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EXHIBIT 10.24
NONQUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of July 27, 1999 (the "Date of Grant")
between XxxxxxxXxxxxx.xxx, Inc., a Delaware corporation (hereinafter referred to
as the "Corporation"), and Xxxxxxx X. Xxxxxx (hereinafter referred to as the
"Employee").
W I T N E S S E T H
WHEREAS, the Corporation desires, in connection with the
employment of the Employee and in accordance with its Stock Option Plan for
Employees, effective as of June 14, 1999 (the "Plan"), to provide the Employee
with an opportunity to acquire Shares of the Corporation on favorable terms and
thereby increase her proprietary interest in the continued progress and success
of the business of the Corporation;
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein set forth and other good and valuable consideration, the
Corporation and the Employee hereby agree as follows:
1. Definitions. Any capitalized term not defined herein shall
have the meaning set forth in the Employee's employment agreement.
2. Grant of Option. The Corporation hereby issues to the
Employee the right and option to purchase from the Corporation 87,687 shares of
the Corporation's Class A Common Stock, par value $.01 per share (the "Shares")
at an exercise price of $14.08 per share. In addition, the Employee shall have
the anti-dilution protection specified in Section 2(D)(3)(a) of her employment
agreement, as in effect on the date hereof. The Option is not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
3. Exercise of Option. The Option shall be exercisable on the
terms and conditions hereinafter set forth:
(a) The Option shall (A) become exercisable at a
rate of one-third (33-1/3%) on each of the first three anniversaries of the
Date of Grant, and (B) become exercisable earlier than in (A) above upon a
Change in Control, IPO of the Corporation or Employee's death or Disability to
the extent provided in the Employee's employment agreement, as in effect on the
date hereof.
4. Term of Option. The term of the Option shall be a period of
ten (10) years from the Date of Grant, subject to earlier termination or
cancellation as provided in this Agreement. All Options, to the extent
unexercised, shall expire on the day immediately prior to the tenth anniversary
of the Date of Grant. The holder of the Option shall not have any rights to
dividends or any other rights of a stockholder with respect to any Shares
subject to the Option until such Shares shall have been issued to her (as
evidenced by the appropriate entry on the books of a duly
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authorized transfer agent of the Corporation), provided that the date of
issuance shall not be earlier than the date this Option is exercised and payment
of the full purchase price of the Shares (with respect to which this Option is
exercised) is made to the Corporation.
5. Non-Transferability of Option. The Option shall not be
assigned, transferred or otherwise disposed of, or pledged or hypothecated in
any way, and shall not be subject to execution, attachment or other process,
except as may be provided in the Plan. Any assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions of
the Plan, or any levy of execution, attachment or other process attempted upon
the Option, will be null and void and without effect. Any attempt to make any
such assignment, transfer, pledge, hypothecation or other disposition of the
Option or any attempt to make any such levy of execution, attachment or other
process will cause the Option to terminate immediately upon the happening of any
such event, provided, however, that any such termination of the Option under the
foregoing provisions of this Section 5 will not prejudice any rights or remedies
which the Corporation or any Parent or Subsidiary may have under this Agreement
or otherwise.
6. Exercise Upon Cessation of Employment. (a) If the Employee
at any time ceases to be an employee of the Corporation and of any Parent or
Subsidiary by reason of her discharge for Good Cause, at the time of such
termination of employment, the Option (whether or not then exercisable to any
extent) shall terminate and the Employee shall forfeit all rights hereunder. If,
however, the Employee ceases to be an Employee for any other reason (other than
death), any outstanding portion of an Option that has not become exercisable
shall terminate on the date of such termination of employment (unless provided
otherwise by the Board or the Committee, in its sole discretion, as applicable).
