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EXHIBIT 10.24
WHITEHALL JEWELLERS, INC.
(F/K/A/ MARKS BROS. JEWELERS, INC.)
1998 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
Whitehall Jewellers, Inc. (f/k/a/ Marks Bros. Jewelers, Inc.), a Delaware
corporation (the "Company"), hereby grants to"Optionee"(the "Optionee") as
of"date", (the "Option Date"), pursuant to the provisions of the Whitehall
Jewellers, Inc. 1998 Non-Employee Director Stock Option Plan (the "Plan"), a
non-qualified option to purchase from the Company (the "Option") "of shares"
shares of its Common Stock, $.001 par value ("Stock"), at the price of "price"
per share upon and subject to the terms and conditions set forth below.
Capitalized terms not defined herein shall have the meanings specified in the
Plan.
1. Option Subject to Acceptance of Agreement. The Option shall be null and
void unless the Optionee shall accept this Agreement by executing it in the
space provided below and returning such original execution copy to the Company.
2. Time and Manner of Exercise of Option.
2.1. Maximum Term of Option. In no event may the Option be exercised, in
whole or in part, after the tenth anniversary of the Option Date (the
"Expiration Date").
2.2. Exercise of Option. (a)The Option shall not be exercisable until the
first day of the fiscal quarter (February 1 - April 30, May 1 - July 31, August
1 - October 31, November 1 - January 31) following the fiscal quarter that
includes the Option Date. Thereafter, the Option may be exercised for all of the
shares of Stock subject to the Option. An exercisable option, or portion
thereof, may be exercised in whole or in part only with respect to whole shares
of Stock.
(b) If the Optionee ceases to be a director of the Company for any reason
other than death, the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee's ceasing to be a director and
may thereafter be exercised by the Optionee (or the Optionee's Legal
Representative or Permitted Transferees) until the earliest to occur of (i) the
date which is three months after the effective date of the Optionee's ceasing to
be a director and (ii) the Expiration Date.
(c) If the Optionee ceases to be a director of the Company by reason of
death, the Option shall be fully exercisable and may thereafter be exercised by
the Optionee's Legal Representative or Permitted Transferees, as the case may
be, until the earliest to occur of (i) the date which is one year after the date
of death and (ii) the Expiration Date.
(d) If the Optionee dies during the three-month period following the
Optionee's ceasing to be a director of the Company for any reason other than
death, the Option shall be exercisable only to the extent that it is exercisable
on the date of the Optionee's death and may thereafter be exercised by the
Optionee's Legal Representative or Permitted Transferees, as the case may be,
until the earliest to occur of (i)the date one year after the date of death and
(ii) the Expiration Date.
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2.3 Method of Exercise. Subject to the limitations set forth in this
Agreement, the Option may be exercised in whole or in part by the Optionee (1)
by giving written notice to the Company specifying the number of whole shares of
Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (i) in
cash, (ii) by delivery of previously owned whole shares of Stock (which the
Optionee has held for at least six months prior to the delivery of such shares
or which the Optionee purchased on the open market and for which the Optionee
has good title, free and clear of all liens and encumbrances) having a Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
in cash by a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise or (iv) a combination of (i) and
(ii), and (2) by executing such documents as the Company may reasonably request.
The Committee shall have sole discretion to disapprove of an election pursuant
to any of clauses (ii)-(iv) and the Company may require that the method of
making such payment be in compliance with Section 16 of the Exchange Act and the
rules and regulations thereunder. Any fraction of a share of Stock which would
be required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Optionee. No certificate representing a
share of Stock shall be delivered until the full purchase price therefor has
been paid.
2.4 Termination of Option. (a) In no event may the Option be exercised
after it terminates as set forth in this Section 2.4. The Option shall
terminate, to the extent not exercised pursuant to Section 2.3 or earlier
terminated pursuant to Section 2.2, on the Expiration Date.
(b) In the event that rights to purchase all or a portion of the shares of
Stock subject to the Option expire or are exercised, canceled or forfeited, the
Optionee shall, upon the Company's request, promptly return this Agreement to
the Company for full or partial cancellation, as the case may be. Such
cancellation shall be effective regardless of whether the Optionee returns this
Agreement. If the Optionee continues to have rights to purchase shares of Stock
hereunder, the Company shall, within 10 days of the Optionee's delivery of this
Agreement to the Company, either (i) mark this Agreement to indicate the extent
to which the Option has expired or been exercised, canceled or forfeited or (ii)
issue to the Optionee a substitute option agreement applicable to such rights,
which agreement shall otherwise be at least as favorable to the Optionee as this
Agreement in form and substance.
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3. Additional Terms and Conditions of Option.
3.1. Nontransferability of Option. The Option may not be transferred by the
Optionee other than (i) by will or the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company or (ii)
as otherwise permitted under Rule 16b-3 under the Exchange Act. Except to the
extent permitted by the foregoing sentence, during the Optionee's lifetime the
Option is exercisable only by the Optionee or the Optionee's Legal
Representative. Except to the extent permitted by the foregoing, the Option may
not be sold, transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or be subject
to execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the
Option, the Option and all rights hereunder shall immediately become null and
void.
