Exhibit 10.30
NON-QUALIFIED STOCK OPTION AGREEMENT
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Name of Optionee: C. Xxxxxxx Xxxxx
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No. Of Option Shares: 150,000 Grant Date: September 1, 1998
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Option Exercise Price: $2.25 Expiration Date: September 1, 2008
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Little Switzerland, Inc., a Delaware corporation (the "Company"), hereby
grants to the Optionee named above, who is now employed by the Company, an
option ("Stock Option") to purchase on or prior to the expiration date of this
Stock Option specified above (the "Expiration Date") all or any part of the
number of shares of common stock, par value $0.01 per share, (the "Common
Stock") of the Company specified above (the "Option Shares") at the per share
Stock Option exercise price specified above, subject to the terms and conditions
set forth herein. This Stock Option is not intended to qualify as an "incentive
stock option" under Section 422(b) of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").
1. Vesting Schedule.
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(a) No portion of this Stock Option may be exercised until such
portion shall have vested. Except as set forth below, and subject to the
determination of the Board of Directors of the Company in its sole and absolute
discretion to accelerate the vesting schedule
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hereunder, this Stock Option shall be vested and exercisable with respect to the
following number of Option Shares on the dates indicated:
Cumulative Number of
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Option Shares Exercisable Vesting Date
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30,000 September 1, 1998
60,000 September 1, 1999
90,000 September 1, 2000
120,000 September 1, 2001
150,000 September 1, 2002
In any event this Stock Option shall become fully vested and exercisable
with respect to all of the Option Shares on September 1, 2002. Once vested, this
Stock Option shall continue to be exercisable at any time or times prior to the
Expiration Date, subject to the provisions hereof.
(b) In the event the Optionee's Directorship (as defined in Section
3(a) hereof) terminates for any reason other than his failure to be re-elected
to his position as a member of the Board of Directors of the Company at the next
annual stockholders' meeting or special meeting in lieu thereof, only those
Stock Options that have vested prior to such termination shall be exercisable by
the Optionee.
(c) In the event that the Optionee is not re-elected as a member of
the Board of Directors of the Company at the next annual stockholders' meeting
or special meeting in lieu thereof or of a "change in control" (as defined
below) of the Company, all Stock Options then outstanding granted to the
Optionee shall become fully vested and immediately exercisable.
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(d) For purposes of this Agreement, a "change of control" shall be
deemed to have occurred in the following instances: (i) if there has occurred a
change in control which the Company would be required to report in response to
Item 6(e) of Schedule 14A promulgated under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), or, if such regulation is no longer in effect, any
regulations promulgated by the Securities and Exchange Commission pursuant to
the 1934 Act which are intended to serve similar purposes; (ii) when any
"person" (as such term is used in Section 13(d) and 14(d)(2) of the 0000 Xxx)
becomes a "beneficial owner" (as such term is defined in Rule 13d-3 promulgated
under the 1934 Act), directly or indirectly, of securities of the Company
representing twenty percent (20 %) or more of the total number of votes that may
be cast for the election of Directors of the Company; (iii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
another person or entity; (iv) the election of Directors of the Company equal to
one-third or more of the total number of Directors then in office who have not
been nominated by the Company's Board of Directors or a committee thereof; or
(v) the signing of an agreement, contract or other arrangement providing for any
of the transactions described above in this definition of change of control. If
the Optionee is a Director or officer of Company he shall not be deemed, solely
as a result of his position as Director or officer of the Company, to be the
beneficial owner of any securities of the Company that are beneficially owned by
any other Director or officer of the Company.
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2. Exercise of Stock Option.
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(a) The Optionee may exercise only vested portions of this Stock
Option and only in the following manner: Prior to the Expiration Date, the
Optionee may give written notice on any business day to the Board of Directors
of the Company (the "Board of Directors") of his election to purchase some or
all of the shares purchasable at the time of such notice. Said notice shall
specify the number of shares to be purchased and shall be accompanied (i) by
payment therefor in cash or, at the Optionee's election, in shares of Common
Stock of the Company having a fair market value (as determined below) on the
date of exercise equal to or less than the total option exercise price, plus
cash, in an amount equal to the amount, if any, by which the total option
exercise price exceeds the fair market value of such shares of Common Stock, and
(ii) by such agreement, statement or other evidence as the Company may require
in order to satisfy itself that the issuance and conveyance of the shares being
purchased pursuant to such exercise and any subsequent resale thereof will be in
compliance with applicable laws and regulations, including, without limitation,
all federal and state securities laws.
