Document:

indem_agreement.htm

 

INDEMNIFICATION AGREEMENT

This INDEMNIFICATION AGREEMENT is made and entered into as of April 7th, 2010, by and between RUBY TUESDAY, INC., a Georgia corporation (the “Corporation”), and _________________________, an officer, member of the Board of Directors or other employee or agent of
the Corporation (”Indemnitee”).

WHEREAS, Indemnitee is, or is about to become, an Authorized Representative of the Corporation, as “Authorized Representative” is defined in Section 1 hereof;

WHEREAS, competent and experienced persons are reluctant to serve as Authorized Representatives of corporations unless they are provided with adequate protection through liability insurance and corporate indemnification against risks of claims and actions against them arising out of
their service to the corporation;

WHEREAS, the Board of Directors has determined that in order to attract and retain qualified persons to serve as Authorized Representatives, it is in the best interests of the Corporation and its shareholders that the Corporation should agree to assure such person that there will be
adequate protection through insurance and indemnification against such risks;

WHEREAS, the Georgia Business Corporation Code (“GBCC”) authorizes the Corporation to indemnify directors, officers, employees and agents, to advance the reasonable expenses they incur as parties to and witnesses in threatened, pending or contemplated investigations, claims,
actions, suits or proceedings, whether civil, criminal, administrative, arbitrative or investigative, and to enter into agreements providing for such indemnification and advancement;

WHEREAS, the Bylaws of the Corporation, duly approved by its shareholders, authorize and obligate the Corporation to indemnify its directors and officers and to advance their reasonable expenses to the fullest extent permitted by law;

WHEREAS, the Corporation’s Articles of Incorporation authorize the Corporation to enter into agreements to indemnify and advance expenses to its directors and officers and to make provisions to ensure that the Corporation can honor its indemnification obligations;

WHEREAS, the Corporation desires to have Indemnitee serve and continue in the future to serve as an Authorized Representative;

WHEREAS, in consideration for and reliance on this Agreement, and on the condition that the Corporation enter into and perform its obligations under this Agreement, the Indemnitee is willing to serve and continue in the future to serve as an Authorized Representative; and

 

 

 

WHEREAS, the parties believe it appropriate to memorialize and reaffirm the Corporation's indemnification and advancement obligations to Indemnitee and, in addition, set forth the indemnification and advancement obligations contained herein;

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties agree as follows:

1.           Authorized Representative.  For the purposes of this Agreement, the term "Authorized Representative" shall mean a director or officer of the Corporation; a person serving at the request of the Corporation
as a director, officer, employee, fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other entity; and any other person whom the Corporation is authorized under the GBCC and its Articles and Bylaws to indemnify and as to whom the Board of Directors has determined that it is in the Corporation’s best interest to enter into an indemnification agreement similar to this Agreement.

2.           Indemnification.

 

	
 
	
             (a)           Indemnitee shall be indemnified and held harmless by the Corporation to the fullest extent permitted by its Articles of Incorporation and Bylaws and the GBCC, as the same exist or may hereafter be amended, against all liability, loss, judgments, fines,
and all amounts paid or to be paid in any settlement and all reasonable Expenses (as hereinafter defined) actually and reasonably incurred by Indemnitee (individually and collectively, "Liabilities") in connection with any present or future threatened, pending or contemplated investigation, claim, action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (individually and collectively, "Proceedings"), including Proceedings by or in the right of the Corporation:

                

                (i)           to which Indemnitee is or was a party or is threatened to be made a party by reason of any action or inaction in Indemnitee's capacity as an Authorized Representative, or

 

                (ii)          with respect to which Indemnitee is otherwise involved by reason of the fact that Indemnitee is or was serving as an Authorized Representative;

 

	
 
	
provided, however, that no subsequent change in the Corporation's Articles of Incorporation or Bylaws or the GBCC shall have the effect of limiting or eliminating any indemnification available under this Agreement as to any act, omission or capacity occurring or existing prior to such change.  If any change after the date of this Agreement in any applicable law, statute or rule expands the power of the
Corporation to indemnify an Authorized Representative, such change shall apply to the Indemnitee's rights and the Corporation's obligations under this Agreement.  If any change in any applicable law, statute or rule narrows the right of the Corporation to indemnify an Authorized Representative, such change shall have no effect on this Agreement or the parties' rights and obligations hereunder.  Notwithstanding the foregoing, unless the Board of Directors consents, Indemnitee 

 

 

 

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shall not be indemnified and held harmless under this Agreement with respect to (a) any Proceedings initiated by Indemnitee, except to enforce the Indemnitee’s rights to indemnification and advancement of Expenses under this Agreement or otherwise, or (b) any Proceedings pending on or before the date first above written.

 

	
 
	
             (b)           Indemnification of Expenses for Partial Success; Other Partial Indemnification.  In defending against claims for which indemnification
is prohibited under Section 2(e)(iv) and 2(e)(v) or by law and in any other circumstances where indemnification may be based upon success in the defense of a Proceeding, the Indemnitees are not required to be wholly successful in the defense of the Proceeding to be entitled to indemnification of Expenses incurred in connection therewith.  To the extent that Indemnitee is, by reason of his or her service as an Authorized Representative, a party to any Proceeding and is successful, on the merits or otherwise,
he or she shall be indemnified to the maximum extent permitted by law against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Corporation shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee
in connection with each successfully resolved claim, issue or matter.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of any Liabilities, other than Expenses, but not for the total
amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.   If any portion of the Expenses or other Liabilities as to the Indemnitee is entitled to partial indemnification cannot be readily segregated, in whole or in part, from the Expenses or Liabilities to which the Indemnitee is not entitled to indemnification, the parties shall endeavor in good faith to agree on an allocation between indemnifiable and non-indemnifiable Expenses
and Liabilities, in proportion to the number, relative size (in terms of dollar amount alleged) and risk of the claims, issues and matters involved.

