NONQUALIFIED STOCK OPTION AGREEMENT PURSUANT TO THE RUE21, INC. 2009 OMNIBUS INCENTIVE PLAN
Exhibit 10.13
* * * * *
Participant:
Grant Date:
Per Share Exercise Price: $
Number of Shares subject to this Option:
* * * * *
THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated as of the
Grant Date specified above, is entered into by and between rue21, Inc., a company organized in the
State of Delaware (the “Company”), and the Participant specified above, pursuant to the
rue21, Inc. 2009 Omnibus Incentive Plan, as in effect and as amended from time to time (the
“Plan”), which is administered by the Committee; and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the
Company to grant the non-qualified stock option provided for herein to the Participant.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth
and for other good and valuable consideration, the parties hereto hereby mutually covenant and
agree as follows:
1. Incorporation By Reference; Plan Document Receipt. This Agreement is subject in
all respects to the terms and provisions of the Plan (including, without limitation, any amendments
thereto adopted at any time and from time to time unless such amendments are expressly intended not
to apply to the award provided hereunder), all of which terms and provisions are made a part of and
incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized
term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.
The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has
read the Plan carefully and fully understands its content. In the event of any conflict between
the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. No part
of the Option granted hereby is intended to qualify as an “incentive stock option” under Section
422 of the Code.
2. Grant of Option. The Company hereby grants to the Participant, as of the Grant
Date specified above, a non-qualified stock option (this “Option”) to acquire from the
Company at the Per Share Exercise Price specified above, the aggregate number of shares of
Common Stock specified above (the “Option Shares”). Except as otherwise provided by the
Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or
is intended to provide, the Participant with any protection against potential future dilution of
the Participant’s interest in the Company for any reason. The Participant shall have no rights as
a stockholder with respect to any shares of Common Stock covered by this Option unless and until
the Participant has become the holder of record of the shares, and no adjustments shall be made for
dividends in cash or other property, distributions or other rights in respect of any such shares,
except as otherwise specifically provided for in the Plan or this Agreement.
3. Vesting and Exercise.
(a) Vesting. The Options subject to this grant shall become vested as to [25% on each
of the first four anniversaries of the Grant Date specified above], provided the Participant is
then employed by the Company and/or one of its Subsidiaries or Affiliates. There shall be no
proportionate or partial vesting in the periods prior to each vesting date and all vesting shall
occur only on the appropriate vesting date, subject to the Participant’s continued service with the
Company or any of its Subsidiaries on each applicable vesting date.1
(b) Certain Terminations. Any unvested portion of this Option shall immediately
become vested upon a Termination due to [(i) the Participant’s death or (ii) the Participant’s
Disability.]2
(c) [Change in Control. Any unvested portion of this Option shall immediately become
vested upon a Change in Control; provided the Participant is continuously employed by the Company
or its Subsidiaries through such date.]
(d) Effect of Detrimental Activity. The provisions of Section 6.4(c) of the Plan
regarding Detrimental Activity shall apply to the Option.
(e) Expiration. Unless earlier terminated in accordance with the terms and provisions
of the Plan and/or this Agreement, all portions of this Option (whether vested or not vested) shall
expire and shall no longer be exercisable after the expiration of ten (10) years from the Grant
Date.
4. Termination. Subject to the terms of the Plan and this Agreement, the Options, to
the extent vested at the time of the Participant’s Termination, shall remain exercisable as
follows:
(a) Termination due to Death or Disability. In the event of the Participant’s
Termination by reason of death or Disability, the vested portion of this Option shall remain
exercisable until the earlier of (i) one year from the date of such Termination, and (ii) the
expiration of the stated term of the Option pursuant to Section 3 hereof.
| 1 | Company to confirm whether to add restrictive covenants (e.g., non-competition covenant). | |
| 2 | The Plan contains a provision regarding the treatment of Options upon a termination of employment but permits the Award Agreement to treat Options differently than under the Plan. |
2
(b) Termination Without Cause. In the event of the Participant’s involuntary
Termination by the Company without Cause, the vested portion of this Option shall remain
exercisable until the earlier of (i) ninety (90) days from the date of such Termination, and (ii)
the expiration of the stated term of the Option pursuant to Section 3 hereof.
(c) Voluntary Termination. In the event of the Participant’s voluntary Termination,
the vested portion of this Option shall remain exercisable until the earlier of (i) thirty (30)
days from the date of such Termination, and (ii) the expiration of the stated term of the Option
pursuant to Section 3 hereof.
(d) Termination for Cause. In the event of the Participant’s Termination by the
Company for Cause, all Options granted hereunder (whether or not vested) shall terminate and expire
upon such Termination.
(e) Treatment of Unvested Options upon Termination. Any portion of this Option that
is not vested as of the date of the Participant’s Termination for any reason shall terminate and
expire as of the date of such Termination.
5. Method of Exercise and Payment. Subject to Section 8, to the extent that the
Option has become vested and exercisable with respect to a number of shares of Common Stock as
provided herein, the Option may thereafter be exercised by the Participant, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided herein and in
accordance with Sections 6.4(c) and 6.4(d) of the Plan, including, without limitation, by the
filing of any written form of exercise notice as may be required by the Committee and payment in
full of the Per Share Exercise Price multiplied by the number of shares of Common Stock underlying
the portion of the Option exercised.
