FORM OF OPTION AGREEMENT

 

                                                                    Exhibit 10.5
 
                           FORM OF OPTION AGREEMENT

     This Option Agreement (this "Agreement") is made as of this 23rd day of
April, 1996, between Boston Chicken, Inc., a Delaware corporation ("BCI") and
Laurence Zwain ("Grantee").

     1. GRANT OF OPTION. Subject to the terms and conditions of this Agreement,
BCI hereby grants to Grantee the right and option (the "Option") to purchase
from BCI 278.52 shares of common stock, $.01 par value per share, of Einstein
Bros. Bagels, Inc. ("EBBI") (the "Option Shares"), which number of Option Shares
may be adjusted pursuant to Section 9 below.

     2. EXERCISE PRICE. The purchase price for each Option Share shall be
$1,436.14 per share (the "Exercise Price").

     3. VESTING. Subject to termination of the Option as provided herein, the
Option may be exercised, at any time and from time to time on or after April 23,
1997 but such Option shall not be exercisable for more than a percentage of the
aggregate number of Option Shares in accordance with the following schedule:

                                                         Cumulative
          Date                                           Percentage
          ----                                           ----------

     On or after April 23, 1997 to April 22, 1998        up to 10%

     April 23, 1998 to April 22, 1999                    up to 30%
 
     April 23, 1999 to April 22, 2000                    up to 60%

     April 23, 2000 to April 22, 2001                    up to 100%

     4. PROCEDURE FOR EXERCISE. If Grantee elects to exercise the Option,
Grantee shall deliver to BCI: (i) a notice of exercise (the "Exercise Notice")
in the form set forth on Exhibit A attached hereto, and (ii) full payment of the
Exercise Price for the Option Shares to be purchased. The date on which the
Exercise Notice and the Exercise Price for the Option Shares to be purchased are
received by BCI is referred to herein as the "Exercise Date." As soon as
practicable after the Exercise Date, BCI will deliver to Grantee one or more
properly executed EBBI stock certificates, in the name of Grantee, evidencing
the Option Shares so purchased, subject to appropriate restrictive legends.

     5. PAYMENT OF EXERCISE PRICE. The Exercise Price shall be paid by Grantee
by delivery of a certified check drawn on any state or national bank or savings
and loan association.

     6. PARTIAL EXERCISE. One or more partial exercises of the Option shall be
permitted from time to time.

     7. EXPIRATION. The Option and this Agreement shall expire and become void
upon the earlier of five (5) years from the date hereof or upon the termination
of Grantee's employment with BCI (including without limit due to Grantee's death
or disability), regardless of the cause for such termination.

     8. RESTRICTIONS ON OPTION AND OPTION SHARES. The Option shall be
exercisable only by Grantee. The Option may not be sold, pledged, assigned or
otherwise transferred without the prior written consent of BCI in its sole
discretion. Any purported transfer or transaction in violation of this Section
8. shall be null and void ab initio.

     9. ADJUSTMENTS. In the event of any change in the number of shares of
common stock of EBBI outstanding by reason of any stock split, stock dividend,
split-up, split-off, spin-off, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, sale by EBBI of all or part
of its assets, distribution to shareholders of EBBI other than a normal cash
dividend, or other extraordinary or unusual event occurring after the date
hereof and prior to exercise of the Option in full, the number and kind of
shares of common stock of EBBI or other property for which the Option may then
be exercised and the Exercise Price per Option Share shall be adjusted so as to
reflect such change.

     10. NO RIGHTS AS A STOCKHOLDER. Unless and until a certificate or
certificates representing such Option Shares of common stock of EBBI shall have
been issued to Grantee, Grantee shall not be or have any of the rights or
privileges of a stockholder of EBBI with respect to shares of common stock of
EBBI acquirable upon exercise of the Option.

     11. TAX WITHHOLDING. As a condition to any exercise of the Option, BCI
shall require Grantee to deposit with BCI such federal and state income,
employment and other taxes, if any, as may be required to be withheld under
applicable law. Such withholding shall be paid in cash.

     12. TAX CONSEQUENCES. Grantee is solely responsible for learning,
understanding, and accepting the tax consequences to him of the receipt and
exercise of the Option and the disposition of the Option Shares.

     13. INVESTMENT REPRESENTATIONS. Grantee, as a condition to this Agreement
and the exercise of the Option, represents and warrants that the Option and the
Option Shares have been and will be acquired for its own account and not with a
view to the resale or other distribution thereof. Grantee further represents
that he is an accredited investor within the meaning of Regulation D under the
Securities Act of 1933, as amended, that he has made all inquires concerning the
Option and the Option Shares, he deems appropriate, and has received
satisfactory responses to such inquires. Grantee understands that the Option and
the Option Shares have not been and will not be registered under the Securities
Act of 1933 and, therefore, cannot be sold or transferred unless either they are
subsequently registered under such Act (as well as under any applicable state
securities laws) or an exemption from such registration is available.