 

	
 
	
              (c)           For purposes of this Agreement, the term “Expenses” is defined to include all reasonable attorney’s fees, retainers, court costs, transcript costs, fees of experts, investigators and consultants, witness fees, computer legal research costs, electronic
discovery costs, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses customarily incurred in connection with defending, investigating, participating or serving or preparing to serve as a witness in a Proceeding.  The Indemnitee understands and agrees that his or her rights to payment, reimbursement or advancement hereunder are limited to Expenses actually and reasonably incurred in connection such involvement
with a Proceeding or in enforcing his or her rights to Advances and indemnification of Liabilities with regard thereto.

   

 

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(d)           In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to preserve and facilitate
the Corporation’s assertion of such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such rights.   The Corporation’s subrogation to the Indemnitee’s rights of recovery, including his or her rights to indemnification or advancement from any other person or entity or under any policy of insurance, shall be subordinate to the Indemnitee’s rights to recover any unreimbursed or unpaid Liabilities or Expenses
therefrom.

(e)           The Corporation shall not be liable under this Agreement to make any payment in connection with any claim made against the Indemnitee:

 (i)           for which payment is actually made to the Indemnitee under a valid and collectible insurance policy, except in respect of any retention not covered, any excess beyond the amount of payment or any obligation the Corporation may have to provide indemnification under
such policy of insurance;

 (ii)           for which the Indemnitee is indemnified by the Corporation otherwise than pursuant to this Agreement;

(iii)           for which the Indemnitee has received indemnification or advancement of Expenses from any other indemnitor, including any other corporation, partnership, joint venture, trust, employee benefit plan or other entity for which the Indemnitee is serving as an Authorized
Representative at the request of the Corporation;

(iv)           for an accounting for profits made from the purchase or sale by the Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended;

 (v)           for which the Indemnitee is finally adjudged, after exhaustion of all appeals, to be liable to the Corporation or is subjected to permanent injunctive relief, after exhaustion of all appeals, in favor of the Corporation for (a)
the Indemnitee’s appropriation, in violation of his duties, of any business opportunity of the Corporation, (b) acts or omissions that involve intentional misconduct or a knowing violation of law, (c) unlawful distributions pursuant to Section 14-2-832 of the GBCC, or (d) any transaction from which Indemnitee received an improper personal benefit;

(vi)           for any settlement to which the Corporation has not given its prior written consent or approval, which consent or approval shall not be unreasonably withheld or delayed.

 

 

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3.            Advances for Expenses.  The Corporation agrees to pay Expenses incurred by Indemnitee in connection with any Proceedings in advance of the final disposition thereof (“Advances”),
provided that the Corporation has received an affirmation that his or her conduct does not constitute behavior of the kind described in Sections 14-2-856(b) and 14-2-857(a)(2) of the GBCC or in Section 2(e)(v) of this Agreement, and undertaking from or on behalf of Indemnitee, substantially in the form attached hereto as Annex I, to repay the amount so advanced to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation under this Agreement or otherwise.  The
undertaking must be an unlimited general obligation of the Indemnitee, but need not be secured, does not bear interest and shall be accepted without reference to the financial ability of the Indemnity to make repayment.

4.            Procedure for Making Demand and the Corporation’s Response.

	
 
	
                (a)           Any request for payment of Indemnifiable Liabilities and Advances shall be made in writing and submitted to the Corporation at the address specified in Section 10 hereof, and shall include an affirmation and undertaking for Advances, if applicable, a
description (based upon information then known to Indemnitee) of the Proceeding, and copies of any demand, summons, complaint, order, notice of charges, indictment, information, subpoena or other process served on or received by the Indemnitee.  In the case of Expenses and Advances, the Indemnitee shall accompany his or her request with copies of invoices or receipts providing sufficient information for the Corporation to determine whether they are reasonable.  In the case of a proposed settlement
for which the Indemnitee seeks the Corporation’s consent or approval, the Indemnitee shall provide such information as shall be needed for the Corporation to determine whether the settlement is reasonable.

	
 
	
                (b)           The Corporation shall pay the Indemnifiable Liabilities and Advances due to the Indemnitee, under this Agreement or otherwise, no later than forty-five (45) days after receipt of the written request from Indemnitee under Subsection 4(a).

    

	
 
	
                (c)           The Corporation acknowledges that indemnification of Indemnifiable Liabilities and payment of Advances to Indemnitee have been pre-authorized by the Corporation as permitted by Sections 14-2-856, 14-2-857 and 14-2-859 of the GBCC, and that pursuant to
authority exercised under these provisions, no determination need be made by the Corporation for a specific proceeding that such indemnification or advance of Expenses to the Indemnitee is permissible in the circumstances because he or she has met a particular standard of conduct.  It is, further, the intent of this Agreement (i) that the Indemnitee shall be entitled to receive, and the Corporation obligated to pay, Advances of reasonable Expenses upon the Indemnitee’s submission of the Affirmation
and Undertaking, without more, and (ii) that the Indemnitee, upon compliance with his or her obligations under this Agreement, shall be entitled to indemnification and the Corporation shall be obligated to indemnify the Indemnitee except when and to the extent he or she is finally adjudicated, after exhaustion of all appeals, to be liable to the Corporation or subject to injunctive 

        

 

 

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relief in favor of the Corporation for the conduct described in Section 2(e)(v) of this Agreement, or Sections 14-2-856(b) or 14-2-857(a)(2) of the GBCC or other provisions of Section 2(e) apply.  The Corporation’s evaluation as to (a) reasonableness of Expenses and Advances of Indemnitee, (b) the reasonableness of
a proposed settlement, and (c) any other decision that the Corporation makes regarding the Indemnitee’s indemnification, shall be made, within said 45-day period:

                 (i)   If there are two or more disinterested directors, by the Board of Directors of the Corporation by a majority vote of all disinterested directors (a majority of
whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote;

 

                 (ii)   If there are fewer than two disinterested directors, by special
independent counsel selected by the Board of Directors (in which selection directors who do not qualify as disinterested directors may participate); or

 

(iii)           By the shareholders, but shares owned by or voted under the control of a director or officer who at the time does not qualify as a disinterested director or disinterested officer may not be voted on the determination.

A director is “disinterested” for purposes of this Agreement if he or she is not a party to the Proceeding at the time the vote is taken and does not have a familial, financial, professional or employment relationship with the Indemnitee or any other party to the Proceeding which would in the circumstances be reasonably expected
to exert an influence on the director’s vote.

