EXHIBIT 10.45
INCENTIVE STOCK OPTION AGREEMENT
under the
TRACTOR SUPPLY COMPANY
2006 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT, dated as of between TRACTOR SUPPLY COMPANY, a
Delaware corporation (the “Company”), and (the “Optionee”).
The Company’s Compensation Committee (the
“Committee”) has determined that the objectives of
the Company’s 2006 Stock Incentive Plan (the
“Plan”) will be furthered by granting to the Optionee
an option pursuant to the Plan.
In consideration of the foregoing and of the mutual undertakings set forth in this Stock
Option Agreement (the
“Agreement”),
the Company and the Optionee hereby agree as follows:
SECTION 1.
Grant of Option.
The Company hereby grants to the Optionee a stock option
to purchase
shares of the Common Stock of
the Company, at a purchase price of
per
share, which option is intended to qualify for the special incentive stock option tax treatment
described in Code section 422.
The Company cannot guarantee that the special tax treatment will apply. For example, if the
Optionee sells the Common Stock acquired pursuant to the exercise of this option either within two
years after the date of this Agreement or within one year after the date this option (or part
thereof) is exercised, this special tax treatment will not apply.
If the option (or any part thereof) does not qualify for incentive stock option treatment for
any reason, then, to the extent of such nonqualification, the option (or portion thereof) shall be
treated as a nonqualified stock option granted under the Plan, provided that the option (or portion
thereof) otherwise satisfies the terms and conditions of the Plan generally relating to
nonqualified stock options.
SECTION 2. Exercisability. Subject to Section 4 hereof, the option shall be
exercisable as follows:
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% of Shares |
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Cumulative |
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Becoming |
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% of Shares |
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Exercisable |
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Exercisable |
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Vesting Date = Grant Date Plus 1 year |
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33-1/3 |
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33-1/3 |
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Vesting Date = Grant Date Plus 2 years |
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33-1/3 |
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66-2/3 |
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Vesting Date = Grant Date Plus 3 years |
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33-1/3 |
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100.0 |
% |
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Through Expiration Date = Grant Date Plus 10 years |
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100.0 |
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The option shall not be exercisable prior to the first anniversary of the date of grant, and shall
become cumulatively exercisable with respect to
33-1/3% of the shares of Common Stock subject
thereto, rounded down to the next lower full share, on the first anniversary of the date of grant,
and with respect to an additional
33-1/3% of the shares of Common Stock subject thereto, rounded
down to the next lower full share, on the second anniversary of the date of grant, and shall become
100% exercisable on the third anniversary of the date of grant, and shall remain 100% exercisable
until
Expiration Date plus 1 day and shall terminate and cease to be exercisable on
Expiration Date
plus 1 day.
SECTION 3. Method of Option Exercise; Involuntary Option Cash-Out.
(a) The option or any part thereof may be exercised only by giving to
the Company written
notice of exercise in the form attached hereto as Exhibit A. The Optionee shall exercise any
options through
the Company sponsored exercise program. The Optionee shall have no right to
receive shares of Common Stock with respect to an option exercise, prior to the option exercise
date. For purposes of this Agreement, the option exercise date shall be deemed to be the sixth
business day immediately following the date written notice of exercise is received by
the Company.
(b) At any time after
the Company’s receipt of written notice of exercise and prior to the
option exercise date, the Committee, in its sole discretion, shall have the right, by written
notice to the Optionee, to cancel the option or any part thereof subject to the written notice of
exercise if the Committee, in its sole judgment, determines that legal or contractual restrictions
and/or blockage and/or other market considerations would make
the Company’s acquisition of Common
Stock from, and/or the Optionee’s sale of Common Stock to, the public markets illegal,
impracticable or inadvisable if the Committee determines to so cancel the option or any part
thereof subject to the written notice of exercise,
the Company shall pay to the Optionee an amount
equal to the excess (if any) of (i) the aggregate fair market value of the shares of Common Stock
subject to the option or part thereof cancelled (determined as of the option exercise date) over
(ii) the aggregate option exercise price of the shares of Common Stock subject to the option or
part thereof cancelled. Such amount shall be delivered to the Optionee as soon as practicable
after such option or part thereof is cancelled.
SECTION 4. Termination of Employment.
(a) General Rule. The non-vested portion of any option shall terminate and expire
upon the Optionee’s termination of employment for any reason except that upon termination of
Optionee’s employment or service as a result of (1) death, (2) disability (as defined below), or
(3) retirement (as defined below), any unvested portion of the option granted hereunder shall vest
in full as of the date of such termination. The vested portion shall remain exercisable following
termination of employment only under the circumstances and to the extent provided in this Section
4.
