EXHIBIT 10.7
Optionee:____________________
Grant Date:__________________
No. Shares:__________________
FMV Per Share on Date
of Grant:__________________
Exercise Price
Per Share:_________________
NONQUALIFIED STOCK OPTION AGREEMENT PURSUANT
TO THE HOSPITALITY MARKETING CONCEPTS INC. 1998 STOCK OPTION PLAN
I. IDENTIFICATION. This Nonqualified Stock Option Agreement (the
"Agreement") is made by and between Hospitality Marketing Concepts Inc., a
Delaware corporation (the "Company"), and ___________________________ (the
"Optionee") as of ____________, 199_.
2. RECITALS.
2.1 On __________, ___, 1998, the Board of Directors of the
Company adopted the Hospitality Marketing Concepts Inc. 1998 Stock Option
Plan (the "Plan") providing for the grant of incentive stock options and
nonqualified stock options to key employees, directors, consultants and
service providers of the Company or any of its Subsidiaries (as defined in
the Plan).
2.2 The shareholders of the Company approved the Plan on
____________.
2.3 Optionee is a (______) director (_______) consultant or
service provider of the Company and/or one or more of its Subsidiaries to
whom options may be granted under the Plan.
2.4 The Stock Option and Compensation Committee (the "Committee")
of the Board of Directors of the Company has authorized the grant to Optionee
of an option to purchase the Company's Common Stock upon the terms and
conditions hereinafter set forth.
3. GRANT OF OPTION. Pursuant to the action of the Committee, and
subject to the terms and conditions of this Agreement and the terms and
conditions of the Plan, the Company grants to Optionee an option to purchase
________ (___) shares of the Company's authorized and unissued Common Stock
from the Company at the price of __________________ Dollars ($______) per
share (the "Option"). The Option will be a nonqualified stock option and not
an incentive stock option pursuant to Section 422
of the Internal Revenue Code of 1986, as amended (the "Code").
4. TERM OF OPTION. The Option was granted on ______________, 199_ (the
"Grant Date"). Unless previously exercised pursuant to Section 5, the Option
shall terminate on, and shall not be exercisable after, the expiration of
(_____) years after the Grant Date [not to exceed ten (10) years or five (5)
years in the case of any person who owns more than 10% of the Voting Securities
of the Company, as defined in the Plan.].
5. EXERCISE.
5.1 EXERCISABILITY. Subject to the terms and conditions of this
Agreement, the Option shall become exercisable in _______________ equal
cumulative installments of _________ shares of the Company's Common Stock
(individually an "Installment" and collectively the "Installments").
Optionee may exercise the Option with respect to each Installment on or after
each successive annual anniversary of the Grant Date according to the
following schedule:
Installment Exercise Date
(number of -------------
shares becoming
exercisable)
----------------
First
Anniversary _________________ ________________
Second
Anniversary _________________ ________________
Third
Anniversary _________________ ________________
Fourth
Anniversary _________________ ________________
Fifth
Anniversary _________________ ________________
Sixth
Anniversary _________________ ________________
Seventh
Anniversary _________________ ________________
Eighth
Anniversary _________________ ________________
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Ninth
Anniversary _________________ ________________
5.2 5.3 NOTICE OF EXERCISE. Optionee shall exercise the Option
by (i) notifying the Secretary of the Company of Optionee's election to
exercise the Option and (ii) paying in full the purchase price as provided in
Section 5.3.
