CARROLS CORPORATION
STOCK OPTION AGREEMENT
(Nonqualified Stock Option)
THIS AGREEMENT, dated as of December 30, 1996 (the "Date of Grant") is
made by and between Carrols Corporation, a Delaware corporation (hereinafter
called the "Company") and Xxxxxx X. Xxxxxxxxx, an employee of the Company
(hereinafter referred to as the "Optionee"). All capitalized terms herein shall
have such meanings as are ascribed to them in the Plan and in this Agreement.
1. Grant and Approval of Option. The Company hereby grants to the
Optionee a nonqualified stock option (this "Option") to purchase all or any part
of the aggregate of 106,967.74 shares of $.01 par value common stock of Carrols
Holdings Corporation (the "Shares"), subject to all of the terms and conditions
of this agreement (the "Agreement") and the Carrols Corporation 1996 Long-Term
Incentive Plan (the "Plan").
2. Exercise Price and Period of Option. Subject to the terms and
conditions of the Plan and this Agreement, this Option shall become exercisable
(a) with regard to 37,753.32 Shares, on the Date of Grant, at an exercise price
per share (the "Exercise Price") of $29.7192; (b) with regard to 37,753.32
Shares, on December 31, 1997, at an Exercise Price of $35.1227; and (c) with
regard to 31,461.10 Shares, on December 31, 1997, at an Exercise Price of
$37.8245. If the Optionee's employment with the Company is terminated prior to
such dates, other then due to death, Permanent Disability, Retirement,
termination for Good Reason or termination without Cause, this Option shall not
become exercisable.
3. Expiration of Option. This Option may not be exercised to any
extent by Optionee after the first to occur of the following events:
(a) the tenth anniversary of the Date of Grant; or
(b) a Change of Control (as defined in the Plan).
4. Manner of Exercise.
(a) This Option shall be exercisable by delivery to the Secretary
of the Company of an executed written Notice and Agreement in the form attached
hereto as Exhibit A, or in such other form as may be required by the Company,
which shall set forth Optionee's election to exercise this Option, the number of
Shares being purchased and such other representations and agreements regarding
Optionee's investment intent and access to information as may be required by the
Company to comply with applicable securities laws.
(b) Such Notice and Agreement shall be accompanied by full
payment of the Exercise Price for the Shares being purchased (i) in cash
(including check, bank draft or money order); (ii) where approved by the
Committee in its sole discretion, by surrender of Shares of the Company owned by
the Optionee having a Fair Market Value equal to the Exercise Price; (iii) by
delivery of a promissory note to the Controlling Shareholder payable over a
three (3) year period and bearing interest at the rate provided under Section
1274(d) of the Code; (iv) by any combination of the foregoing where approved by
the Committee in writing in its sole discretion; or (v) any other method the
Committee may approve in its sole discretion, subject to the terms and
conditions of the Plan.
(c) Prior to the issuance of the Shares upon exercise of this
Option, Optionee must pay or, in a manner acceptable to the Company, make
adequate provision to pay, any applicable federal, state or local withholding
obligations as determined by the Company.
(d) Provided that the foregoing Notice and Agreement and payment
are in form and substance satisfactory to counsel for the Company, the Company
shall issue the Shares registered in the name of the Optionee, the Optionee and
the Optionee's spouse, or the Optionee's legal representative.
(e) Prior to the issuance of the Shares upon exercise of this
Option, the Optionee must execute a shareholders' agreement containing such
terms and conditions as determined by the Committee and approved by the Board of
Directors.
(f) Any exercisable portion of this Option or the entire Option,
if then wholly exercisable, may be exercised in whole or in part at any time
prior to the time when this Option becomes unexercisable under Paragraph 3;
provided, however, that any partial exercise shall be for whole Shares only.
(g) This Option may not be exercised unless such exercise is in
compliance with the Securities Act of 1933, as amended, and all applicable state
securities laws, as they are in effect on the date of exercise.
5. Redemption of Options Upon Change of Control. In the event
that (i) a Change of Control (as defined in the Plan) of the Company occurs
within five (5) years of the Date Of Grant; (ii) the Bahrain International Bank
E.C. has realized a return of its investment; and (iii) the successor
corporation neither assumes this Option nor agrees to substitute a substantially
equivalent option or options at least ten (10) days prior to the date of the
Change of Control, the Company shall redeem any options granted to the Optionee
pursuant to the Plan (including, but not limited to, this Option), in an amount
(the "Redemption Amount") determined pursuant to Schedule I attached hereto,
payable within thirty (30) days of the date of the Change of Control.