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(b)
Improper Activity; Quit. If the Optionee’s employment is terminated for cause or
if the Optionee quits employment, whether or not the Optionee is a party to a written employment
contract, the option granted hereunder shall terminate and expire on the day the Optionee’s
employment terminates. For purposes of this Section 4, an Optionee’s employment shall be deemed to
have been terminated for
“cause” if he is discharged on account of fraud or embezzlement or other
unlawful or tortuous conduct, whether or not involving or against the
Company or any Affiliate, or for violation of a policy of
the Company or any Affiliate or for
serious and willful acts of misconduct detrimental to the business or reputation of
the Company or
any Affiliate (whether or not such acts constitute
“cause” pursuant to any written employment
contract with the Optionee) or if he is discharged for
“cause” or any like term as defined in any
written employment
contract with the Optionee.
(c)
Regular Termination; Leaves of Absence. If the Optionee’s employment terminates
for reasons other than as provided in subsection (b) above or subsections (d), (e) or (f) below,
the vested portion of the option granted hereunder may be exercised until the earlier of (i) three
months after the day his employment terminates and (ii) the date on which the option otherwise
terminates or expires in accordance with the applicable provisions of the Plan and this Agreement;
provided that the Committee may determine, in its sole discretion, such longer or shorter
period for exercise (not to exceed the remaining term of the option) in the case of an individual
whose employment terminates for reasons as provided herein in subsection (c), or solely because his
employer ceases to be an Affiliate or he transfers his employment with
the Company’s consent to a
purchaser of a business disposed of by
the Company. Subject to Section 2.7(e) below, the Committee
may, in its discretion, determine (A) whether any leave of absence (including short-term or
long-term disability or medical leave) constitutes a termination of employment within the meaning
of the Plan and (B) the impact, if any, of any such leave on awards under the Plan theretofore made
to an Optionee who takes any such leave.
Any extension of the exercise period beyond 90 days from the date of such termination will
automatically disqualify the option from the special tax treatment accorded incentive stock
options.
(d) Death. In the event that the optionee’s employment terminates by reason of death,
or if the Optionee’s employment shall terminate as described in subsection (c) above and he dies
within the period for exercise provided for therein, the vested portion of the option shall be
exercisable by the person to whom the option has passed under the Optionee’s will (or if
applicable, pursuant to the laws of descent and distribution) until the earlier of (i) one year
after the Optionee’s death and (ii) the date on which the option otherwise terminates or expires in
accordance with the applicable provisions of the Plan and this Agreement.
(e)
Disability. In the event that Optionee’s employment or service terminates by reason of
Disability (as defined below), the vested portion of the option granted hereunder shall be
exercisable by Optionee until the earlier of (i) three years following the date of such termination
of employment or service, and (ii) the date on which the option granted hereunder otherwise
terminates or expires in accordance with the applicable provisions of the Plan and this Agreement.
For purposes of this Agreement,
“Disability” means a disability that would qualify as a total and
permanent disability under
the Company’s then current long-term disability plan.
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(f)
Right of Discharge Reserved. Nothing in the Plan or this Agreement shall confer upon
the Optionee or any other person the right to continue in the employment of
the Company or any
Affiliate or affect any right which
the Company or any Affiliate may have to terminate the
employment of the Optionee or any other person.
SECTION 5. Withholding Tax Requirements. If as a condition of delivery of shares of
Common Stock upon the Optionee’s exercise of an option granted hereunder the Committee determines
that it is necessary or advisable to withhold an amount sufficient to satisfy any federal, state
and other governmental withholding tax requirements related thereto, then the Optionee shall be
required to satisfy all withholding tax requirements related to such option in accordance with
Section 3.4 of the Plan. By entering into this Agreement, the Optionee hereby agrees that, if the
Committee shall make such determination, then (a) the Optionee shall remit the full amount
necessary to satisfy such withholding tax requirements within 15 days after his receipt of a
statement for such amount from the Committee (unless and to the extent that the Committee permits
the Optionee to use the method of payment described in Section 3.4(b) of the Plan), and (b) the
Company shall be entitled to withhold the amount of any such tax requirements from any salary or
other payments due to the Optionee, and to refuse to recognize such option exercise until full
satisfaction of such withholding tax requirements. The Optionee further agrees and acknowledges
that all other taxes, duties and fees related to such option exercise are for the Optionee’s own
account and must be paid directly by the Optionee.
SECTION 6.
Plan Provisions. This Agreement shall be subject to all of the terms and
provisions of the Plan, which are hereby
incorporated herein by reference and made a part hereof,
including, without limitation, the provisions of Section 3.2 (generally relating to consents
required by securities and other laws) and 3.11 (generally relating to the effects of certain
reorganizations and other extraordinary transactions) of the Plan. Any term defined in the Plan
shall have the same meaning in this Agreement as in the Plan, except as otherwise defined herein.
