NO. 98-70
▇▇▇ Stores Corporation
NONQUALIFIED
EXECUTIVE STOCK OPTION
▇▇▇ Stores Corporation (the "Company") hereby grants to
▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Optionee"), effective October 14, 1998 (the
"Effective Date"), as a matter of separate inducement and agreement
in connection with Optionee's employment by the Company, and not in
lieu of any salary or other compensation for his services, an
option to purchase a maximum of 500,000 shares of its Common Stock,
One Cent ($.01) par value (the "Shares"), at a price of $9.9375 per
share, subject to the following terms and conditions:
1. Time of Exercise. This option may not be exercised prior
to the first anniversary of the Effective Date. On or after
December 31, 2000, this option shall be exercisable only up to a
maximum of one-third (1/3) of the total number of Shares originally
subject to the option, or 166,666 shares. On or after December 31,
2001, this option shall be exercisable only up to a maximum of two-thirds (2/3)
of the total number of Shares originally subject to
the option, or 333,333 Shares. On or after December 31, 2002, the
option shall be exercisable in full.
Notwithstanding anything to the contrary herein contained, so
long as the Optionee shall be employed by the Company or any of its
subsidiaries, this option may not be exercised if, in the opinion
of counsel for the Company, the issuance of the Shares pursuant
thereto, either alone or in combination with the issuance of other
securities by the Company, would constitute a violation of
applicable federal or state securities laws or regulations or
orders thereunder. In the event this option may not otherwise be
exercised by reason of the foregoing sentence, the Company shall
use its best efforts to register said shares with the Securities
and Exchange Commission on Form S-8 (or successor form) as soon as
practicable after said form may be used by the Company and,
concurrently therewith, to take such steps as may be necessary to
comply with applicable state securities laws in connection with
such issuance.
2. Term of Option. This option shall expire on the tenth
(10th) anniversary of the effective date of this Agreement.
3. Methods of Exercise. This option shall be exercisable by
a written notice in the form attached hereto as Exhibit "A", which
specifies the number of Shares to be purchased. Upon receipt of
payment acceptable to the Company for the Shares, the Company will
thereafter deliver or cause to be delivered to the Optionee (or any
other individual or individuals exercising this option if permitted
under the terms of this option) at the office of the Company, a
certificate or certificates for the number of Shares with respect
to which this option is being exercised, registered in the name of
the Optionee or other individual or individuals exercising the
option (if permitted under this option), provided, however, that if
any law or regulation or order of the Securities and Exchange
Commission or other body having jurisdiction in the premises shall
require the Company or Optionee (or other individual or individuals
exercising this option if permitted under the terms of this option)
to take any action in connection with the Shares then being
purchased, the delivery of the certificate or certificates for such
shares shall be delayed for the period necessary to take and
complete such action.
4. Purchase for Investment. This option is granted on the
condition that the purchase of Shares of stock hereunder shall be
for the account of the Optionee (or other individuals or individu-
als exercising this option) for investment purposes and not with a
view to resale or distribution, except that such condition shall be
inoperative if the offering of Shares subject to the option is
registered under the Securities Act of 1933, as amended, or if in
the opinion of counsel for the Company such shares may be resold
without registration. At the time of any exercise of the option,
the Optionee (or other individual or individuals exercising this
option) will execute such further agreements as the Company may
require to implement the foregoing condition and to acknowledge the
Optionee's (or such other individual's) familiarity with restric-
tions on the resale of the shares under applicable securities laws.
5. Non-Transferability. This option may not be sold,
pledged, hypothecated, or transferred by the Optionee, except as
otherwise provided in Paragraph 6(iii) herein.
6. Termination of Options. This Agreement, and the options
granted hereunder, shall terminate and may no longer be exercised
if the Optionee ceases for any reason to be an employee of the
Company, or any of its subsidiaries, except that:
(i) If the Optionee's employment shall have been
terminated for any reason other than cause, disability or death, he
may at any time within a period of one hundred eighty (180) days
after such termination of employment exercise his option to the
extent permitted in Paragraph 1 of this Agreement on the date of
termination of his employment; and/or
(ii) If the Optionee's employment shall have been
terminated because of disability, he may at any time within a
period of one (1) year after such termination of employment
exercise his option to the extent permitted in Paragraph 1 of this
Agreement on the date of termination of his employment; and/or
(iii) If the Optionee dies at a time when the option
was exercisable by him, then his estate, personal representative or
beneficiary to whom it has been transferred may, within six (6)
months following the death, exercise the option to the extent
permitted in Paragraph 1 of this Agreement at the time of Op-
tionee's death, provided, however, that no option may be exercised
to any extent by anyone after the date of expiration of the option.
7. Rights as Shareholder. The Optionee shall have no rights
as a shareholder with respect to any Shares covered by this option
until the date of issuance of a stock certificate to him for such
Shares.
8. Stock Dividends; Splits; Stock Combination; Recapitaliza-
tion. Appropriate adjustment shall be made in the maximum number
of Shares of Common Stock subject to this option and in the number,
kind, and option price of Shares covered by outstanding options
granted hereunder to give effect to any stock dividends or other
distribution, stock splits, stock combinations, recapitalizations
and other similar changes in the capital structure of the Company
after the Effective Date.
9. Merger; Sale of Assets; Dissolution. In the event of a
change of the Common Stock resulting from a merger or similar
reorganization as to which the Company is the surviving corpora-
tion, the number and kind of Shares which thereafter may be subject
to options granted hereunder and the price per share thereof shall
be appropriately adjusted in such a manner as the Board of
Directors of the Company may deem equitable to prevent substantial
dilution or enlargement of the rights available or granted
hereunder. If the Company at any time should elect to dissolve,
sell all or substantially all of its assets, undergo a reorganiza-
tion, or merge or consolidate with any corporation and the Company
is not the surviving corporation, then (unless in the case of a
reorganization, merger, or consolidation, the surviving corporation
assumes the optionees' rights hereunder or issues substantially
equivalent substitute rights in place hereof) the Optionee shall be
notified by the Company of his right to exercise all outstanding
options prior to any such dissolution, sale, reorganization, merger
or consolidation. The failure to exercise such outstanding options
within thirty (30) days of such notification shall cause the option
hereunder to be terminated.
10. Effect of the Option on Employment Relationship. This
option shall in no way, now or hereafter, reduce, enlarge or modify
the employment relationship between the Company and the Optionee.
Nothing contained herein shall be construed as conferring upon the
Optionee any right to continue in the employ of the Company.
11. General. This option shall be governed by and be
construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the Company has caused this Stock Option
to be executed this 14th day of October, 1998.
▇▇▇ Stores Corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT A
WRITTEN NOTICE OF EXERCISE OF
STOCK OPTION
▇▇▇ Stores Corporation
The undersigned hereby exercises his option granted to him
pursuant to the 1998 Nonqualified Executive Stock Option No. 98-70,
subject to and in accordance with the terms and conditions thereof,
to purchase ________________ shares of the Common Stock of ▇▇▇
Stores Corporation, at a price of $9.9375 per share, said number of
shares not to exceed the number permitted in Paragraph 1 of the
Option. The undersigned hereby makes payment to ▇▇▇ Stores
Corporation of the purchase price in full. Kindly issue all shares
to the undersigned and deliver to the undersigned at the address
stated below.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Social Security Number: ###-##-####
Signature: _________________________________
Purchase Price Attached: _______________________
Dated: _________________________
