EXHIBIT 4.2
STOCK OPTION AGREEMENT
AGREEMENT, made as of this _____ day of __________, by and between
NBTY, Inc., a corporation having its principal executive offices at 00
Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 ("Grantor") and
____________________________________, residing at _________________ [address]
("Optionee").
W I T N E S S E T H:
WHEREAS, Optionee is presently employed by Grantor; and
WHEREAS, Grantor is desirous of increasing the incentive of Optionee to
exert his utmost efforts to improve the business and increase the assets of
the Grantor.
NOW, THEREFORE, in consideration of the promises of the Optionee to
remain in the continuous service of the Grantor or any of its subsidiaries,
and for other good and valuable consideration, the grantor hereby grants the
Optionee options to purchase Common Stock of the Grantor upon the following
terms and conditions:
1. OPTIONS. Pursuant to its Year 2000 Incentive Stock Option Plan,
the Grantor hereby grants to the Optionee incentive stock options ("Incentive
Stock Options"), as provided in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), to purchase, at any time commencing as of the
date hereof, and terminating as of 5:00 P.M. New York City time, on
________________________ ("Termination Date"), up to _____________________
fully paid and non-assessable shares of the Common Stock of the Grantor, par
value $.008 per share.
2. PURCHASE PRICE. The purchase price ("Purchase Price") shall be
________ per share. The Grantor shall pay all original issue or transfer
taxes on the exercise of the Incentive Stock Options and all other fees and
expenses necessarily incurred by the Grantor in connection therewith.
3. EXERCISE OF OPTION.
(a) The Optionee shall notify the Grantor by registered or
certified mail, return receipt requested, addressed to its principal
office (Attn: Chief Financial Officer), as to the number of shares of
Common Stock which Optionee desires to purchase pursuant to the options
herein granted, which notice shall be accompanied by payment (by
bankcheck, certified check or by delivery of shares of the Grantor's
Common Stock having a fair market value equal to the purchase price) of
the option price therefor as specified in Paragraph 2 above. As soon as
practicable thereafter, the Grantor shall cause to be delivered to the
Optionee certificates issued in the Optionee's name evidencing the
shares of Common Stock purchased by the Optionee.
(b) If the aggregate fair market value of all the stock with
respect to which Incentive Stock Options are exercisable for the first
time by the Optionee during any calendar year and all Incentive Stock
Option plans of the Grantor, any predecessor of the Grantor, its parent
or subsidiaries, exceeds $100,000.00, the grant of the Incentive Stock
Options hereunder shall not, to the extent of such excess, be deemed a
grant of Incentive Stock Options but will instead be deemed the grant
of Non-Qualified Stock Options under the Plan. For purpose of this
paragraph, the fair market value of the stock with respect to which an
Incentive Stock Option is exercisable shall be the value of such stock
at the time that specific option is granted as provided for in Section
422(c)(7) of the Code.
(c) Subject to paragraph 4 below, the Incentive Stock Options
granted hereunder may be exercised by the Optionee as follows: options
corresponding to twenty-five percent (25%) of the share are exercisable
at any time after the first anniversary date hereof and through the
Termination Date; options corresponding to the next twenty-five percent
(25%) of the shares are exercisable at any time after the third
anniversary date hereof and through the Termination Date; and options
corresponding to the last twenty-five percent (25%) are exercisable at
any time after the fourth anniversary date hereof and through the
Termination Date.
4. OPTION CONDITIONED ON CONTINUED EMPLOYMENT.
(a) If the employment of the Optionee shall be terminated
voluntarily by the Optionee or for cause, the Incentive Stock Options
granted to the Optionee hereunder shall expire within thirty (30) days
after such termination. If such employment shall terminate otherwise
than by reason of death, disability, voluntarily by the Optionee or for
cause, such options may be exercised at any time within three (3)
months after such termination, subject to the provisions of
subparagraph (d) of this Paragraph 4. For the purposes of this
subparagraph (a), the retirement of an individual either pursuant to a
pension or retirement plan adopted by the Grantor or at the normal
retirement date prescribed from time to time by the Grantor shall be
deemed to be a termination of such Optionee's employment other than
voluntarily by the Optionee or for cause.
(b) If the Optionee dies (i) while employed by the Grantor or a
subsidiary or parent corporation, or (ii) within three (3) months after
the termination of Optionee's employment other than voluntarily by the
Optionee or for cause, such Incentive Stock Options may, subject to the
provisions of subparagraph (d) of this Paragraph 4, be exercised by a
legatee or legatees of such Incentive Stock Options under such
individual's last will or by his personal representatives or
distributees at any time within one year after his death.
(c) If the Optionee becomes disabled within the definition of
Section 22(e) of the Code while employed by the Grantor or a subsidiary
or parent corporation, such Incentive Stock Options may, subject to the
provisions of subparagraph (d) of this Paragraph 4, be exercised at any
time within one year after Optionee's termination of employment due to
the disability.
