RESTAURANT TEAMS INTERNATIONAL, INC.
2000 INCENTIVE STOCK OPTION PLAN
I. Purpose of the Plan
Restaurant Teams International 2000 Incentive Stock Option Plan (the
"Plan") is intended to provide a means whereby key employees of Restaurant Teams
International, a Texas corporation (together with any "parent" or "subsidiary"
as defined in Section 424 of the Code, the "Company"), may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to remain with and devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its shareholders. Accordingly, the company may grant to key
employees ("Options") the option (the "Option") to purchase shares of Common
Stock, without par value (the "Stock"), of Restaurant Teams International, Inc.
as hereinafter set forth. It is intended that Options granted under the Plan
will qualify as "incentive stock options" as defined under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). No stock options other
than incentive stock options may be granted under the Plan.
II Administration
The Plan shall be administered by the Board of Directors of the Company
or such committee of members of the Board as the Board may appoint (the
"Committee"); however, if the Company becomes subject to the reporting
requirements of the Securities Exchange Act of 1934 ("1934 Act"), the members of
the Committee shall be "disinterested person" within the meaning of paragraph
(d)(8) of Rule 16b-3 which has been adopted by the Securities and Exchange
Commission under the 1934 Act, as such Rule or its equivalent is then in effect.
Committee members may resign at any time by delivering written notice to the
Board of Directors. Vacancies in the Committee, however caused, shall be filled
by the Board of Directors. The Committee shall have sole authority to select the
persons who are to be granted Options from among those eligible hereunder and to
establish the number of shares which may be issued under each Option. The
Committee is authorized to interpret the Plan and may from time to time adopt
such rules and regulations, not inconsistent with the provision of the Plan, as
it may deem advisable to carry out the Plan. The Committee shall act by a
majority of its members in office and the Committee may act either by vote at a
telephonic or other meeting or by a memorandum or other written instrument
signed by all of the members of the Committee. All decision made by the
Committee in selecting the persons to whom Options shall be granted, in
establishing the number of shares which may be issued under each Option, and in
constructing the provision of the Plan shall be final. In its
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absolute discretion, the Board of Directors may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan.
The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company as shall be designated from time to time
by the Committee. Members of the Committee shall not receive compensation for
their services as members, but all expenses and liabilities they incur in
connection with the administration of the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers, or other persons, and the Committee, the Board the Company and the
officers and employees of the Company shall be entitled to rely upon the advice,
opinions, or valuations of any such persons. The interpretation and construction
by the Committee of any provision of the Plan or of any grant under the Plan and
any determination by the Committee under any provision of the Plan or any such
grant shall be final and conclusive for all purposes. Neither the Committee not
any member thereof shall be liable for any act, omission, interpretation,
construction, or determination made in connection with the Plan in good faith,
and the members of the Committee shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage, or expense
(including counsel fees) arising there from to the full extent permitted by law.
The members of the Committee shall be named as insureds under any directors and
officers' liability insurance coverage that may be in effect from time to time.
III. Eligibility of Optionee
(a) Options may be granted only to individuals who are key
employees (including officers who are also key employees) and directors of the
Company (collectively referred to herein as "employee") at the time the Option
is granted. Options may be granted to the same individual on more than one
occasion. In no event shall any employee or his legal representatives, heirs,
legatees, distributes, or successors have any right to participate in the Plan
except to such extent, if any, as the Committee shall determine.
(b) No employee shall be eligible to receive any Option if, on the
Grant Date, such employee owns (including ownership through the attribution
provision of Section 424 of the Code), in excess of ten percent (10%) of the
outstanding voting stock of the Company (or of its parent or subsidiary as
defined in Section 424 of the Code) unless the following two conditions are met:
(i) the option price for the shares of Stock subject to the
Option is at least 110% of the fair market value of the shares of Stock
on the date the Option is granted (the "Grant Date"); and
(ii) the Option Agreement (defined below) provides that the
term of the Option does not exceed five (5) years.
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(c) No employee shall be eligible to receive Options under this
Plan (and all other option plan of the Company) that are exercisable for the
first time by such Optionee in any calendar year with respect to stock with an
aggregate fair market value (determined at the Grant Date) in excess of
$100,000.