(d)           If a determination of entitlement to indemnification is to be made by independent counsel, the Corporation shall give written notice to Indemnitee advising Indemnitee of the identity of the independent counsel so selected.  The Corporation shall pay any and
all reasonable fees and expenses of independent counsel incurred by such independent counsel in connection with acting pursuant to this Agreement.  Upon the commencement of any contest challenging a determination made by the independent legal counsel, the independent counsel shall be discharged and relieved of any further responsibility in such capacity, subject to the applicable standards of professional conduct then prevailing.

(e)           In making any determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement.  Anyone seeking to overcome this
presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.  It is the parties' intention that if the Corporation contests Indemnitee's right to indemnification, the question of Indemnitee's right to indemnification shall be for the court to decide, and neither the failure of the Corporation (including by its directors or independent legal counsel) to have made a determination, prior to 

 

 

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the commencement of any action pursuant to this Agreement, that the Indemnitee is entitled to indemnification as requested, nor an actual determination by the Corporation (including by its directors or independent legal counsel) that Indemnitee is not entitled to indemnification, shall be a defense to the action, shall be binding
on the Indemnitee, shall be entitled to any deference by the court, or shall create any presumption regarding the Indemnitee’s entitlement to indemnification.  Indemnitee in an action brought in accordance with the terms of Section 5 hereof may freely contest any determination that he or she is not entitled to indemnification.

5.           Failure to Indemnify; Enforcement of Agreement by Indemnitee.

(a)           If a claim for indemnification or Advances under this Agreement, or any statute, or under any provision of the Corporation's Articles of Incorporation or its Bylaws providing for indemnification, is not paid in full by the Corporation within forty-five (45) days after
a written request for payment thereof has been received by the Corporation, Indemnitee may, but is not required to, at any time thereafter bring an action against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, Indemnitee also shall be entitled, to the extent of such success, to be paid for the reasonable Expenses  of bringing and maintaining such action.

(b)           It shall be a defense to any such action (other than an action brought to enforce a claim for Advance of Expenses) that Indemnitee has been finally adjudicated, after exhaustion of all appeals, to be liable to the Corporation or subject to injunctive relief in favor
of the Corporation for the conduct described in Section 2(e)(v) of this Agreement, or Sections 14-2-856(b) or 14-2-857(a)(2) of the GBCC or other provisions of Section 2(e) apply, or that indemnification is otherwise prohibited by law, but the burden of proving such defense or any other defense to the action shall be on the Corporation, and any such defenses shall be subject to the provisions of Section 2(b).

(c)           If the Corporation contests the Indemnitee’s right to receive Advance of Expenses, the Indemnitee shall in any event be entitled to receive interim payments of interim expenses pursuant to Section 3 hereof unless and until such defense may be finally adjudicated
by court order or judgment from which no further right of appeal exists.

 

                (d)           If the Corporation contests the reasonableness of the full amount of the Expenses that the Indemnitee has requested, the appropriateness of certain of the Expenses requested or any other aspect of the Indemnitee’s entitlement to Expenses, the Corporation shall
pay, within 45 days of the request, any portion of the Expenses that it does not contest.

               

                6.           Indemnification for Expenses of Witnesses.  Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of his or her service as an Authorized Representative,
a witness in any Proceedings to which Indemnitee is not a party, the Indemnitee shall be indemnified against all Expenses 

 

 

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actually and reasonably incurred by the Indemnitee or on his or her behalf in connection therewith and shall be entitled to Advance of Expenses under Section 3 and enforcement of his or her rights under Sections 4 and 5 hereof upon compliance with the requirements of those Sections and Section 7 hereof.

7.           Indemnitee's Obligations.  The Indemnitee shall promptly advise the Corporation in writing of the institution of any investigation, claim, action, suit or proceeding which is or may be subject to
this Agreement and keep the Corporation generally informed of, and consult with the Corporation with respect to, the status of any such investigation, claim, action, suit or proceeding.  In addition, Indemnitee shall give the Corporation such information and cooperation as it may reasonably require and as shall be within Indemnitee's power.   The failure by Indemnitee to timely notify the Corporation of any indemnifiable claim or indemnifiable loss shall not relieve the Corporation from
any liability hereunder unless, and only to the extent that, the Corporation did not otherwise learn of such indemnifiable claim or indemnifiable loss and such failure results in forfeiture by the Corporation of substantial defenses, rights or insurance coverage.

8.           Insurance.  If, at the time of the receipt of such request, the Corporation has directors’ and officers’ liability insurance in effect under which coverage for the Indemnitee’s
Liabilities is potentially available, the Corporation shall give prompt written notice of such Proceeding to the applicable insurers in accordance with the procedures set forth in the applicable policies.  The Corporation shall provide to Indemnitee a copy of each of the policies and such notice given to the insurers and, upon Indemnitee's request, copies of all subsequent correspondence between the Corporation and such insurers regarding the Proceeding, promptly after the Corporation’s receipt
or delivery thereof.

9.           Security.  In the event of and prior to a Business Combination, as defined in Article X of the Corporation’s Articles of Incorporation, if requested by Indemnitee and approved by the Board
of Directors of the Corporation, the Corporation shall provide, if available from third party financial institutions, security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.  In the event of such a Business Combination, the Corporation shall also purchase and maintain,
if available, a policy of director and officer liability insurance for the benefit of the Indemnitee providing coverage for Liabilities and Expenses as to claims based on acts or omissions (or alleged acts or omissions) of the Indemnitee occurring before the effective date of the Business Combination, with limits no less than the greater of the highest limits of the policies of director and officer liability insurance maintained by the Corporation in any of the three years prior to the effective date of the Business
Combination or the limits of the policies of director and officer liability insurance maintained by the Corporation, its successor or parent, after the effective date of the Business Combination.

 

 

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10.           Contribution.

 

             (a)           To the fullest extent permitted by law, whether
or not the indemnification provided in Sections 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution
or indemnification it may have against Indemnitee.  The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

             (b)   Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph,
if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall, to the fullest extent permitted by law, contribute to, and shall pay to or for Indemnitee in contribution,  the amount of the expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by and the relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transactions and events from which such action, suit or proceeding arose, as well as any other
equitable considerations which the Law may require to be considered.  The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which
their liability is primary or secondary and the degree to which their conduct was active or passive.