In no event, however, may the Option be exercised after the expiration of the
term provided in Section 4 hereof. Notwithstanding the foregoing provisions of
this Section 6, so long as there has not been an IPO, the Corporation shall have
the right in its sole discretion to purchase during the one year period
following the date of the Employee's termination of employment, and the Employee
shall have the obligation to sell to the Corporation during such period (i) any
outstanding exercisable Option at its then Fair Market Value (which in all cases
shall be the difference between the Fair Market Value of each Share under such
Option and the exercise price) and (ii) any Shares purchased by the Employee
through the exercise of an Option at their then Fair Market Value.
(b) The Option shall not be affected by any
change of duties or position of the Employee so long as she continues to be an
Employee except as described in Section 7 of the Plan; notwithstanding the
foregoing, if Employee elects to receive additional options pursuant to Section
2(D)(3)(b)(ii) of her employment agreement she will be deemed to have
irrevocably waived her right to have the vesting of her Options accelerate
pursuant to Section 7B of the Plan. If the Employee is granted a temporary leave
of absence, such leave of absence shall be deemed a continuation of her
employment by the Corporation or of any Parent or Subsidiary thereof for the
purposes of this Agreement, but only if and so long as the employing corporation
consents thereto.
7. Exercise Upon Death. If the Employee dies while she is
employed by the Corporation or by any Parent or Subsidiary and on or after the
first date upon which she would have
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been entitled to exercise the Option under the provisions of Section 3 hereof,
the Option may, but only to the extent exercisable (and not exercised) on the
date of her death, be exercised by the estate of the Employee (or by the person
or persons who acquire the right to exercise the Option by written designation
of the Employee) for the remainder of its original term, at the end of which
period the Option, to the extent not then exercised, shall terminate and the
estate or other beneficiaries shall forfeit all rights thereunder. So long as
there has been no Initial Public Offering, and subject to any restrictions or
conditions set forth in applicable credit and other financing agreements of the
Corporation, (i) with respect to any outstanding Option exercisable by the
estate or beneficiary of a deceased Participant, such estate or beneficiary
shall have the right to sell to the Corporation during the one year period
following the date of death of the Participant, and the Corporation shall have
the obligation to purchase, such Option at its then Fair Market Value; and (ii)
with respect to shares of Common Stock held of record or beneficially by the
estate or beneficiary of a deceased Participant through the exercise of such
Option, such estate or beneficiary shall have the right to sell to the
Corporation during the one year period following the date of death of the
Participant, and the Corporation shall have the obligation to purchase, such
Shares at their then Fair Market Value. Notwithstanding the foregoing provisions
of this Section 7, at any time during the one year period following the date of
death of the Employee, the Corporation shall have the right in its sole
discretion to purchase, and the estate or beneficiary of the Employee shall have
the obligation to sell to the Corporation (i) any outstanding Option exercisable
by the estate or beneficiary for an amount equal to the Fair Market Value of a
Share minus the exercise price of such Option and (ii) any Shares held of record
or beneficially by the estate or beneficiary through the exercise of an Option
at their then Fair Market Value.
8. Registration. The Corporation may register or qualify the
shares covered by the Option for sale pursuant to the Securities Act of 1933, as
amended, at any time prior to or after the exercise in whole or in part of the
Option.
9. Method of Exercise of Option. (a) Subject to the terms and
conditions of this Agreement, the Option shall be exercisable by written notice
to the Secretary of the Corporation (the "Notice") with provision for payment to
the Corporation in accordance with the procedure prescribed herein. Each such
Notice shall:
(i) state the election to exercise the Option
and the number of Shares with respect to which it is being exercised;
(ii) contain a representation and agreement as to
investment intent, if required by counsel to the Corporation with
respect to such Shares, in a form satisfactory to such counsel;
(iii) be signed by the Employee or the person or
persons entitled to exercise the Option and, if the Option is being
exercised by any person or persons other than the Employee, be
accompanied by proof, satisfactory to counsel to the Corporation, of
the right of such other person or persons to exercise the Option;
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(iv) include payment of the full purchase price for
the shares of Common Stock to be purchased pursuant to such exercise of
the Option; and
(v) be received by the Corporation on or before the
date of the expiration of this Option. In the event the date of
expiration of this Option falls on a day which is not a regular
business day at the Corporation's executive office, such written Notice
must be received at such office on or before the last regular business
day prior to such date of expiration.