3.2. Investment Representation. The Optionee hereby represents and
covenants that (a) any share of Stock purchased upon exercise of the Option will
be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), unless such purchase has been registered under the Securities Act and any
applicable state securities laws; (b) any subsequent sale of any such shares
shall be made either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, the Optionee shall submit a written
statement, in form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of purchase of any shares
hereunder or (y) is true and correct as of the date of any sale of any such
shares, as applicable. As a further condition precedent to any exercise of the
Option, the Optionee shall comply with all regulations and requirements of any
regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute any documents
which the Board or the Committee shall in its reasonable judgment deem necessary
or advisable to comply with the Securities Act, applicable state securities laws
or the regulations or requirements of any such regulatory authority.
3.3. Adjustment. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Stock other than a regular cash
dividend, the number and class of securities subject to the Option and the
purchase price per security shall be appropriately adjusted by the Committee
(such adjustment to be made reasonably and in good faith by the Committee)
without an increase in the aggregate purchase price. If any adjustment would
result in a fractional security being subject to the Option, such fractional
security shall be disregarded.
3.4. Compliance with Applicable Law. The Option is subject to the condition
that if the listing, registration or qualification of the shares subject to the
Option upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the purchase or delivery of
shares hereunder, the Option may not be exercised, in whole or in part, unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained, free of any conditions not approved by the Company (which
approval will not be
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unreasonably withheld). The Company agrees to use all reasonable efforts to
effect or obtain any such listing, registration, qualification, consent or
approval.
3.5. Delivery of Certificates. Upon the exercise of the Option, in whole or
in part, the Company shall deliver or cause to be delivered one or more
certificates representing the number of shares purchased against full payment
therefor. The Company shall pay all original issue or transfer taxes and all
fees and expenses incident to such delivery.
3.6. Option Confers No Rights as Stockholder. The Optionee shall not be
entitled to any privileges of ownership with respect to shares of Stock subject
to the Option unless and until purchased and delivered upon the exercise of the
Option, in whole or in part, and the Optionee becomes a stockholder of record
with respect to such delivered shares; and the Optionee shall not be considered
a stockholder of the Company with respect to any such shares not so purchased
and delivered.
3.7. Decisions of Board or Committee. The Board or the Committee shall have
the right to resolve all questions and make all determinations which may arise
in connection with the Option or its exercise (which rights the Committee shall
exercise reasonably and in good faith), and any interpretation, determination or
other action so made or taken by the Board or the Committee regarding the Plan
or this Agreement shall be final, binding and conclusive.
3.8. Company to Reserve Shares. The Company shall at all times prior to the
expiration or termination of the Option reserve and keep available, either in
its treasury or out of its authorized but unissued shares of Stock, the full
number of shares subject to the Option from time to time.
3.9. Agreement Subject to the Plan. This Agreement is subject to the
provisions of the Plan and shall be interpreted in accordance therewith. The
Optionee hereby acknowledges receipt of a copy of the Plan.
4. Miscellaneous Provisions.
4.1. Designation as Nonqualified Stock Option. The Option is hereby
designated as not constituting an "incentive stock option" within meaning of
section 422 of the Internal Revenue Code of 1986, as amended (the "Code"); this
Agreement shall be interpreted and treated consistently with such designation.
4.2. Meaning of Certain Terms. (a) References in this Agreement to sections
of the Code shall be deemed to refer to any successor section of the Code or any
successor internal revenue law.
(b) As used herein, the term "Legal Representative" shall include an
executor, administrator, legal representative, guardian or similar person and
the term "Permitted Transferee" shall include any transferee pursuant to a
transfer permitted under the Plan and Section 3.1 hereof.
4.3. Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person or persons
who shall, upon the
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death of the Optionee, acquire any rights hereunder in accordance with this
Agreement or the Plan.
4.4. Notices. All notices, requests or other communications provided for in
this Agreement shall be made, if to the Company, to Whitehall Jewellers, Inc.,
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx, 00000, Attention:
Secretary; and if to the Optionee, to "Optionee", "Address1", "City", "State",
"PostalCode". All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery to the party
entitled thereto, (b) by facsimile with confirmation of receipt, (c) by mailing
in the United States mails to the last known address of the party entitled
thereto or (d) by express courier service. The notice, request or other
communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
however, that if a notice, request or other communication is not received during
regular business hours, it shall be deemed to be received on the next succeeding
business day of the Company.
4.5. Governing Law. This Agreement, the Option and all determinations made
and actions taken pursuant hereto and thereto, to the extent not governed by the
laws of the United States, shall be governed by the laws of the State of
Delaware and construed in accordance therewith without giving effect to
principles of conflicts of laws.
4.6 Counterparts. This Agreement may be executed in two counterparts each
of which shall be deemed an original and both of which together shall constitute
one and the same instrument.
WHITEHALL JEWELLERS, INC.
By: __________________________
Accepted this _______ day of
________________, 2____.
___________________________
"Optionee"