              

              (c)   The Company hereby agrees to fully indemnify and hold Indemnitee harmless, to the fullest extent permitted by law, from any claims of contribution which may be brought
by officers, directors, agents or employees of the Company, other than Indemnitee, and third parties who may be jointly liable with Indemnitee.

 

              (d)   To the fullest extent permitted by law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company,
in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties,

 

 

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excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company
and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding, and (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

(e)           The Company and the Indemnity agree that it would not be just and equitable if contribution pursuant to this Agreement were determined by pro rata or per capita allocation or by any other method of allocation which does not take into account the equitable considerations
referred to in this Section 10.

11.           Notices.   All notices given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party to be notified,
(b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All notices to the Corporation under this Agreement shall be directed
to:

Ruby Tuesday, Inc.

150 West Church Avenue

Maryville, Tennessee 37801

Attention: Secretary

 

Notices to Indemnitee shall be sent as follows:

________________________

________________________

________________________

________________________

or to such other address as the Indemnitee shall designate in writing to the Corporation.

12.           Severability.  Should any provisions of this Agreement, or any clause hereof, be held to be invalid, illegal or unenforceable, in whole or in part, the remaining provisions and clauses of this
Agreement shall remain fully enforceable and binding on the parties.

13.           Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

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14.           Choice of Law; Interpretation.  The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Georgia. The provisions of this agreement
shall be broadly interpreted to afford indemnification and advancement of the Indemnitee to the fullest extent permitted by the GBCC and Georgia law.  To that end, in addition to the definitions and usages contained in this Agreement, the terms used in this agreement include and incorporate the meanings set forth in Section 14-2-850 of the GBCC.

15.           Change in Indemnitee’s Position.  This Agreement shall continue in full force and effect, and a new agreement between the parties hereto need not be executed and delivered,

(a)           if Indemnitee is an officer or member of the Board of Directors of the Corporation as of the date of this Agreement, as long as Indemnitee continues to serve as an officer or member of the Board of Directors of the Corporation, notwithstanding any change in the position(s)
shown below as held by the Indemnitee with the Corporation; or

(b)           if Indemnitee is neither an officer nor a director of the Corporation, as long as Indemnitee continues to serve in the position shown below or, if more than one position is shown below, in at least one of the positions shown below.

16.           Duration of Agreement.  All agreements and obligations of the Corporation contained herein shall continue during the period that Indemnitee is serving as an Authorized Representative of the
Corporation and for six years following the end of such period and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding by reason of his or her service as an Authorized Representative, whether or not he or she is acting or serving in any such capacity at the time any Liability or Expense is incurred for which indemnification can be provided under this Agreement or until final disposition, including all appeals, of any action commenced under Section 5 hereof.

 

17.           Successors.  This Agreement establishes contract rights which shall be binding upon, and shall inure to the benefit of, the successors, assigns, spouses, heirs, executors and legal representatives
of the parties hereto and shall be binding upon and enforceable as to any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Corporation.

18.           Contract Rights Not Exclusive.  The contract rights conferred by this Agreement shall be in addition to, but not exclusive of, any other right which Indemnitee may have or may hereafter acquire
under any statute, provision of the Corporation's Articles of Incorporation or Bylaws, agreement, vote of shareholders or disinterested directors, or otherwise.  Nothing in this Agreement shall be deemed to modify or amend the indemnification provisions of the Corporation’s Bylaws.

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.

 

 

	INDEMNITEE:	RUBY TUESDAY, INC.
	 	 
	 	 
	
By:                                                             
	
By:                                                               

	 	 
	  	  
	
Name:                                                      
 
	
Name:                                                     

	 	 
	  	  
	
Position(s) Held With The Corporation:
	
Title:                                                         

	                                                                     	                                                                    
	                                                                    	                                                                  

  

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ANNEX I

AFFIRMATION AND UNDERTAKING

This Undertaking is made on April 7th, 2010, pursuant to the Indemnification Agreement between RUBY TUESDAY, INC., a Georgia corporation (the Corporation”), and _____________________, an officer, member of the Board of Directors or other employee or agent of the Corporation
(”Indemnitee”),

WHEREAS, Indemnitee has become involved in investigations, claims, actions, suits or proceedings (the “Proceedings”) which have arisen as a result of Indemnitee's service to the Corporation or at the Corporation’s request; and

WHEREAS, Indemnitee believes in good faith that Indemnitee is entitled to indemnification from the Corporation; and

WHEREAS, Indemnitee desires that the Corporation pay any and all expenses (including, but not limited to, attorneys' fees and court costs) actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in defending or investigating any such Proceedings and that such payment be made
in advance of the final disposition of such Proceedings to the extent that Indemnitee has not been previously reimbursed by insurance or indemnification; and

WHEREAS, the Corporation is willing to make such payments, but in accordance with Article XII, Section 12.3 of the Bylaws of the Corporation and Sections 14-2-856(c) and 14-2-857(a) of the Georgia Business Corporation Code, the Corporation may make such payments only if it receives from Indemnitee
an affirmation with respect to the Indemnitee’s conduct and an undertaking to repay if the Indemnitee is not entitled to indemnification; and

WHEREAS, Indemnitee is willing to give such an affirmation and undertaking.

NOW, THEREFORE, Indemnitee :

1.           Indemnitee hereby affirms that he or she believes in good faith that his or her conduct does not constitute behavior of the kind described in Sections 14-2-856(b) and 14-2-857(a)(2) of the Georgia Business Corporation Code.

2.           In regard to any payments made by the Corporation to Indemnitee pursuant to the terms of the Indemnification Agreement dated April 7th, 2010, between the Corporation and Indemnitee, Indemnitee hereby undertakes and agrees
to repay to the Corporation any and all such amounts, if and to the extent that it is determined that Indemnitee is not entitled to be indemnified by the Corporation.