(b) Certificates for the shares so purchased will be issued and
delivered to the Optionee upon compliance to the reasonable satisfaction of the
Company with all requirements under applicable laws or regulations in connection
with such issuance. Until the Optionee shall have complied with the requirements
hereof, the Company shall be under no obligation to issue the shares subject to
this Stock Option, and the determination of the Board of Directors (exclusive of
the Optionee) as to such compliance shall be final and binding on the Optionee.
The Optionee shall not be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares of Common Stock subject to this
Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company
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shall have issued and delivered the shares to the Optionee, and the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such shares of Common Stock.
(c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the number
of shares with respect to which this Stock Option is being exercised is the
total number of shares subject to exercise under this Stock Option at the time.
(d) Notwithstanding any other provision hereof, no portion of this Stock Option
shall be exercisable after the Expiration Date.
(d) Notwithstanding any other provision hereof, no portion of this
Stock Option shall be exercisable after the Expiration Date.
(e) For purposes of this Agreement, the fair market value of the
Common Stock shall be determined in good faith by the Board of Directors
(exclusive of the Optionee), provided, however, that (x) if the Common Stock is
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System on the date the Stock Option is granted, fair market
value shall not be less than the average of the highest bid and lowest asked
prices of the Common Stock on such date or on the last preceding date on which a
sale was reported, or if the Common Stock is admitted to trading on the National
Association of Securities Dealers Automated Quotation National Market System on
the date the Stock Option is granted, fair market value shall not be less than
the closing price reported for the Common Stock on such National Market System
on such date or on the last preceding date on which a sale was reported, or
(y) if the Common Stock is admitted to trading on a national securities exchange
on the date the Stock Option is granted, fair market value shall not be less
than the last sale price reported for the Common Stock on such exchange on such
date or on the last date preceding such date on which a sale was reported.
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3. Termination of Directorship.
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(a) If the Optionee's membership on the Board of Directors of the
Company (the "Directorship") terminates by reason of his death or disability,
this Stock Option may thereafter be exercised, to the extent it was exercisable
on the date of such termination, until the earlier of (i) one year from the date
of such termination or (ii) the Expiration Date.
(b) If the Optionee's Directorship terminates by reason of his failure
to be re-elected to his position as a member of the Board of Directors of the
Company, this Stock Option may thereafter be exercised until the earlier of (i)
two years from the date of the annual meeting in which the Optionee failed to be
re-elected as a member of the Board of Directors of the Company or (ii) the
Expiration Date.
(c) If the Optionee's Directorship terminates by reason of cause, this
Stock Option shall lapse immediately upon the effective date of such termination
and shall not be exercisable at any time thereafter. Only the following shall
constitute "cause" for termination: (i) deliberate dishonesty of the Optionee
with respect to the Company or any subsidiary or affiliate thereof;
(ii) conviction of the Optionee of a crime involving moral turpitude;
(iii) material failure to perform a substantial portion of the Optionee's duties
and responsibilities with respect to the Company or any subsidiary or affiliate
thereof, which failure continues for more than thirty (30) days after written
notice given to the Optionee pursuant to a two-thirds vote of all of the members
of the Board of Directors of the Company, such vote to set forth in reasonable
detail the nature of such failure; or (iv) gross or willful misconduct of the
Optionee with respect to the Company or any subsidiary or affiliate.
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(d) If the Optionee's Directorship is terminated for any reason other
than death, disability, failure to be re-elected as a Director of the Company or
cause, this Stock Option may thereafter be exercised, to the extent it was
exercisable on the date of such termination, until the earlier of (i) ninety
(90) days following such termination or (ii) the Expiration Date. (e) The Board
of Directors (exclusive of the Optionee) shall have sole discretion to determine
in good faith the reason for the termination of the Optionee's Directorship with
the Company.
