NON-QUALIFIED STOCK OPTION AGREEMENT
EXHIBIT 10.2
EXECUTION COPY
AGREEMENT made as of September 8, 2011, by and between Frederick’s of Hollywood Group Inc., a New York corporation (the “Company”), and Xxxxxx Xxxxx (the “Employee”).
IT IS AGREED:
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6. Withholding Tax. Not later than the date as of which an amount first becomes includible in the gross income of the Employee for Federal income tax purposes with respect to the Option, the Employee shall pay to the Company, or make arrangements satisfactory to the Board regarding the payment of, any Federal, state and local taxes of any kind required by law to be withheld or paid with respect to such amount (“Withholding Tax”). The obligations of the Company under the Plan and pursuant to this Agreement shall be conditional upon such payment or arrangements with the Company and the Company shall, to the extent permitted by law, have the right to deduct any Withholding Taxes from any payment of any kind otherwise due to the Employee from the Company.
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7.1 In the event of a stock split, stock dividend, combination of shares, or any other similar change in the Common Stock of the Company as a whole, the Board shall make equitable, proportionate adjustments in the number and kind of shares covered by the Option and in the option price hereunder.
7.2 In the event of any reclassification or reorganization of the outstanding shares of Common Stock other than a change covered by Section 7.1 or that solely affects the par value of such shares of Common Stock, or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), the Employee shall have the right thereafter (until the expiration of the right of exercise of this Option) to receive upon the exercise hereof after such event, for the same aggregate Exercise Price payable hereunder immediately prior to such reclassification, reorganization, merger or consolidation, the amount and kind of consideration receivable by a holder of the number of shares of Common Stock of the Company obtainable upon exercise of this Option immediately prior to such event. The provisions of this Section 7.2 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.
8.3 Payment of Purchase Price. The Employee shall make cash payments by certified or bank check, in each case payable to the order of the Company; the Company shall not be required to deliver certificates for Option Shares until the Company has confirmed the receipt of good and available funds in payment of the purchase price thereof and of the Withholding Taxes, if any.
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(i) the Company, by appropriate and all required action, is duly authorized to enter into this Agreement and consummate all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by the Company to the Employee in accordance with the terms and conditions hereof, will be duly and validly issued and fully paid and non-assessable.
(i) the Employee is acquiring the Option and shall acquire the Option Shares for the Employee’s own account and not with a view towards the distribution thereof;
(ii) the Employee has received a copy of all reports and documents required to be filed by the Company with the Commission pursuant to the Exchange Act within the last 24 months and all reports issued by the Company to its shareholders;
(iii) the Employee understands that the Employee must bear the economic risk of the investment in the Option Shares, which cannot be sold by the Employee unless they are registered under the Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Option Shares for sale under the 1933 Act;
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(iv) in the Employee’s position with the Company, the Employee has had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of the information obtained pursuant to clause (ii) above;
(v) the Employee is aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Option Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein;
(vi) the Employee has received a copy of the Plan and understands Employee’s rights with respect to the Option Shares shall, in all respects, be subject to the terms and conditions of the Plan and this Agreement;
(vii) the Employee is aware of and understands that Employee is subject to the Company’s Xxxxxxx Xxxxxxx Policy and has received a copy of such policy as of the date of this Agreement; and
(viii) in the absence of an effective registration statement under the 1933 Act, the certificates evidencing the Option Shares shall bear the following legend:
“The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933. The shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act.”
12. Restriction on Transfer of Option Shares. Anything in this Agreement to the contrary notwithstanding, the Employee hereby agrees that he shall not sell, transfer by any means or otherwise dispose of the Option Shares acquired by the Employee without registration under the 1933 Act, or in the event that they are not so registered, unless (i) an exemption from the 1933 Act registration requirements is available thereunder, (ii) the Employee has furnished the Company with notice of such proposed transfer and the Company’s legal counsel, in its reasonable opinion, shall deem such proposed transfer to be so exempt; and (iii) such transfer is in compliance with the Company’s Xxxxxxx Xxxxxxx Policy, as in effect at such time.
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13.7 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to choice of law provisions.
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EMPLOYEE:
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FREDERICK’S OF HOLLYWOOD GROUP INC. | ||
/s/ Xxxxxx Xxxxx
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By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx Xxxxx
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Name:
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Xxxxxx X. Xxxxx
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Title
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Chief Executive Officer
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Address:
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
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DATE |
Frederick’s of Hollywood Group Inc.
0000 Xxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: The Board of Directors
Gentlemen:
In accordance with my Stock Option Agreement dated as of September 8, 2011 (“Agreement”) with Frederick’s of Hollywood Group Inc. (the “Company”), I hereby irrevocably elect to exercise the right to purchase _________ shares of the Company’s common stock, par value $.01 per share (“Common Stock”), which are being purchased for investment and not for resale.
As payment for my shares, enclosed is a certified or bank check payable to Frederick’s of Hollywood Group Inc. in the sum of $ .
I hereby represent, warrant to, and agree with, the Company that
(i) I acquired the Option and shall acquire the Option Shares for my own account and not with a view towards the distribution thereof;
(ii) I have received a copy of all reports and documents required to be filed by the Company with the Commission pursuant to the Exchange Act within the last 24 months and all reports issued by the Company to its shareholders;
(iii) I understand that I must bear the economic risk of the investment in the Option Shares, which cannot be sold by me unless they are registered under the Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available thereunder and that the Company is under no obligation to register the Option Shares for sale under the 1933 Act;
(iv) In my position with the Company, I have had both the opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning the terms and conditions of the offer made hereunder and to obtain any additional information to the extent the Company possesses or may possess such information or can acquire it without unreasonable effort or expense necessary to verify the accuracy of the information obtained pursuant to clause (ii) above;
(v) I am aware that the Company shall place stop transfer orders with its transfer agent against the transfer of the Option Shares in the absence of registration under the 1933 Act or an exemption therefrom as provided herein;
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(vi) I have received a copy of the Company’s 2010 Long-Term Incentive Equity Plan and understand my rights with respect to the Option Shares shall, in all respects, be subject to the terms and conditions of this Company’s 2010 Long-Term Incentive Equity Plan and this Agreement;
(vii) I am aware of and understand that I am subject to the Company’s Xxxxxxx Xxxxxxx Policy and have received a copy of such policy; and
(viii) in the absence of an effective registration statement under the 1933 Act, the certificates evidencing the Option Shares shall bear the following legend:
“The shares represented by this certificate have been acquired for investment and have not been registered under the Securities Act of 1933. The shares may not be sold or transferred in the absence of such registration or an exemption therefrom under said Act.”
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature)
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(Address)
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(Print Name)
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(Address)
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(Social Security Number)
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