 

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3.           The Indemnitee shall make any repayment due to the Corporation promptly, and in any event within thirty (30) days, after (i) the disposition, including any appeals, of the Proceedings on account of which payments were made
and (ii) notification of the determination by the Corporation that he or she is not entitled to indemnification; provided, however, that if either the Corporation or the Indemnitee files suit seeking a judicial determination of the Indemnitee’s rights to indemnification, any obligation the Indemnitee may have to repay advancements shall be tolled until such suit is finally adjudicated, including all appeals.

INDEMNITEE:

 

By:                                                                                                                            

Name:                                                            

Position(s) Held With The Corporation:

 

                                                                      

14ex101.htm

 

 

EXHIBIT 10.1

 

FREEDOM ENVIRONMENTAL INVESTMENT GROUP CORP

AMENDED 2009 STOCK OPTION PLAN

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1. Purpose.  The purpose of this Plan is to advance the interests of Freedom Environmental Investment Group Corp. (the “Company”), by providing an additional incentive to attract, retain and motivate highly qualified and competent persons who are key to the Company, including key employees, consultants, independent contractors, Officers and Directors, and upon whose efforts and judgment the success of the Company and its Subsidiaries is largely dependent, by authorizing the grant of options to purchase Common Stock of the Company and other related benefits to persons who are eligible to participate hereunder, thereby encouraging stock ownership in the Company by such persons, all upon and subject to the terms and conditions of this Plan.

2. Definitions.  As used herein, the following terms shall have the meanings indicated:

(a) “Board” shall mean the Board of Directors of the Company.

(b) “Cause” shall mean any of the following:

(i) a determination by the Company that there has been a willful, reckless or grossly negligent failure by the Optionee to perform his or her duties as an employee of the Company;

(ii) a determination by the Company that there has been a willful breach by the Optionee of any of the material terms or provisions of any employment agreement between such Optionee and the Company;

(iii) any conduct by the Optionee that either results in his or her conviction of a felony under the laws of the United States of America or any state thereof, or of an equivalent crime under the laws of any other jurisdiction;

(iv) a determination by the Company that the Optionee has committed an act or acts involving fraud, embezzlement, misappropriation, theft, breach of fiduciary duty or material dishonesty against the Company, its properties or personnel;

(v) any act by the Optionee that the Company determines to be in willful or wanton disregard of the Company’s best interests, or which results, or is intended to result, directly or indirectly, in improper gain or personal enrichment of the Optionee at the expense of the Company;

(vi) a determination by the Company that there has been a willful, reckless or grossly negligent failure by the Optionee to comply with any rules, regulations, policies or procedures of the Company, or that the Optionee has engaged in any act, behavior or conduct demonstrating a deliberate and material violation or disregard of standards of behavior that the Company has a right to expect of its employees; or

 

  

  

  

 

 

(vii) if the Optionee, while employed by the Company and for two years thereafter, violates a confidentiality and/or noncompete agreement with the Company, or fails to safeguard, divulges, communicates, uses to the detriment of the Company or for the benefit of any person or persons, or misuses in any way, any Confidential Information; provided, however, that, if the Optionee has entered into a written employment agreement with the Company which remains effective and which expressly provides for a termination of such Optionee’s employment for “cause,” the term “Cause” as used herein shall have the meaning as set forth in the Optionee’s employment agreement in lieu of the definition of “Cause” set forth in this Section 2(b).

(c) “Change of Control” shall mean the acquisition by any person or group (as that term is defined in the Exchange Act, and the rules promulgated pursuant to that act) in a single transaction or a series of transactions of thirty percent (30%) or more in voting power of the outstanding stock of the Company and a change of the composition of the Board of Directors so that, within two years after the acquisition took place, a majority of the members of the Board of Directors of the Company, or of any corporation with which the Company may be consolidated or merged, are persons who were not directors or officers of the Company or one of its Subsidiaries immediately prior to the acquisition, or to the first of a series of transactions which resulted in the acquisition of thirty percent (30%) or more in voting power of the outstanding stock of the Company.

(d) “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

 

(e) “Committee” shall mean the stock option committee appointed by the Board or, if not appointed, the Board.

(f) “Common Stock” shall mean the Company’s Common Stock, par value $.001 per share.

(g) “Director” shall mean a member of the Board.

(h) “Employee” shall mean any person, including officers, directors, consultants and independent contractors employed by the Company or any parent or Subsidiary of the Company within the meaning of Section 3401(c) of the regulators promulgated thereunder.

(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(j) “Fair Market Value” of a Share on any date of reference shall be the Closing Price of a share of Common Stock on the business day immediately preceding such date, unless the Committee in its sole discretion shall determine otherwise in a fair and uniform manner.  For this purpose, the “Closing Price” of the Common Stock on any business day shall be (i) if the Common Stock is listed or admitted for trading on any United States national securities exchange, or if actual transactions are otherwise reported on a consolidated transaction reporting system, the last reported sale price of the Common Stock on such exchange or reporting system, as reported in any newspaper of general circulation, (ii) if the Common Stock is quoted on The Nasdaq Stock Market (“Nasdaq”), or any similar system of automated dissemination of quotations of securities prices in common use, the mean between the closing high bid and low asked quotations for such day of the Common Stock on such system, or (iii) if neither clause (i) nor (ii) is applicable, the mean between the high bid and low asked quotations for the Common Stock as reported by the National Quotation Bureau, Incorporated if at least two securities dealers have inserted both bid and asked quotations for the Common Stock on at least five of the 10 preceding days.  If the information set forth in clauses (i) through (iii) above is unavailable or inapplicable to the Company (e.g., if the Company’s Common Stock is not then publicly traded or quoted), then the “Fair Market Value” of a Share shall be the fair market value (i.e., the price at which a willing seller would sell a Share to a willing buyer when neither is acting under compulsion and when both have reasonable knowledge of all relevant facts) of a share of the Common Stock on the business day immediately preceding such date as the Committee in its sole and absolute discretion shall determine in a fair and uniform manner.

  

  

  

 

 

(k) “Incentive Stock Option” shall mean an incentive stock option as defined in Section 422 of the Code.

(l) “Non-Statutory Stock Option” or “Nonqualified Stock Option” shall mean an Option which is not an Incentive Stock Option.