(b) Payment of the exercise price of an Option
shall be made (i) by delivering to the Corporation a certified or bank cashier's
check payable to the order of the Corporation, (ii) by delivering to the
Corporation properly endorsed certificates of shares of Common Stock (or
certificates accompanied by an appropriate stock power) with signature
guaranties by a bank or trust company, (iii) by having withheld from the total
number of shares of Common Stock to be acquired upon the exercise of this Option
a specified number of such shares of Common Stock, (iv) by any form of
"cashless" exercise, or (v) by any combination of the above.
(c) The Option shall be deemed to have been
exercised on the date the Notice was received by the Corporation with respect to
any particular shares of Common Stock if, and only if the preceding, provisions
of this Section 9 and the provisions of Section 10 hereof shall have been
complied with, and any Notice shall be void and of no effect if all of the
provisions of Section 9 and of Section 10 shall not have been complied with.
(d) The certificate or certificates for shares
of Common Stock as to which an Option is exercised will be registered in the
name of the Employee (or in the name of the Employee's estate or other
beneficiary), or if the Option is exercised by the Employee and the Employee so
requests in the Notice exercising the Option, will be registered in the name of
the Employee and another person jointly, with right of survivorship, and will be
delivered as soon as practicable after the date the Notice is received by the
Corporation (accompanied by full payment of the exercise price), but only upon
compliance with all of the provisions of this Agreement.
(e) If the Employee fails to accept delivery of
and pay for all or any part of the number of Shares specified in such Notice,
her right to exercise the Option with respect to such undelivered Shares may be
terminated in the sole discretion of the Committee. The Option may be exercised
only with respect to full Shares.
(f) The Corporation shall not be required to
issue or deliver any certificate or certificates for shares of its Common Stock
purchased upon the exercise of any part of this Option prior to the payment to
the Corporation, upon its demand, of any amount requested by the Corporation for
the purpose of satisfying its liability, if any, to withhold state or local
income or earnings tax or any other applicable tax or assessment (plus interest
or penalties thereon, if any, caused by a delay in making such payment) incurred
by reason of the exercise of this Option or the transfer of Shares thereupon.
Such payment shall be made by the Employee in cash or, with the consent of the
Corporation, by tendering to the Corporation shares of Common Stock equal in
value
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to the amount of the required withholding. In the alternative, the Corporation
may, at its option, satisfy such withholding requirements by withholding from
the Shares to be delivered to the Employee pursuant to an exercise of this
Option the number of Shares equal in value to the amount of the required
withholding.
10. Approval of Counsel. The exercise of the Option and the
issuance and delivery of shares of Common Stock pursuant thereto shall be
subject to approval by the Corporation's counsel of all legal matters in
connection therewith, including, but not limited to, compliance with the
requirements of the Securities Act and the Exchange Act, and the rules and
regulations thereunder, and the requirements of any stock exchange upon which
the Common Stock may then be listed.
11. Resale of Common Stock. (a) If so requested by the
Corporation, upon any sale or transfer of the Common Stock purchased upon
exercise of the Option, the Employee shall deliver to the Corporation an opinion
of counsel satisfactory to the Corporation to the effect that either (i) the
Common Stock to be sold or transferred has been registered under the Securities
Act, and that there is in effect a current prospectus meeting the requirements
of Section 10(a) of the Securities Act which is being or will be delivered to
the purchaser or transferee at or prior to the time of delivery of the
certificates evidencing the Common Stock to be sold or transferred, or (ii) such
Common Stock may then be sold without violating Section 5 of said Act.