6. Compliance with Laws and Regulations. The issuance and
transfer of Shares shall be subject to compliance by the Company and the
Optionee with all applicable requirements of federal and state securities laws
and with all applicable requirements of any stock
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exchange on which the Company's shares may be listed at the time of such
issuance or transfer. Optionee understands that the Company is under no
obligation to register or qualify the Shares with the Securities and Exchange
Commission, any state securities commission or any stock exchange to effect such
compliance.
7. Nontransferability of Option. This Option may not be
transferred in any manner except (a) as determined by the Committee in its sole
discretion, or (b) pursuant to Paragraph 7(f) of the Plan.
8. Rights as Stockholder. The holder of the Option shall not be,
nor have any of the rights or privileges of, a stockholder of the Company with
respect to any shares purchasable upon the exercise of the Option or any portion
thereof, unless and until certificates representing such Shares shall have been
issued by the Company to such holder.
9. Sale by Controlling Shareholder. In the event the Controlling
Shareholder elects to sell or otherwise transfer to a third party (the
"Purchaser") any Shares owned (as of the effective date of the Plan) by the
Controlling Shareholder, the Optionee shall be entitled to sell to the Purchaser
the Shares issued to and owned by the Optionee pursuant to the Plan, as of the
same time and at the per share sale price to be received by the Controlling
Shareholder, up to an equivalent percentage of the Shares sold by the
Controlling Shareholder, in the following manner:
(i) the Controlling Shareholder shall notify the Optionee of
such sale or transfer and its material terms at least ten
(10) days prior to the effective date of such sale or
transfer;
(ii) within five (5) days thereafter, the Optionee shall notify
the Company of the number, if any, of such Shares owned by
the Optionee to be sold to the Purchaser (the "Participant
Shares"), subject to the limitations set forth above;
(iii) the Controlling Shareholder shall sell both its Shares
and, acting on behalf of the Optionee, the Participant
Shares, to the Purchaser and, to the extent necessary, the
Controlling Shareholder shall reduce the number of its
Shares available for sale to accommodate the sale of the
Participant Shares.
10. Consequences. Optionee shall be solely responsible for the
payment of any taxes due in connection with the Plan and this Option grant;
provided, however, that the Company may make such provisions as it may deem
appropriate for the withholding of any taxes which the Company determines it is
required to withhold in connection with the issuance, exercise or vesting of
this Option.
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11. Administration. The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee shall be final and
binding upon the Optionee, the Company and all other interested persons. No
member of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Option.
12. Notice. Any notice to be given under the terms of this
Agreement to the Company shall be addressed to the Company in care of its
Secretary, and any notice to be given to the Optionee shall be addressed to him
at the address given beneath his signature hereto. By a notice given pursuant to
this Paragraph 12, either party may hereafter designate a different address for
notices to be delivered. Any notice which is required to be given to the
Optionee shall, if the Optionee is deceased, be given to the Optionee's personal
representative. Any notice shall have been deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained by
the United States Postal Service.
13. Dividends. In the event the Committee provides that Awards
granted under the Plan earn dividends or dividend equivalents, such dividends or
dividend equivalents may, in the Committee's discretion and in accordance with
the terms of the Plan, (a) be paid currently, or (b) be credited to an account
established by the Committee under the Plan in the name of the Optionee.
14. Interpretation. Any dispute regarding the interpretation of
this Agreement shall be submitted by the Optionee or the Company forthwith to
the Committee, which shall review such dispute at its next regular meeting. The
resolution of such dispute by the Committee shall be final and binding on the
Company and on the Optionee.
15. Governing Document. This Agreement is in every respect
subject to the provisions of the Plan, as it may be amended from time to time.
The provisions of the Plan shall govern in the case of any inconsistency between
the Plan and this Agreement.
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16. Entire Agreement. The Plan and the Notice and
Agreement attached as Exhibit A are incorporated herein by reference. This
Agreement, the Plan and the Notice and Agreement constitute the entire
agreement of the parties and supersede all prior undertakings and
agreements with respect to the subject matter hereof.
CARROLS CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Its: Vice President
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ACCEPTANCE
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and provisions of the Plan and this
Agreement. Optionee acknowledges that there may be various tax consequences upon
exercise of this Option or disposition of the Shares and that Optionee should
consult a tax adviser prior to such exercise or disposition.
/s/ Xxxxxx X. Xxxxxxxxx
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Name
Xxxxxx X. Xxxxxxxxx
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0000 X. Xxxx Xx., Xxxxxxxxx, XX 00000
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Address
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Taxpayer Identification Number
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