(m) “Officer” shall mean the Company’s chairman, president, principal financial officer, principal accounting officer (or, if there is no such accounting officer, the controller), any vice-president of the Company in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company.  Officers of Subsidiaries shall be deemed Officers of the Company if they perform such policy-making functions for the Company.  As used in this paragraph, the phrase “policy-making function” does not include policy-making functions that are not significant.  Unless specified otherwise in a resolution by the Board, an “executive officer” pursuant to Item 401(b) of Regulation S-K (17 C.F.R. § 229.401(b)) shall be only such person designated as an “Officer” pursuant to the foregoing provisions of this paragraph.

(n) “Option” (when capitalized) shall mean any stock option granted under this Plan.

(o) “Optionee” shall mean a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan by reason of the death of such person.

(p) “Plan” shall mean this Amended 2009 Stock Option Plan of the Company, which Plan shall be effective upon approval by the Board, subject to approval, within 12 months of the date thereof by holders of a majority of the Company’s issued and outstanding Common Stock of the Company.

(q) “Share” or “Shares” shall mean a share or shares, as the case may be, of the Common Stock, as adjusted in accordance with Section 10 of this Plan.

(r) “Subsidiary” shall mean any corporation (other than the Company) in any unbroken chain of corporations beginning with the Company if, at the time of the granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

3. Shares and Options.  Subject to adjustment in accordance with Section 10 hereof, the Company may issue up to six million (6,000,000) Shares from Shares held in the Company’s treasury or from authorized and unissued Shares through the exercise of Options issued pursuant to the provisions of this Plan.  If any Option granted under this Plan shall terminate, expire, or be canceled, forfeited or surrendered as to any Shares, the Shares relating to such lapsed Option shall be available for issuance pursuant to new Options subsequently granted under this Plan.  Upon the grant of any Option hereunder, the authorized and unissued Shares to which such Option relates shall be reserved for issuance to permit exercise under this Plan.  Subject to the provisions of Section 14 hereof, an Option granted hereunder shall be either an Incentive Stock Option or a Non-Statutory Stock Option as determined by the Committee at the time of grant of such Option and shall clearly state whether it is an Incentive Stock Option or Non-Statutory Stock Option.  All Incentive Stock Options shall be granted within 10 years from the effective date of this Plan.

  

  

  

 

 

4. Limitations.  Options otherwise qualifying as Incentive Stock Options hereunder will not be treated as Incentive Stock Options to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the Shares, with respect to which Options meeting the requirements of Code Sec­tion 422(b) are exercisable for the first time by any individual during any calendar year (under all stock option or similar plans of the Company and any Subsidiary), exceeds $100,000.

5. Conditions for Grant of Options.

(a) Each Option shall be evidenced by an option agreement that may contain any term deemed necessary or desirable by the Committee, provided such terms are not inconsistent with this Plan or any applicable law.  Optionees shall be those persons selected by the Committee from the class of all regular Employees of the Company or its Subsidiaries, including Employee Directors and Officers who are regular or former regular employees of the Company, Directors who are not regular employees of the Company, as well as consultants to the Company.  Any person who files with the Committee, in a form satisfactory to the Committee, a written waiver of eligibility to receive any Option under this Plan shall not be eligible to receive any Option under this Plan for the duration of such waiver.

(b) In granting Options, the Committee shall take into consideration the contribution the person has made, or is expected to make, to the success of the Company or its Subsidiaries and such other factors as the Committee shall determine.  The Committee shall also have the authority to consult with and receive recommendations from Officers and other personnel of the Company and its Subsidiaries with regard to these matters.  The Committee may from time to time in granting Options under this Plan prescribe such terms and conditions concerning such Options as it deems appropriate, provided that such terms and conditions are not more favorable to an Optionee than those expressly permitted herein; provided further, however, that to the extent not cancelled pursuant to Section 9(b) hereof, upon a Change in Control, any Options that have not yet vested, may, in the sole discretion of the Committee, vest upon such Change in Control.

(c) The Options granted to employees under this Plan shall be in addition to regular salaries, pension, life insurance or other benefits related to their employment with the Company or its Subsidiaries.  Neither this Plan nor any Option granted under this Plan shall confer upon any person any right to employment or continuance of employment (or related salary and benefits) by the Company or its Subsidiaries.

6. Exercise Price.  The exercise price per Share of any Option shall be any price determined by the Committee but in no event shall the exercise price per Share of any Option be less than the Fair Market Value of the Shares underlying such Option on the date such Option is granted and, in the case of an Incentive Stock Option granted to a 10% stockholder, the per Share exercise price will not be less than 110% of the Fair Market Value.  Re-granted Options, or Options which are canceled and then re-granted covering such canceled Options, will, for purposes of this Section 6, be deemed to have been granted on the date of the re-granting.

 

 

  

  

  

 

 

7. Exercise of Options.

(a) An Option shall be deemed exercised when (i) the Company has received written notice of such exercise in accordance with the terms of the Option, (ii) full payment of the aggregate option price of the Shares as to which the Option is exercised has been made, (iii) the Optionee has agreed to be bound by the terms, provisions and conditions of any applicable stockholders’ agree­ment, and (iv) arrangements that are satisfactory to the Committee in its sole discretion have been made for the Optionee’s payment to the Company of the amount that is necessary for the Company or the Subsidiary employing the Optionee to withhold in accordance with applicable Federal or state tax withholding requirements.  Unless further limited by the Committee in any Option, the exercise price of any Shares purchased pursuant to the exercise of such Option shall be paid in cash, by certified or official bank check, by money order, with Shares or by a combination of the above; provided, however, that the Committee in its sole discretion may accept a personal check in full or partial payment of any Shares.  The Company in its sole discretion may, on an individual basis or pursuant to a general program established by the Committee in connection with this Plan, lend money to an Optionee to exercise all or a portion of the Option granted hereunder.  If the exercise price is paid in whole or part with the Optionee’s promissory note, such note shall (i) provide for full recourse to the maker, (ii) be collateralized by the pledge of the Shares that the Optionee purchases upon exercise of such Option, (iii) bear interest at a rate no less than the rate of interest payable by the Company to its principal lender, and (iv) contain such other terms as the Committee in its sole discretion shall require.