5.4 PAYMENT OF PURCHASE PRICE. The purchase price for any shares
of Common Stock with respect to which Optionee exercises the Option shall be
paid in full promptly after Optionee gives notice of exercise as provided in
Section 5.2. The purchase price shall be paid: (a) in cash or by check in
United States dollars, or (b) if, and only if, the Committee so authorizes in
its sole discretion, at the time Optionee gives notice of exercise, (i) by
transferring to the Company for redemption, Common Stock of the Company at
its "Fair Market Value" (as defined in the Plan), with share certificates
duly endorsed and accompanied by instruments of transfer with signatures
guaranteed, or (ii) by surrendering to the Company for cancellation one or
more Options granted to Optionee under the Plan at their respective Option
Values (as defined in the Plan), or (c) by foregoing compensation payable to
Optionee as set forth on Schedule 1 attached hereto, or (d) if, and only if,
the Committee so authorizes in its sole discretion, a combination of (a),
(b)(i), (b)(ii), and/or (c). If Optionee desires to pay all or a portion of
the purchase price for the shares by transferring to the Company Common Stock
for redemption, or surrendering Options for cancellation, Optionee shall so
notify the Secretary of the Company with the notice of Optionee's election to
exercise the Option in accordance with Section 5.2. Promptly after receipt
of Optionee's notice of exercise and request for payment by redemption or
cancellation, the Company shall notify Optionee of its decision as to whether
it will permit Optionee to pay the purchase price by transferring the
Company's Common Stock to it for redemption or transferring Options to it for
cancellation, or by foregoing compensation payable. If the Committee does
not authorize the proposed payment by redemption or cancellation or by
foregoing compensation payable, Optionee shall pay the purchase price in cash
or by check in United States dollars as provided above.
6. ISSUANCE OF SHARES. Promptly after the Company's receipt of
notification of exercise provided for in Section 5.2 and Optionee's payment
in full of the purchase price, the Company shall deliver, or cause to be
delivered, to Optionee a certificate for the whole number of shares with
respect to which the Option is being exercised by Optionee. Shares shall be
registered in the
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name of Optionee. If any law or regulation of the Securities and Exchange
Commission or of any other federal or state governmental body having
jurisdiction shall require the Company or Optionee to take any action prior
to the issuance to Optionee of the shares of Common Stock of the Company
specified in the written notice of election to exercise, the date for the
delivery of such shares shall be adjourned until the completion of such
action.
7. TERMINATION OF SERVICE; DEATH; PERMANENT DISABILITY. If Optionee's
service with the Company is terminated for any reason (other than permanent
disability or dismissal for Cause as defined in the Plan) while Optionee is
still living, the Option or any unexercised Installments, to the extent the
Option would have been exercisable by Optionee on the date on which he ceases
to be in service (the "Termination Date"), may be exercised by Optionee
within ____ months from the Termination Date (the "Post-Termination Period"),
but in any event not later than the expiration date of the Option. If
Optionee dies or becomes "permanently disabled" (a physical or mental
impairment as defined in Section 22(e)(3) of the Code) while he is in service
with the Company or during the Post-Termination Period (if the Optionee's
termination was for any reason other than Cause), the Option or any
unexercised Installment, to the extent exercisable by him on the date of
death or permanent disability, may be exercised by Optionee, or if Optionee
is then deceased or legally incapacitated, by Optionee's personal
representative, heirs, or legatees, at any time prior to the expiration of
____ months from the Termination Date, but in any event, not later than the
expiration date of the Option. In the Committee's sole discretion, all or
any unexercisable Options or Installments may become exercisable on the date
of Optionee's death, so that such Options or Installments may be exercised
pursuant to this Section 7 even though they would not otherwise have been
exercisable had Optionee not died. Unexercisable Options or Installments
[shall (__)] [shall not (__)] become exercisable on the date of Optionee's
death. Notwithstanding the foregoing, if Optionee's service with the Company
is terminated for Cause as determined by the Committee in its sole
discretion, the Option shall expire on the Termination Date and thereafter
shall not be exercisable in whole or in part.
8. ASSIGNMENT OR TRANSFER. The Option is not assignable or
transferable except by will or by the laws of descent and distribution and
during Optionee's lifetime the Option may be exercised only by Optionee. No
transfer of the Option by will or by the laws of descent and distribution
shall be effective, nor shall any designation of a person who may exercise
the Option after Optionee's death be effective to bind the Company unless the
Company is furnished with a written notice thereof and a copy of
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the will or such other evidence as the Company deems necessary to establish
the validity of the transfer and the acceptance of the terms and conditions
of the Option by the transferee or designee.
9. NO RIGHTS AS SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to shares of the Common Stock covered by this Option
until the date of the issuance of a stock certificate or stock certificates
evidencing issuance of such shares pursuant to Optionee's exercise of the
Option. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 10 hereof.