IV. Shares Subject to the Plan
The aggregate number of shares of Stock which may be issued under
Options granted under the Plan shall not exceed 1,000,000 shares. Such shares
may consist of authorized by unissued shares of Stock or previously issued
shares of Stock reacquired by the Company. Any of such shares which remain
unissued and which are not subject to outstanding options at the termination of
the Plan shall cease to be subject to the Plan, but until termination of the
Plan, the Company shall at all times make available a sufficient number of
shares to meet the requirements of the Plan. Should any Option hereunder expire
or terminate prior to its exercise in full, the shares theretofore subject to
such Option may again be subject to an Option granted under the Plan. The
aggregate number of shares which may be issued under Options granted under the
Plan shall be subject to adjustment as provided in Paragraph VIII hereof.
Exercise of an Option in any manner, or cancellation of an Option as provided in
Paragraph V hereof (except the last paragraph of said Paragraph V), shall result
in a decrease in the number of shares of Stock which may thereafter be available
for purposes of the Plan by the number of shares as to which the Option is
exercised or cancelled.
V. Option Agreements
Each Option shall be evidenced by a written agreement (an "Option
Agreement") executed by the Optionee and an authorized officer of the Company,
which shall contain such terms, conditions, and restrictions, and may be
exercisable at such times and for such periods, as may be approved by the
Committee; provided, however, that no option may be exercised to any extent
after, and every Option shall expire no later than, the tenth anniversary of the
Grant Date. Options that are granted shall be evidence by Option Agreements in
the form approved by the Board. The terms, conditions, and restrictions of
separate Option Agreements need not be identical. Specifically, an Option
Agreement (i) may provide for the cancellation at any time by the Company in its
sole discretion of the right of purchase all or part of the shares under the
option in return for a payment in cash or shares of Stock or a combination of
cash and shares of Stock equal in value to the excess (if any of the fair market
value of the shares with respect to which the right to provide that upon
exercise of the Option, such exercise may be treated by the Company as a
cancellation of the Option with respect to those shares by the payment to the
Optionee of the spread, all on such terms and conditions as the Committee in its
sole discretion may prescribe. Moreover, an Option Agreement may provide for the
payment of the option price, in whole or in part, by the delivery of a number of
shares of Stock (plus cash if necessary) having a fair market value equal to
such option price.
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The purchase price per share of Stock issued under each Option shall be
determined by the Committee and shall not be less than the fair market value of
a share of Stock on the Grant Date of 110% of such value in the case of a holder
of 10% of the Stock of the Company. For the purposes of the Plan and any Option
Agreement, the determination of the fait market value of a share of Stock on any
particular date shall be made in good faith by the Committee and such
determination shall be binding for all purposes.
The Committee may accelerate the exercisability of any Option in its
sole discretion and also may modify an outstanding Option, including reducing
the exercise price of the Option, or cancel an outstanding Option in exchange
for the grant of a new Option with such terms and conditions that are in
accordance with the Plan at the time of such grant; provided that any Option, as
so amended, or any such new Option, will qualify as an incentive stock option
under Section 422 of the Code.
VI. Exercise of Option
During the lifetime of the Optionee, only the Optionee (or if
incapacitated, his duly authorized representative) may exercise an Option
granted to him, or any portion thereof. After the death of Optionee, any
exercisable portion of an Option may, prior to the time when such portion
becomes unexercisable pursuant to Paragraph V or the Option Agreement, be
exercised by his personal representative or by any person empowered to do so
under the deceased Optionee's will or under the then applicable laws of descent
and distribution.
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof expires or becomes
unexercisable pursuant to Paragraph V or the Option Agreement, such exercisable
Option or exercisable portion thereof may be exercised in whole or in part;
provided, however, that the Company shall not be required to issue fractional
shares and the Committee may, in the Option Agreement, require any partial
exercise to be made with respect to a specified minimum number of shares.
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary of the Company of all of the
following prior to the time when such Option becomes unexercisable:
(a) notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that such Option or
portion thereof is exercised;
(b) full payment of the option price (in cash or by check, bank
draft or money order payable to the Company for the shares of Stock with respect
to which such Option or portion thereof is thereby exercised), together with
payment or arrangement for payment of any federal, state or other tax required
to be withheld by the Company with respect to such exercise;
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(c) such representations and documents as the Committee reasonable
deems necessary or advisable to effect compliance with all applicable provision
of the Securities Act of 1933, and any other federal, state, or foreign
securities laws or regulations; the Committee, in its absolute discretion, also
may take whatever additional actions it deems appropriate to effect such
compliance, including, without limitation, placing legends on share certificates
and issuing stop-transfer orders to transfer agents and registrars; and
(d) in the event that the Option or portion thereof shall be
exercised pursuant to this Paragraph BI by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option or portion thereof.