SECTION 7. Optionee’s Acknowledgements. By entering into this Agreement the Optionee
agrees and acknowledges that (a) he has received and read a copy of the Plan, including, without
limitation, Section 3.8(c) thereof (generally relating to waivers of claims to continued exercise
or vesting of awards, damages and severance entitlements related to non-continuation of awards),
and accepts this option upon all of the terms thereof, and (b) no member of the Committee shall be
liable for any action or determination made in good faith with respect to the Plan or this
Agreement or any award thereunder or hereunder.
SECTION 8. Nontransferability. No right granted to the Optionee under the Plan or
this Agreement shall be assignable or transferable by the Optionee (whether by operation of law or
otherwise and whether voluntarily or involuntarily), other than by will or by the laws of descent
and distribution. During the lifetime of the Optionee, all rights granted to the Optionee under
the Plan or under this Agreement shall be exercisable only by the Optionee.
SECTION 9.
Execution of Agreement. Notwithstanding anything contained in this
Agreement to the contrary, the option may not be exercised until the Optionee has returned an
executed copy of this Agreement to
the Company.
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SECTION 10.
Notices. Any notice to be given to
the Company hereunder shall be in
writing and shall be addressed to the Corporate Controller of Tractor Supply Company at 200 Powell
Place,
Brentwood,
Tennessee 37027, or at such other address as
the Company may hereafter designate
to the Optionee by notice as provided herein. Any notice to be given to the Optionee hereunder
shall be addressed to the Optionee at the address set forth below or at such other address as the
Optionee may hereafter designate to
the Company by notice as provided herein. Notices
hereunder shall be deemed to have been duly given when received by personal delivery or by
registered or certified mail to the party entitled to receive the same.
SECTION 11.
Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the successors and assigns of
the Company and, to the extent
set forth in Section 3.3 of the Plan and Section 8 hereof, the heirs and personal representatives
of the Optionee.
SECTION 12. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving effect to the conflicts
of laws principles thereof.
SECTION 13.
Modification of Agreement. This Agreement may not be altered, modified,
changed or discharged other than by a written instrument signed by or on behalf of both
the Company
and the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
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| TRACTOR SUPPLY COMPANY |
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OPTIONEE: |
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By: |
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Current Address: |
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Address:
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please print |
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5
EXERCISE NOTICE
Exhibit A
Corporate Controller
Tractor Supply Company
200 Powell Place
Brentwood,
TN 37027
The undersigned hereby irrevocably elects to exercise the right of purchase represented by the
Stock Option Agreements (the
“Agreement”), dated as of per Exhibit A, for, and to purchase
thereunder, the number of shares of the common stock of Tractor Supply Company (the
“Common
Stock”), as provided for therein and set forth in Exhibit A. The full amount of the option
exercise price shall be paid on the option exercise date, at the time this exercise notice is
received by
the Company (unless the Committee exercises its right to cancel the option (or any part
thereof) subject hereto in accordance with Section 2.5(f) of the Tractor Supply Company Stock
Incentive Plan (the
“Plan”) and Section 3 of the Agreement). Capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed to them in the Plan or the
Agreement, as applicable.
Payment of the option exercise price shall be made in full in the form of a certified or
official bank check or the equivalent thereof acceptable to the Committee (or if so permitted by
the Committee, (i) by personal check (subject to collection), (ii) by delivery to
the Company of an
assignment of the proceeds from the sale of Common Stock acquired upon exercise and an
authorization to the broker or selling agent to pay that amount to
the Company or (iii) by delivery
of shares of Common Stock already owned by the undersigned for at least six months prior to such
delivery), or in such other manner as may be determined by the Committee. The undersigned hereby
agrees to provide, if so requested by the Committee, a written opinion of counsel satisfactory to
the Company to the effect that such assignment of proceeds from such broker or selling agent, or
such delivery of shares of Common Stock already owned by the Optionee, if permitted by the
Committee, would not result in the Optionee incurring any liability under Section 16(b) of the
Securities Exchange Act of 1934 and does not require any Consent (as defined in the Plan).
The undersigned hereby agrees and acknowledges that he has received and reviewed a copy of the
current prospectus relating to the issuance of shares under the Plan and the most recent annual
report to stockholders of
the Company.
The undersigned hereby further agrees to be bound by the terms and provisions of the Plan and
the Agreement, including, without limitation, Section 5 of the Agreement (generally relating to tax
withholding requirements).
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Exercise of Stock Options:
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Vested Shares Available |
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Shares To Be Exercised |
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Please issue a certificate or certificates for such shares of Common Stock to me at the address set
forth in the Agreement, or in the name of at the address listed
below:
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