6. Non-transferability. The Options, and any rights and interests with respect
thereto, issued under this Agreement and the Plan shall not, prior to vesting, be sold, exchanged,
transferred, assigned or otherwise disposed of in any way by the Participant (or any
beneficiary(ies) of the Participant), other than by testamentary disposition by the Participant or
the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its
sole discretion, permit the Options to be Transferred to a Family Member for no value, provided
that such Transfer shall only be valid upon execution of a written instrument in form and substance
acceptable to the Committee in its sole discretion evidencing such Transfer and the transferee’s
acceptance thereof signed by the Participant and the transferee, and provided, further, that the
Options may not be subsequently Transferred otherwise than by will or by the laws of descent and
distribution or to another Family Member (as permitted by the Committee in its sole discretion) in
accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of
the Plan and this Agreement. Any attempt to sell, exchange, transfer, assign, pledge, encumber or
otherwise dispose of or hypothecate in any way the Options, or the levy of any execution,
attachment or similar legal process upon the Options, contrary to the terms and provisions of this
Agreement and/or the Plan shall be null and void and without legal force or effect.
3
7. Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by, and construed in accordance with, the laws
of the State of Delaware, without regard to the choice of law principles thereof.
8. Withholding of Tax. The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any
federal, state, local and foreign taxes of any kind (including, but not limited to, the
Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary
to be withheld or remitted to comply with the Code and/or any other applicable law, rule or
regulation with respect to the Option and, if the Participant fails to do so, the Company may
otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued
pursuant to this Agreement. Any statutorily required withholding obligation with regard to the
Participant may be satisfied by reducing the amount of cash or shares of Common Stock otherwise
deliverable upon exercise of the Option.
9. Entire Agreement; Amendment. This Agreement, together with the Plan, contains the
entire agreement between the parties hereto with respect to the subject matter contained herein,
and supersedes all prior agreements or prior understandings, whether written or oral, between the
parties relating to such subject matter. The Committee shall have the right, in its sole
discretion, to modify or amend this Agreement from time to time in accordance with and as provided
in the Plan. This Agreement may also be modified or amended by a writing signed by both the
Company and the Participant. The Company shall give written notice to the Participant of any such
modification or amendment of this Agreement as soon as practicable after the adoption thereof.
10. Notices. Any notice hereunder by the Participant shall be given to the Company in
writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel
of the Company. Any notice hereunder by the Company shall be given to the Participant in writing
and such notice shall be deemed duly given only upon receipt thereof at such address as the
Participant may have on file with the Company.
11. No Right to Employment. Any questions as to whether and when there has been a
Termination and the cause of such Termination shall be determined in the sole discretion of the
Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the
Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at
any time, for any reason and with or without cause.
12. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously
consents to the transmission by the Company (or any Subsidiary) of any personal data information
related to the Option awarded under this Agreement for legitimate business purposes (including,
without limitation, the administration of the Plan). This authorization and consent is freely
given by the Participant.
13. Compliance with Laws. The issuance of this Option (and the Shares upon exercise
of this Option) pursuant to this Agreement shall be subject to, and shall comply with, any
applicable requirements of any foreign and U.S. federal and state securities laws, rules and
regulations (including, without limitation, the provisions of the Securities Act of 1933, as
4
amended, the 1934 Act and in each case any respective rules and regulations promulgated
thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated
to issue this Option or any of the Shares pursuant to this Agreement if any such issuance would
violate any such requirements.
14. Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the
Option is intended to be exempt from the applicable requirements of Section 409A of the Code and
shall be limited, construed and interpreted in accordance with such intent.
15. Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be
binding upon, and be enforceable by the Company and its successors and assigns. The Participant
shall not assign (except as provided by Section 6 hereof) any part of this Agreement without the
prior express written consent of the Company.
16. Headings. The titles and headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be a part of this
Agreement.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one and the same
instrument.
18. Further Assurances. Each party hereto shall do and perform (or shall cause to be
done and performed) all such further acts and shall execute and deliver all such other agreements,
certificates, instruments and documents as either party hereto reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the Plan and the
consummation of the transactions contemplated thereunder.
19. Severability. The invalidity or unenforceability of any provisions of this
Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any
provision of this Agreement in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
20. Acquired Rights. The Participant acknowledges and agrees that: (a) the Company
may terminate or amend the Plan at any time; (b) the award of Options made under this Agreement is
completely independent of any other award or grant and is made at the sole discretion of the
Company; (c) no past grants or awards (including, without limitation, the Options awarded
hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d)
any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and
shall not be considered as part of such salary in the event of severance, redundancy or
resignation.
[Remainder of Page Intentionally Left Blank]
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| RUE21, INC. | ||||||||
| By: |
||||||||
| Name: | ||||||||
| Title: | ||||||||
| PARTICIPANT | ||||||||
| Name: | ||||||||
| Social Security Number: | ||||||||
6