(b) The Shares issued upon exercise of an Option
shall bear the following legend, if required by counsel for the Corporation:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
TRANSFER OF SUCH SECURITIES MAY BE MADE UNLESS SUCH TRANSFER
IS MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT.
12. Reservation of Shares. Unless the Shares are readily
tradable on a generally recognized securities market, the Corporation shall at
all times during the term of the Option reserve and keep available such number
of Shares as will be sufficient to satisfy the requirements of this Agreement.
13. Confidential Information. During the employment of the
Employee by the Corporation and thereafter, the Employee shall not disclose to
anyone else, directly or indirectly, any proprietary or business sensitive
information concerning the business of the Corporation, its Parent or
Subsidiary, or use, or permit or assist, by acquiescence or otherwise, anyone
else to use, directly or indirectly, any such information. Such information
shall include all information to the extent not generally known to the public
which, if released to unauthorized persons, could be detrimental to
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the reputation or business interests of the Corporation, its Parent or
Subsidiary. Notwithstanding any provision in this Agreement to the contrary, the
right of the Employee to exercise the Option shall terminate upon a
determination by the Committee, in its sole discretion, that the Employee has
engaged in the foregoing conduct. The provisions of this Section 13 shall not
apply to such disclosure where the Employee is legally required to do so.
14. Employment. Nothing contained in this Agreement shall be
construed (a) as a contract of employment between the Employee and the
Corporation or any Parent or Subsidiary, (b) as a right of the Employee to be
continued in the employ of the Corporation or of any Parent or Subsidiary, or
(c) as a limitation of the right of the Corporation or of any Parent or
Subsidiary to discharge the Employee at any time, with or without cause.
15. Limitation of Action. The Employee and the Corporation
each acknowledges that every right of action accruing to her or it, as the case
may be, and arising out of or in connection with this Agreement against the
Corporation or a Parent or Subsidiary, on the one hand, or against the Employee,
on the other hand, shall, irrespective of the place where an action may be
brought, cease and be barred by the expiration of three years from the date of
the act or omission in respect of which such right of action arises.
16. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person, by air courier or by certified mail to the
proper address. All notices to the Corporation or the Committee shall be
addressed to them at XxxxxxxXxxxxx.xxx, Inc., c/o Vitamin Shoppe Industries,
Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx, Attn: President. All
notices to the Employee shall be addressed to (a) the Employee at 00 Xxxxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 and (b) Xxxxx X. Xxxxxx, Esq., Xxxxxx &
Associates, P.C., 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000. Anyone
to whom a notice may be given under this Agreement may designate a new address
by notice to that effect.
17. Benefits of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor and assign of the Corporation. All
obligations imposed upon the Employee and all rights granted to the Corporation
under this Agreement shall be binding upon the Employee's heirs, legal
representatives, successors and assigns.
18. Severability. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal or unenforceable, such
illegality or unenforceability shall not affect the validity and enforceability
of the remaining legal and enforceable provisions hereof, which shall be
construed as if such illegal or unenforceable provision or provisions had not
been inserted.
19. Governing Law. This Agreement will be construed and
governed in accordance with the laws of the State of New York.
20. Incorporation of Terms of Plan. This Agreement shall be
interpreted under, and subject to, all of the terms and provisions of the Plan,
which are incorporated herein by reference, and in the event of any conflict or
inconsistency between the provision of this Agreement
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and the Plan, the Plan shall govern. Notwithstanding the foregoing, in the event
of any conflict between the terms and provisions hereof and the terms and
provisions of the Employee's employment agreement (as in effect on the date
hereof), the terms of such employment agreement shall control.
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be executed in its name and its corporate seal to be hereunto affixed and the
Employee has hereunto set her hand all as of the date, month and year first
above written.
XxxxxxxXxxxxx.xxx, Inc.
By:
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Name: Xxxxxxx Xxxxxxxx
Title: Chairman of the Board of Directors
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Xxxxxxx X. Xxxxxx
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Social Security Number
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