EXHIBIT 10.17
SUNGLASS HUT INTERNATIONAL, INC.
STOCK OPTION AGREEMENT
FOR
XXXXX X. XXXXXXXX
RECITALS
A. Pursuant to that certain Consulting Agreement, dated as of February
24, 1997, between Sunglass Hut International, Inc. (the "Company") and Xxxxxxxx
& Co., Inc. (the "Consultant"), the Consultant agreed to make available to the
Company the services of Xxxxx X. Xxxxxxxx (the "Optionee") on a substantially
full time basis.
B. Xxxx X. Chadsay resigned as the President and Chief Executive
Officer of the Company effective May 29, 1997.
C. The Board of Directors of the Company (the "Board"), together with
the Board's Compensation Committee, has determined that it would be in the best
interests of the Company to grant the Optionee an option to provide incentive
compensation for Optionee's agreement to serve as the Company's acting Chief
Executive Officer on a substantially full time basis.
AGREEMENT
1. GRANT OF OPTION. The Company hereby grants, as of June 11, 1997, to
Optionee an option (the "Option") to purchase up to 150,000 shares of the
Company's Common Stock, $.01 par value per share (the "Shares"), at an exercise
price per share equal to $6.5625. The Option shall be subject to the terms and
conditions set forth herein. The Option was issued pursuant to the Company's
1996 Executive Incentive Compensation Plan (the "Plan"), which is incorporated
herein for all purposes. The Option is a nonqualified stock option, and not an
Incentive Stock Option. The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all of the terms and conditions hereof and
thereof.
2. DEFINITIONS. Unless otherwise provided herein, terms used herein
that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. EXERCISE SCHEDULE. Except as otherwise provided in Sections 6 or 9
of this Agreement, or in the Plan, the Option shall be exercisable in whole or
in part and cumulatively according to the following schedule:
33-1/3% on or after June 11, 1998
33-1/3% on or after June 11, 1999
33-1/3% on or after June 11, 2000
provided, however, that the Option shall automatically become fully exercisable
in the event that (x) Optionee's service as acting Chief Executive Officer is
terminated by the Company for any reason other than "Cause" (as hereinafter
defined), or (y) the Optionee dies or suffers a disability while serving as
acting Chief Executive Officer. The Option shall terminate on, and in no event
shall the Option be exercisable after, June 11, 2007. "Cause" shall mean (i) the
willful failure or refusal of the Optionee to perform the duties or render the
services reasonably assigned to him from time to time by the Company's Board of
Directors (except during reasonable vacation periods or sick leave), (ii) the
Optionee's unsatisfactory performance of his duties as acting Chief Executive
Officer of the Company which continues after notice and a reasonable opportunity
to cure, (iii) the charging or indictment of the Optionee in connection with a
felony, (iv) the association, directly or indirectly, of the Optionee, for his
profit of financial benefit, with any person, firm, partnership, association,
entity or corporation that competes in any material way with the Company, (v)
the disclosing or using of any material trade secret or confidential information
of the Company at any time by the Optionee, except as required in connection
with his duties to the Company, or (vi) breach by the Optionee of his fiduciary
duty or duty of trust to the Company.
4. METHOD OF EXERCISE. This Option shall be exercisable in whole or in
part in accordance with the exercise schedule set forth in Section 3 hereof by
written notice which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such Shares as may be required by the Company pursuant to the provisions of
the Plan. Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price. This
Option shall be deemed to be exercised after both (a) receipt by the Company of
such written notice accompanied by the exercise price and (b) arrangements that
are satisfactory to the Committee in its sole discretion have been made for
Optionee's payment to the Company of the amount that is necessary to be withheld
in accordance with applicable Federal or state withholding requirements. No
Shares will be issued pursuant to the Option unless and until such issuance and
such exercise shall comply with all relevant provisions of applicable law,
including the requirements of any stock exchange upon which the Shares then may
be traded.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) such other consideration or in such other manner as may
be determined by the Committee or the Board, which other method, in the
discretion of the Committee or the Board may include, without limitation,
payment of the exercise price in whole or in part (i) with Shares, (ii) by a
promissory note payable to the order of the Company in a form acceptable to the
Committee, or (iii) by the Company retaining from the Shares to be delivered
upon exercise of the Option that number of Shares having a Fair Market Value on
the date of exercise equal to the option price for the number of Shares with
respect to which the Optionee exercises the Option or by any other form of
cashless exercise procedure approved by the Committee or the Board.
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6. TERMINATION OF OPTION. Any unexercised portion of the Option shall
automatically and without notice terminate and become null and void at the time
of the earliest to occur of:
(a) three months after the date on which the
Optionee ceases to be a Director of the Company for any reason other than
Optionee's willful misconduct or negligence, disability, death or retirement;
(b) immediately in the event of the Optionee's
willful misconduct or negligence;
(c) twelve months after the Optionee ceases to be a
Director by reason of his disability; and
(d) twelve months after the date of the Optionee's
death in the event that such death occurs prior to the time the Option otherwise
would become null and void pursuant to this Section 6.
Also, the Committee or the Board, in its sole discretion may
by giving written notice (the "cancellation notice") cancel, effective upon the
date of the consummation of any Corporate Transaction described in Section
9(b)(ii) of the Plan or the consummation of any reorganization, merger,
consolidation or other transaction in which the Company does not survive, any
Option that remains unexercised on such date. Such cancellation notice shall be
given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
7. TRANSFERABILITY. The Option is not transferable otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
8. NO RIGHTS OF STOCKHOLDERS. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
9. ACCELERATION OF EXERCISABILITY OF OPTION. This Option shall become
immediately fully exercisable in the event of a "Change in Control", as defined
in Section 9(b) of the Plan, or in the event that the Committee or the Board
exercises its discretion to provide a cancellation notice with respect to the
Option pursuant to Section 6 hereof.
10. NO RIGHT TO CONTINUED SERVICE AS A DIRECTOR OR ACTING CHIEF
EXECUTIVE OFFICER. Neither the Option nor this Agreement shall confer upon the
Optionee any right to continued service as a Director or acting Chief Executive
Officer of the Company.
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11. LAW GOVERNING. This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Florida.
12. INTERPRETATION. The Optionee accepts the Option subject to all the
terms and provisions of the Plan and this Agreement. The undersigned Optionee
hereby accepts as binding, conclusive and final all decisions or interpretations
of the Committee or the Board upon any questions arising under the Plan and this
Agreement.
13. NOTICES. Any notice under this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at 000 Xxxxxxxx Xxxxxx,
Xxxxx Xxxxxx, XX 00000, or if the Company should move its principal office, to
such principal office, and, in the case of the Optionee, to the Optionee's last
permanent address as shown on the Company's records, subject to the right of
either party to designate some other address at any time hereafter in a notice
satisfying the requirements of this Section.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 11th day of June, 1997.
COMPANY:
SUNGLASS HUT INTERNATIONAL, INC.
By:____________________________________
Xxxxx X. Xxxxxxxx,
Chief Financial Officer
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Optionee acknowledges receipt of a copy of the Plan and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option, and fully
understands all provisions of the Option.
OPTIONEE:
______________________________________
Xxxxx X. Xxxxxxxx
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