10. MODIFICATION AND TERMINATION.
10.1 The rights of Optionee under this Agreement are subject to
modification and termination as provided in the Plan.
10.2 If the number of issued and outstanding shares of Common
Stock changes as a result of a stock split, reverse stock split, stock
dividend, recapitalization, or any other change in the capital structure of
the Company, the Committee, subject to approval by the Board, may
appropriately adjust (a) the maximum number of shares which may be issued
under the Plan, (b) the number of shares subject to each outstanding option,
and (c) the price per share of each Option (but not the total price thereof),
so that upon exercise of the Option, Optionee will receive the same number of
shares he would have received had he been the holder of all shares subject to
his outstanding Options immediately before the effective date of the change
in the number of issued shares of Common Stock. The adjustment shall not
result in the issuance of fractional shares.
10.3 If the Company liquidates, merges, reorganizes, or
consolidates with any other corporation in which the Company is not the
surviving corporation or the Company becomes a wholly-owned subsidiary of
another corporation, any unexercised option previously granted under the Plan
shall be deemed canceled unless the surviving corporation in any merger,
reorganization or consolidation elects to assume the options under the Plan
or to issue substitute options in place thereof. If options are to be
canceled in accordance with the foregoing, Optionee shall have the right,
exercisable during a thirty (30)-day period, ending on the fifth day prior to
the liquidation, merger, reorganization or consolidation, to exercise
Optionee's Options, in whole or in part, without regard to any installment
exercise provisions in this Agreement.
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10.4 The grant of the Option pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations, or changes in its capital structure; to
merger, consolidate, or dissolve; to change its business structure; or to
liquidate, sell or transfer all or any part of its business or assets.
11. NO RIGHT TO EMPLOYMENT. Nothing in this Agreement, the Plan, or
any instrument executed pursuant to the Plan shall confer upon Optionee the
right to continue to be employed or retained by the Company or any
Subsidiary, affect the right of the Company or any Subsidiary to terminate
the employment or service of Optionee with or without Cause, or be evidence
of any agreement or understanding, express or implied, that the Company or
any Subsidiary will employ or retain or continue to employ or retain Optionee
in a particular position or at a particular rate of remuneration.
12. COMPLIANCE WITH SECURITIES LAWS. At the time the Option is
exercised, the Company may require Optionee to execute any documents or take
any action which may be then necessary to comply with the Securities Act of
1933, as amended, and the rules and regulations adopted thereunder, or any
other applicable federal or state laws for the purpose of regulating the sale
and issuance of securities. The Company reserves the right to change its
requirements with respect to enforcing compliance with federal and state
securities laws, including the request for, and enforcement of, letters of
investment intent, such requirements to be determined by the Company in its
judgment as necessary to assure compliance with such laws. Such changes may
be made, with respect to this Option, upon exercise hereof, or prior to or
after the exercise of this Option. The Company shall not be obligated to
issue any shares upon the exercise of this Option unless the issuance, in the
judgment of the Board, is in full compliance with all applicable laws,
governmental rules and regulations, undertakings of the Company made under
the Securities Act of 1933, as amended, any state securities laws, and stock
exchange agreements of the Company.
13. GENERAL PROVISIONS.
13.1 SUBJECT TO PLAN. This Agreement shall conform with, and be
subject to, all of the terms and conditions of the Plan. Any conflict or
inconsistency between this Agreement and the Plan shall be resolved in
conformity with, and shall be governed by, the Plan. The Plan is attached
hereto as Exhibit "A" and incorporated herein by this reference.
13.2 FURTHER ACTS. Optionee agrees to perform all further acts and
to execute and deliver any other and additional
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documents as may be reasonably necessary to carry out the provisions of this
Agreement.
IN WITNESS WHEREOF, this Agreement is executed by the parties on the date
and at the place indicated below.
"COMPANY"
HOSPITALITY MARKETING CONCEPTS INC.,
a Delaware corporation
Executed on _________, 199_
at __________, ____________. By:___________________________
Its________________________
"OPTIONEE"
Executed on _________, 199_
at __________, ____________. ______________________________
Optionee's Name
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