(b) No Optionee shall be deemed to be a holder of any Shares subject to an Option unless and until a stock certificate or certificates for such Shares are issued to such person(s) under the terms of this Plan.  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 expressly provided in Section 10 hereof.

(c) Any Option may, in the discretion of the Committee, be exercised pursuant to a “cashless” or “net issue” exercise.  In lieu of exercising the Option as specified in subsection (a) above, the Optionee may pay in whole or in part with Shares, the number of which shall be determined by dividing (a) the aggregate Fair Value of such Shares otherwise issuable upon exercise of the Option minus the aggregate Exercise Price of such Option by (b) the Fair Value of one such Share, or the Optionee may pay in whole or in part through a reduction in the number of Shares received through the exercise of the Option equal to the quotient of the (a) aggregate Fair Value of all the Shares issuable upon exercise of the Option minus the aggregate Exercise Price of such Option (b) divided by the Fair Value of one such share.  If the exercise price is paid in whole or in part with Shares, the value of the Shares surrendered shall be their Fair Market Value on the date the Option is exercised.

8. Exercisability of Options.  Any Option shall become exercisable in such amounts, at such intervals, upon such events or occurrences and upon such other terms and conditions as shall be provided in an individual Option agreement evidencing such Option, except as otherwise provided in Section 5(b) or this Section 8.

(a) The expiration date(s) of an Option shall be determined by the Committee at the time of grant, but in no event shall an Option be exercisable after the expiration of 10 years from the date of grant of the Option.

(b) Unless otherwise expressly provided in any Option as approved by the Committee, notwithstanding the exercise schedule set forth in any Option, each outstanding Option, may, in the sole discretion of the Committee, become fully exercisable upon the date of the occurrence of any Change of Control, but, unless otherwise expressly provided in any Option, no earlier than six months after the date of grant, and if and only if Optionee is in the employ of the Company on such date.

(c) The Committee may in its sole discretion accelerate the date on which any Option may be exercised and may accelerate the vesting of any Shares subject to any Option or previously acquired by the exercise of any Option.

  

  

  

 

 

9. Termination of Option Period.

(a) Unless otherwise expressly provided in any Option, the unexercised portion of any Option shall automatically and without notice immediately terminate and become forfeited, null and void at the time of the earliest to occur of the following:

(i) three months after the date on which the Optionee’s employment is terminated for any reason other than by reason of (A) Cause, (B) the termination of the Optionee’s employment with the Company by such Optionee following less than 60 days’ prior written notice to the Company of such termination (an “Improper Termination”), (C) a mental or physical disability (within the meaning of Section 22(e) of the Code) as determined by a medical doctor satisfactory to the Committee, or (D) death;

(ii) immediately upon (A) the termination by the Company of the Optionee’s employment for Cause, or (B) an Improper Termination;

(iii) one year after the date on which the Optionee’s employment is terminated by reason of a mental or physical disability (within the meaning of Code Section 22(e)) as determined by a medical doctor satisfactory to the Committee or the later of three months after the date on which the Optionee shall die if such death shall occur during the one-year period specified herein; or

(iv) the later of (a) one year after the date of termination of the Optionee’s employment by reason of death of the employee, or (b) three months after the date on which the Optionee shall die if such death shall occur during the one year period specified in Subsection 9(a)(iii) hereof.

(b) The Committee in its sole discretion may, by giving written notice (“cancellation notice”), cancel effective upon the date of the consummation of any corporate transaction described in Sub­sec­tion 10(d) hereof, any Option that remains unexercised on such date.  Such cancellation notice shall be given a reasonable period of time prior to the proposed date of such cancellation and may be given either before or after approval of such corporate transaction.

(c) Upon termination of Optionee’s employment as described in this Section 9, or otherwise, any Option (or portion thereof) not previously vested or not yet exercisable pursuant to Section 8 of this Plan or the vesting schedule set forth in such Option shall be immediately canceled.

 

10. Adjustment of Shares.

(a) If at any time while this Plan is in effect or unexercised Options are outstanding, there shall be any increase or decrease in the number of issued and outstanding Shares through the declaration of a stock dividend or through any recapitalization resulting in a stock split, combination or exchange of Shares (other than any such exchange or issuance of Shares through which Shares are issued to effect an acquisition of another business or entity or the Company’s purchase of Shares to exercise a “call” purchase option), then and in such event:

(i) appropriate adjustment shall be made in the maximum number of Shares available for grant under this Plan, so that the same percentage of the Company’s issued and outstanding Shares shall continue to be subject to being so optioned;

(ii) appropriate adjustment shall be made in the number of Shares and the exercise price per Share thereof then subject to any outstanding Option, so that the same percentage of the Company’s issued and outstanding Shares shall remain subject to purchase at the same aggregate exercise price; and

(iii) such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.

(b) Subject to the specific terms of any Option, the Committee may change the terms of Options outstanding under this Plan, with respect to the option price or the number of Shares subject to the Options, or both, when, in the Committee’s sole discretion, such adjustments become appropriate by reason of a corporate transaction described in Subsection 10(d) hereof, or otherwise.

 

  

  

  

 

 

(c) Except as otherwise expressly provided herein, the issuance by the Company of shares of its capital stock of any class, or securities convertible into or exchangeable for shares of its capital stock of any class, either in connection with a direct or underwritten sale, or upon the exercise of rights or warrants to subscribe therefor or purchase such Shares, or upon conversion of obligations of the Company into such Shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of or exercise price of Shares then subject to outstanding Options granted under this Plan.

(d) Without limiting the generality of the foregoing, the existence of outstanding Options granted under this Plan shall not affect in any manner the right or power of the Company to make, authorize or consummate (i) any or all adjustments, reclassifications, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; (ii) any merger or consolidation of the Company or to which the Company is a party; (iii) any issuance by the Company of debt securities, or preferred or preference stock that would rank senior to or above the Shares subject to outstanding Options; (iv) any purchase or issuance by the Company of Shares or other classes of common stock or common equity securities; (v) the dissolution or liquidation of the Company; (vi) any sale, transfer, encumbrance, pledge or assignment of all or any part of the assets or business of the Company; or (vii) any other corporate act or proceeding, whether of a similar character or otherwise.

