreement supersedes
the Stock Option Agreement between the Optionee and the
Company previsouly entered into with respect to the Option
and dated as of the Date of Grant.
14. 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 Delaware.
IN WITNESS WHEREOF, the Company and Optionee have duly
executed this Agreement as of the Date of Grant.
TEJON RANCH CO. OPTIONEE
By: ________________________________
Name:
Title: ____________________________________
Signature ____________________________________
Xxxxxx Xxxxxxx _______________________________
City, State and Zip Code______________________
Social Security Number