(d) Incentive Stock Options may not be exercised pursuant to
this Paragraph 4 except to the extent that the Optionee was entitled to
exercise the options at the time of termination of employment or death
pursuant to Paragraph 3, and in any event may not be exercised after
the original expiration date of the options.
5. DIVISIBILITY AND NON-ASSIGNABILITY OF THE OPTIONS.
(a) The Optionee may exercise the Incentive Stock Options herein
granted from time to time during the period of their effectiveness with
respect to any whole number of shares included therein.
(b) The Optionee may not give, grant, sell, exchange, transfer
legal title, pledge, assign or otherwise encumber or dispose of the
Incentive Stock Options herein granted or any interest therein,
otherwise than by will or the laws of descent and distribution, and the
Incentive Stock Options herein granted, or any of them, shall be
exercisable during the Optionee's lifetime only by the Optionee.
6. STOCK AS INVESTMENT. By accepting the Incentive Stock Options
herein granted, the Optionee agrees for himself, his heirs and legatees that
any and all shares of Common Stock purchased hereunder shall be acquired for
investment purposes only and not for sale or distribution, and upon the
issuance of any or all of the shares of Common Stock issuable under the
options granted hereunder, the Optionee, or his heirs or legatees receiving
such shares of Common Stock, shall deliver to the Grantor a representation in
writing, that such shares of Common Stock are being acquired in good faith
for investment purposes only and not for sale or distribution. Grantor may
place a "stop transfer" order with respect to such shares of Common Stock
with its transfer agent and place an appropriate restrictive legend on the
stock certificate evidencing such shares of Common Stock.
7. RESTRICTION ON ISSUANCE OF SHARES. The Grantor shall not be
required to issue or deliver any certificate for shares of Common Stock
purchased upon the exercise of any Incentive Stock Options granted hereunder
unless (a) the issuance of such shares of Common Stock has been registered
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, or counsel to the Grantor shall have given an opinion that such
registration is not required; (b) approval, to the extent required, shall
have been obtained from any state regulatory body having jurisdiction
thereof; and (c) permission for the listing of such shares of Common Stock,
if required, shall have been given by any national securities exchange on
which the shares of Common Stock of the Grantor are at the time of issuance
listed.
8. NOTIFICATION OF TRANSFER FOR TAX PURPOSES. In the event that the
Optionee disposes (whether by sale, exchange, gift or any other transfer) of
any shares of Common Stock acquired pursuant to the exercise of the Incentive
Stock Options to the Optionee hereunder or within one year of the purchase of
the shares of Common Stock by the Optionee upon the exercise of the Incentive
Stock Options, the Optionee will notify the Grantor in writing, within thirty
(30) days after such disposition.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Common Stock of
the Grantor by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations, exchanges of
shares, reorganizations or liquidations, the number of shares of Common
Stock as to which the options may be exercised shall be correspondingly
adjusted by the grantor, and the Purchase price shall be adjusted so
that the product of the Purchase Price immediately after such event
multiplied by the number of options subject to this Agreement
immediately after such event shall be equal to the product of the
Purchase Price multiplied by the number of shares subject to this
Agreement immediately prior to the occurrence of such event. No
adjustment shall be made with respect to stock dividends or splits
which do not exceed five percent (5%) in any fiscal year, cash
dividends or the issuance to shareholders of the Grantor of rights to
subscribe for additional shares of Common Stock or other securities.
Anything to the contrary contained herein notwithstanding, the Board of
Directors of the Grantor shall have the discretionary power to take any
action necessary or appropriate to prevent these options from being
disqualified as "Incentive Stock Options" under the United States
Income Tax laws then in effect.
(b) Any adjustment in the number of shares of Common Stock shall
apply proportionately to only the unexercised portion of the Incentive
Stock Options granted hereunder. If fractions of a share of Common
Stock would result from any such adjustment, the adjustment shall be
revised to the next higher whole number of shares of Common Stock so
long as such increase does not result in the holder of the options
being deemed to own more than five percent (5%) of the total combined
voting power or value of all classes of shares of capital stock of the
Grantor or subsidiaries.
10. NO RIGHTS IN OPTION STOCK. Optionee shall have no rights as a
shareholder in respect of shares of Common Stock as to which the options
granted hereunder shall not have been exercised and payment made as herein
provided.
11. EFFECT UPON EMPLOYMENT. This Agreement does not give the Optionee
any right to continued employment by the Grantor.
12. BINDING EFFECT. Except as herein otherwise expressly provided,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their legal representatives and assigns.
13. AGREEMENT SUBJECT TO PLAN. Notwithstanding anything contained
herein to the contrary, this Agreement is subject to, and shall be construed
in accordance with, the terms of the Grantor's 1990 Employee Stock Option
Plan, and in the event of any inconsistency between the terms hereof and the
terms of such Plan, the terms of the Plan shall govern.
14. MISCELLANEOUS. This Agreement shall be construed under the laws
of the State of New York, without application to the principles of conflicts
of law. Headings have been included herein for convenience of reference only,
and shall not be deemed a part of this Agreement.
NBTY, INC.
By:__________________________________
Name:
Title:
Accepted and Agreed To:
__________________________________