VII. Transferability of Options and Stock
No Option or interest or right therein shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means, whether such disposition by voluntary or involuntary or by
operation of law or by judgment, levy, attachment, garnishment, or any other
legal or equitable proceeding (including bankruptcy,) and any attempted
disposition thereof shall be null and void and of no effect; provided, however
that nothing in this Paragraph VII shall prevent transfers by will or by the
applicable laws of descent and distribution.
The Committee, in its absolute discretion, may impose such restrictions
on the transferability of the shares of Stock purchasable upon the exercise of
an Option as it deems appropriate, including with limitation (i) the right to
exercise a right of first refusal in the event of an offer to purchase the Stock
from the Optionee or any transferee of the Optionee, (ii) the right of the
Company to repurchase the shares of Stock from the Optionee or any transferee of
the Optionee and (iii) the right to require an escrow of the certificates
evidencing the shares of Stock. Any such restriction shall be set forth or
incorporated by reference in the respective Option Agreement and may be referred
to on the certificates evidencing such Stock.
VIII. Recapitalization, Reorganization or Change in Control
(a) The existence of the Plan and the Options granted hereunder
shall not affect in any way the right or power of the Board of Directors or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities ahead of or affecting Stock or the rights thereof,
the dissolution or liquidation of the Company or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding.
(b) The shares with respect to which Options may be granted are
shares of Stock as presently constituted, but if, and whenever, prior to the
termination of the Plan or the expiration of the Option theretofore granted, the
Company shall effect a subdivision or consolidation of shares of Stock or the
payment of a stock dividend on the Stock without receipt of consideration by the
Company, the remaining shares of Stock available under the Plan and the number
of shares of Stock with respect to which any Option may thereafter be exercised
(i) in the event of an increase in the number of outstanding shares, shall be
proportionately reduced, and (ii)in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced, and the purchase price per
share under an outstanding Option shall be proportionately increased.
(c) Except as may otherwise be expressly provided in the Plan, the
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefore, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether to not
for fair value, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Stock subject to Options
theretofore granted or the purchase price per share.
(d) If the Company effect a recapitalization or otherwise
materially changes its capital structure (both of the foregoing are herein
referred to as a "Fundamental Change"), then thereafter upon any exercise of an
Option theretofore granted the Optionee shall be entitled to purchase under such
Option, in lieu of the number of the shares of stock and securities to which the
Optionee would have been entitled pursuant to the terms of the Fundamental
Change if, immediately prior to such Fundamental Change, the Optionee had been
the holder of record of the number of shares of Stock as to which such Option is
then exercisable.
(e) If (i) the Company shall not be the surviving entity in any
merger or consolidation (or survives only as a subsidiary of another entity (,
(ii) the Company sells all or substantially all of its assets to any other
person or entity (other than a wholly-owned subsidiary), (iii) any person or
entity (including a "group" as contemplated by Section 13(d)(3) of the 1934 Act)
after the date hereof acquires or gains ownership or control of (including,
without limitation, power to vote) more than 50% of the outstanding shares of
Stock, (iv) the Company is to be dissolved and liquidated, or (v) as a result of
or in connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board (each such event in clauses (i) through (v) above is
referred to herein as a "Corporate Change"), then, effective as of a date
selected by the Committee, which date shall be (a) in the event of the
occurrence of a Corporate Change specified in clause (i), (ii) or (iv) above, no
later than a date determined by the Committee to be far enough in advance of the
date of such Corporate Change to permit each Optionee to exercise such
Optionee's Option to purchase shares of Stock and participate therewith in such
Corporate Change or (b) in the event of the occurrence of a Corporate Change
specified in clause (iii) or (v) above, no later than thirty days after such
Corporate Change, the Committee (which for purposes of the Corporate Changes
described in (iii) and (v) above shall be either the Committee as constituted
prior to the occurrence of such Corporate Change or, if no Committee had been
appointed, the Board of Directors as constituted prior to the occurrence of such
Corporate Change) acting in its sold discretion without the consent or approval
of any Optionee, shall effect one or more of the following alternative or
combination of alternatives with respect to all outstanding Options (which