4. Transferability. This Agreement is personal to the Optionee and is
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not transferable by the Optionee in any manner other than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code, or Title I of the Employee Retirement Income Security Act,
as amended, or the rules thereunder; provided, however, that the designation of
a beneficiary by the Optionee does not constitute a transfer. Options may be
exercised during the Optionee's lifetime only by the Optionee.
5. Restrictions on Issuance of Option Shares. The issuance of Option
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Shares upon exercise thereof shall be subject to compliance with all of the
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board of Directors of
the Company.
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6. Adjustment Upon Changes in Capitalization.
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(a) The shares of stock covered by this Stock Option are shares of the
Common Stock of the Company. If the shares of the Company's Common Stock as a
whole are increased, decreased, changed into or exchanged for a different number
or kind of shares or securities of the Company, whether through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares, and the per share exercise price
of shares subject to any unexercised portion of this Stock Option. In the event
of any such adjustment in this Stock Option, the Optionee thereafter shall have
the right to purchase the number of shares under this Stock Option at the per
share price, as so adjusted, which the Optionee could purchase at the total
purchase price applicable to this Stock Option immediately prior to such
adjustment. Adjustments under this Paragraph 6 shall be made by the Board of
Directors (exclusive of the Optionee) of the Company. No fractional shares of
Common Stock shall be issued on account of any adjustment specified above.
7. Effect of Certain Transactions. In the case of (a) the dissolution or
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liquidation of the Company, (b) a merger, reorganization or consolidation in
which the Company is acquired by another person or in which the Company is not
the surviving corporation, or (c) the sale of all or substantially all of the
assets of the Company to another corporation, this Stock Option shall terminate
on the effective date of such dissolution, liquidation, merger, reorganization,
consolidation or sale, unless provision is made in such transaction for the
assumption of this Stock Option or the substitution for this Stock Option of a
new Stock Option of the successor
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employer corporation or a parent or subsidiary thereof, with appropriate
adjustment as to the number and kind of shares and the per share exercise price,
as provided in Paragraph 6. In the event of such a termination, the Optionee
will receive written notice thereof at least twenty (20) days prior to the
effective date of such transaction.
8. Tax Withholding.
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(a) The Optionee, no later than the date as of which the value of any
Common Stock first becomes includable in the gross income of the Optionee for
federal income tax purposes, shall pay to the Company, or make arrangements
satisfactory to the Board of Directors regarding payment of any federal, state
or local taxes of any kind required by law to be withheld with respect to such
income. The Company shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
Optionee.
(b) The Optionee may elect to have such tax withholding obligation
satisfied, in whole or in part, by:
(i) authorizing the Company to withhold from shares of Common
Stock to be issued pursuant to the Stock Option a number of shares with an
aggregate fair market value that would satisfy the withholding amount due, or
(ii) transferring to the Company shares of Common Stock owned by
the Optionee with an aggregate fair market value that would satisfy the
withholding amount due. While the Optionee is a director or officer of the
Company within the meaning of Section 16(b) of the 1934 Act, the following
additional restrictions shall apply: (1) the election to satisfy tax withholding
obligations relating to the Stock Option in the manner permitted by this
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Section 8(b)(ii) shall be made either (A) during the period beginning on the
third business day following the date of release of quarterly or annual summary
statements of sales and earnings of the Company and ending on the twelfth
business day following such date, or (B) irrevocably at least six months prior
to the date as of which the receipt of such Common Stock first becomes a taxable
event for federal income tax purposes; and (2) such election shall not be made
within six months of the date of grant of the option.
9. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by the Optionee and a duly authorized representative
of the Company.
10. Governing Law. This Agreement shall be governed by the laws of the
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State of Delaware, except to the extent that such law is preempted by federal
law.
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11. Miscellaneous. Notice hereunder shall be mailed or delivered to the
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Company at its principal place of business, and shall be mailed or delivered to
the Optionee at the address set forth below, or in either case at such other
address as one party may subsequently furnish to the other party in writing.
LITTLE SWITZERLAND, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Director
By: /s/ Xxxx X. Xxxxx, Xx.
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Name: Xxxx X. Xxxxx, Xx.
Title: Director
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Director
Dated: January 21, 1999 By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Director
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The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.
/s/ C. Xxxxxxx Xxxxx
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C. Xxxxxxx Xxxxx
Optionee's Address:
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St. Xxxxxx, U.S.V.I.
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