(e) The Optionee shall receive written notice within a reasonable time prior to the consummation of such action advising the Optionee of any of the foregoing.  The Committee may, in the exercise of its sole discretion, in such instances declare that any Option shall terminate as of a date fixed by the Board and give each Optionee the right to exercise his or her Option.

11. Transferability.  No Option or stock appreciation right granted hereunder shall be sold, pledged, assigned, hypothecated, disposed or otherwise transferred by the Optionee other than by will or the laws of descent and distribution, unless otherwise authorized by the Board, and no Option or stock appreciation right shall be exercisable during the Optionee’s lifetime by any person other than the Optionee.

12. Issuance of Shares.  As a condition of any sale or issuance of Shares upon exercise of any Option, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary or advisable to assure compliance with any such law or regulation including, but not limited to, the following:

(i) a representation and warranty by the Optionee to the Company, at the time any Option is exercised, that he is acquiring the Shares to be issued to him for investment and not with a view to, or for sale in connection with, the distribution of any such Shares; and

(ii) an agreement and undertaking to comply with all of the terms, restrictions and provisions set forth in any then applicable stockholders’ agreement relating to the Shares, including, without limitation, any restrictions on transferability, any rights of first refusal and any option of the Company to “call” or purchase such Shares under then applicable agreements, and

(iii) any restrictive legend or legends, to be embossed or imprinted on Share certificates, that are, in the discretion of the Committee, necessary or appropriate to comply with the provisions of any securities law or other restriction applicable to the issuance of the Shares.

13. Stock Appreciation Rights.  The Committee may grant stock appreciation rights to Employees, either or tandem with Options that have been or are granted under the Plan or with respect to a number of Shares on which an Option is not granted.  A stock appreciation right shall entitle the holder to receive, with respect to each Share as to which the right is exercised, payment in an amount equal to the excess of the Share’s Fair Market Value on the date the right is exercised over its Fair Market Value on the date the right was granted.  Such payment may be made in cash or in Shares valued at the Fair Market Value as of the date of surrender, or partly in cash and partly in Shares, as determined by the Committee in its sole discretion.  The Committee may establish a maximum appreciation value payable for stock appreciation rights.

14. Restricted Stock Awards.   The Committee may grant restricted stock awards under the Plan in Shares or denominated in units of Shares.  The Committee, in its sole discretion, may make such awards subject to conditions and restrictions, as set forth in the instrument evidencing the award, which may be based on continuous service with the Company or the attainment of certain performance goals related to profits, profit growth, cash-flow or shareholder returns, where such goals may be stated in absolute terms or relative to comparison companies or indices to be achieved during a period of time.

 

  

  

  

 

 

15. Administration of this Plan.

(a) This Plan shall be administered by the Committee, which shall consist of not less than two Directors.  The Committee shall have all of the powers of the Board with respect to this Plan.  Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board and any vacancy occurring in the membership of the Committee may be filled by appointment by the Board.

(b) Subject to the provisions of this Plan, the Committee shall have the authority, in its sole discretion, to:  (i) grant Options, (ii) determine the exercise price per Share at which Options may be exercised, (iii) determine the Optionees to whom, and time or times at which, Options shall be granted, (iv) determine the number of Shares to be represented by each Option, (v) determine the terms, conditions and provisions of each Option granted (which need not be identical) and, with the consent of the holder thereof, modify or amend each Option, (vi) defer (with the consent of the Optionee) or accelerate the exercise date of any Option, and (vii) make all other determinations deemed necessary or advisable for the administration of this Plan, including re-pricing, canceling and regranting Options.

(c) The Committee, from time to time, may adopt rules and regulations for carrying out the purposes of this Plan.  The Committee’s determinations and its interpretation and construction of any provision of this Plan shall be final, conclusive and binding upon all Optionees and any holders of any Options granted under this Plan.

(d) Any and all decisions or determinations of the Committee shall be made either (i) by a majority vote of the members of the Committee at a meeting of the Committee or (ii) without a meeting by the unanimous written approval of the members of the Committee.

(e) No member of the Committee, or any Officer or Director of the Company or its Subsidiaries, shall be personally liable for any act or omission made in good faith in connection with this Plan.

16. Incentive Options for 10% Stockholders.  Notwithstanding any other provisions of this Plan to the contrary, an Incentive Stock Option shall not be granted to any person owning directly or indirectly (through attribution under Section 424(d) of the Code) at the date of grant, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company (or of its Subsidiary) at the date of grant unless the exercise price of such Option is at least 110% of the Fair Market Value of the Shares subject to such Option on the date the Option is granted, and such Option by its terms is not exercisable after the expiration of 10 years from the date such Option is granted.

17. Interpretation.

(a) This Plan shall be administered and interpreted so that all Incentive Stock Options granted under this Plan will qualify as Incentive Stock Options under Section 422 of the Code.  If any provision of this Plan should be held invalid for the granting of Incentive Stock Options or illegal for any reason, such determination shall not affect the remaining provisions hereof, and this Plan shall be construed and enforced as if such provision had never been included in this Plan.

(b) This Plan shall be governed by the laws of the State of Delaware.

(c) Headings contained in this Plan are for convenience only and shall in no manner be construed as part of this Plan or affect the meaning or interpretation of any part of this Plan.

(d) Any reference to the masculine, feminine, or neuter gender shall be a reference to such other gender as is appropriate.

(e) Time shall be of the essence with respect to all time periods specified for the giving of notices to the company hereunder, as well as all time periods for the expiration and termination of Options in accordance with Section 9 hereof (or as otherwise set forth in an option agreement).

18. Amendment and Discontinuation of this Plan.  Either the Board or the Com­mittee may from time to time amend this Plan or any Option without the consent or approval of the stockholders of the Company; provided, however, that, except to the extent provided in Section 9, no amendment or suspension of this Plan or any Option issued hereunder shall substantially impair any Option previously granted to any Optionee without the consent of such Optionee.

19. Termination Date.  This Plan shall terminate ten years after the date of adoption by the Board of Directors

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