alternatives may be made conditional on the occurrence of any of the Corporate
Changes specified in clause (i) through (v) above and which may vary among
Individual Optionees): (1) in the case of a Corporate Change specified in
clauses (i), (ii) or (iv), accelerate the time at which Options then outstanding
may be exercised so that such Options may be exercised in full for a limited
period of time on or before a specified date fixed by the Committee, after which
specified date all unexercised Options and all rights of Optionees thereunder
shall terminate, (2)accelerate the time at which Options than outstanding may be
exercised so that such Options may be exercised in full for their then remaining
term or (3) require the mandatory surrender to the Company of outstanding
Options held by such Optionees (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date, before or not later
than sixty days after such Corporate Change, specified by the Committee, and in
such event the Committee shall thereupon cancel such Options and the Company
shall pay to each Optionee an amount of cash equal to the excess of the fair
market value of the aggregate shares of Stock subject to such Option, determined
as of the date such Corporate Change is effective, over the aggregate option
price of such shares; provided, however, the Committee shall not select an
alternative (unless consented to by the Optionee) such that, if an Optionee
exercised his accelerated Option pursuant to alternative 1 or 2 and participated
in a transaction specified in clause (i), (ii) or (iv) or received cash pursuant
to alternative 3, the alternative would result in the Optionee's owning any
money by virtue of operation of Section 16(b) of the 1934 Act. If all such
alternatives have such a result, the Committee shall take such action, which is
hereby authorized, to put such Optionees in as close to the same position as
such Optionee would have been in had alternative 1, 2, or 3 been selected but
without resulting in any payment by such Optionee pursuant to Section 16(b) of
the 1934 Act. Notwithstanding the foregoing, (I) with consent of the Optionee,
the Committee may in lieu of the foregoing make such provision with respect to
any Corporate Change as it seems appropriate, and (II) in the event that a
Corporate Change described in clauses (i), (ii) or (iii) occurs, but such
Corporate Change does not result in any effective change in ownership or control
of the Company, the Committee shall make such adjustments in the designation and
number of unpurchased shares subject to this Plan, the number of shares subject
to Options outstanding under this Plan, the exercise price specified in Options
outstanding under the Plan, and such other terms and provisions of the Options
outstanding under this Plan as the Committee may determine to be appropriate and
equitable.
(f) Any adjustment provided for above shall be subject to any
shareholder action required by applicable Texas corporate law.
IX. Optionee Rights Limited
Nothing in this Plan or in any Option Agreement hereunder shall confer
upon any Optionee any right to continue in the employ of the Company or shall
interfere with or restrict n any way the rights of the Company, which are hereby
expressly reserved, to discharge any Optionee at any time for any reason
whatsoever, with or without just cause.
The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect to any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.
X. Term of Plan
The Plan shall be effective upon the date specified by the Board of
Directors in its adoption of the Plan. Except with respect to Options then
outstanding, if not sooner terminated under the other provisions hereof, the
Plan shall terminate upon and no further Options shall be granted after the
expiration of ten years from the date of its adoption by the Board of Directors.
The adoption of this Plan shall not affect any other compensation or incentive
plans in effect for the Company or any subsidiary. Nothing in this Plan shall be
construed to limit the right of the Company or any subsidiary to grant or assume
options otherwise then under this Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of
options in connection wit the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
form or association.
XI. Amendment or Termination of the Plan
The Board of Directors in its discretion may terminate the Plan at any
time with respect to any shares for which Options have not theretofore been
granted. The Board of Directors shall have the right to alter or amend the Plan
or any part thereof from time to time; provided, that no change in any Option
theretofore granted may be made which would impair the rights of the Optionee
without the consent of such Optionee; and provided, further, that the Board of
Directors or the Committee may not make any alterations or amendment which would
materially increase the benefits accruing to Optionees under the Plan, increase
the aggregate number of shares which may be issued pursuant to the provisions of
the Plan, change the class of employees eligible to receive Options under the
Plan to extend the term of the Plan, without the approval of the holders of a
majority of the outstanding shares of each class of capital stock of the Company
voting or acting separately as a class.