     14. GOVERNING LAW. THE PARTIES INTEND THIS AGREEMENT TO BE GOVERNED BY THE
LAWS OF THE STATE OF COLORADO. If the scope of any provision contained herein is
too broad to permit enforcement of such provision to its full extent, then such
provision shall be enforced to the maximum extent permitted by law. If any
provision of this Agreement shall be construed to be illegal or invalid, the
legality or validity of any other provision hereof shall not be affected
thereby, and any illegal or invalid provision of this Agreement shall be
severable, and all other provisions shall remain in full force and effect.

     15. AMENDMENT. This Agreement, and each section hereof, may be amended only
in writing, signed by the party against whom enforcement of any such amended
provision is sought.

     16. HEADINGS. Any headings of sections of this Agreement are solely for the
convenience of the parties and are not a part of this Agreement nor are they to
be used in its interpretation.

     17. COUNTERPARTS. This Agreement may be executed in several counterparts;
each such counterpart shall be considered as an original agreement and all such
executed counterparts shall constitute an Agreement.

     18. NOTICES. Any notice, request, instruction, or other document required
to be given under this Agreement by either party to the other shall be in
writing and delivered in person or by courier, or by facsimile transmission or
mailed by certified mail, postage prepaid, return receipt requested (such mailed
notice to be effective on the date such receipt is acknowledged) as follows:

               To BCI:

                   General Counsel
                   Boston Chicken, Inc.
                   14103 Denver West Parkway
                   Golden, Colorado  80401
                   Facsimile:  (303) 384-5339

               To Grantee:

                   Laurence Zwain
                   14103 Denver West Parkway
                   Golden, Colorado  80401
                   Facsimile:  (303) 384-5335

Notices sent for next day delivery by Federal Express or other reliable courier
shall be deemed given the next business day after sending, notices transmitted
by fax or personally delivered shall

be deemed given when so transmitted or delivered, respectively, and notices sent
by certified or registered mail shall be deemed given on the fifth business day
after sending.

     19. SUCCESSORS. This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors.

     20. ENTIRE AGREEMENT. This Agreement and exhibits hereto contain the entire
agreement of the parties hereto with respect to the transactions and
relationships contemplated herein, and supersedes all prior understandings and
agreements of the parties with respect to the subject matter hereof.

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

BOSTON CHICKEN, INC.

BY:
   --------------------------         ------------------------------
TITLE:  VICE PRESIDENT                LAURENCE ZWAIN
      -----------------------                              

                                   EXHIBIT A
                                   ---------

                                EXERCISE NOTICE

                                                   _________________
                                                          Date

Boston Chicken, Inc.
14103 Denver West Parkway
Golden, Colorado 80401

Attention:  General Counsel

Dear Sir:

     I wish to exercise the option granted on ________________, 1996 and
evidenced by that Option Agreement dated ___________________, 1996 to the extent
of ______________ shares of the common stock of Einstein Bros. Bagels, Inc., at
the option price of $1,436.14 per share. My check in the amount of
$________________ in payment of the entire purchase price and tax withholding
for these shares accompanies this letter.

     Please issue a certificate for these shares in the following name:

                    _____________________________
                    Name
                    _____________________________
                    Street Address
                    _____________________________
                    City/State/Zip

                                    Very truly yours,

                                    ______________________________
                                    Signature

                                    ______________________________
                                    Typed or Printed Name

                                    ______________________________
                                    Social Security Number 

Basic Info X:

Name: FORM OF OPTION AGREEMENT
Type: Form of Option Agreement
Date: May 31, 1996
Company: BOSTON CHICKEN INC
State: Delaware

Other info:

Date:

  • 23rd day of April , 1996
  • April 23 , 1997
  • April 22 , 1998
  • April 23 , 1998
  • April 22 , 1999
  • April 23 , 1999
  • April 22 , 2000
  • April 23 , 2000
  • April 22 , 2001

Organization:

  • Exercise Price per Option Share
  • General Counsel Boston Chicken , Inc.
  • Date Boston Chicken , Inc.
  • Einstein Bros. Bagels , Inc.

Location:

  • Delaware
  • Grantee
  • BOSTON CHICKEN
  • Denver West Parkway Golden
  • Colorado

Money:

  • $ .01
  • $ 1,436.14

Person:

  • LAURENCE ZWAIN

Percent:

  • 10 %
  • 30 %
  • 60 %
  • 100 %