NON-QUALIFIED STOCK OPTION AGREEMENT [NON-EMPLOYEE DIRECTOR]
EXHIBIT
10.2
[NON-EMPLOYEE
DIRECTOR]
STOCK
OPTION AGREEMENT made as of the 12th day of
January 2011, by and between Frederick’s of Hollywood Group Inc., a New York
corporation (the “Company”), and __________________ (the
“Director”).
WHEREAS,
the Director is presently a director of the Company and the Company is desirous
of increasing the incentive of the Director to exert his utmost efforts in
improving the business of the Company;
WHEREAS,
on January 12, 2011, pursuant to the terms and conditions of the Company’s 2010
Long-Term Incentive Equity Plan (the “Plan”), the Board of Directors of the
Company (the “Committee”) authorized that each non-employee director be granted
an option (the “Option”) to purchase 17,500 shares of the authorized but
unissued common stock of the Company, $.01 par value (the “Common Stock”),
conditioned upon the Director’s acceptance thereof upon the terms and conditions
set forth in this Agreement and subject to the terms of the Plan (capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Plan); and
WHEREAS,
the Director desires to acquire the Option on the terms and conditions set forth
in this Agreement and subject to the terms of the Plan;
IT IS
AGREED:
1. Grant of Stock
Option. The Company hereby grants to the Director the Option to purchase
all or any part of an aggregate of 17,500 shares of Common Stock (the “Option
Shares”) on the terms and conditions set forth herein and subject to the
provisions of the Plan.
2. Non-Qualified Stock
Option. The Option represented hereby is not intended to be an
Option which qualifies as an “Incentive Stock Option” under Section 422 of
the Internal Revenue Code of 1986, as amended.
3. Exercise
Price. The exercise price of the Option shall be $1.05 per share, subject to
adjustment as hereinafter provided.
4. Exercisability. Subject
to the terms and conditions of the Plan, this Option this Option shall vest and
become exercisable in three (3) installments as follows: (i) 5,833
Option Shares will become exercisable on January 12, 2011, (ii) 5,833 Option
Shares will become exercisable on January 12, 2012 and (iii) 5,834 Option Shares
will become exercisable on January 12, 2013. After a portion of the
Option becomes exercisable, it shall remain exercisable except as otherwise
provided herein, until the close of business on January 11, 2021 (the “Exercise
Period”).
5. Effect of Termination of
Directorship. If Director’s status as a Director of the
Company terminates for any reason, the portion of the Option that was
exercisable as of the date of termination may thereafter be exercised by the
Director or by the legal representative of the estate or by the legatee of the
Director under the will of the Director until the expiration of the Exercise
Period. The portion of the Option, if any, that was not exercisable
as of the date of termination shall immediately expire.
6. Withholding
Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Director for Federal income tax
purposes with respect to the Option, the Director shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount (“Withholding Tax”). The obligations
of the Company under the Plan and pursuant to this Agreement shall be
conditional upon such payment or arrangements with the Company and the Company
shall, to the extent permitted by law, have the right to deduct any Withholding
Taxes from any payment of any kind otherwise due to the Director from the
Company.
7. Adjustments.
7.1 In
the event of a stock split, stock dividend, combination of shares, or any other
similar change in the Common Stock of the Company as a whole, the Board of
Directors of the Company shall make equitable, proportionate adjustments in the
number and kind of shares covered by the Option and in the option price
hereunder.
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7.2 In
the event of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 7.1 or that solely affects
the par value of such shares of Common Stock, or in the case of any merger or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or reorganization of the
outstanding shares of Common Stock), the Director shall have the right
thereafter (until the expiration of the right of exercise of this Option) to
receive upon the exercise hereof after such event, for the same aggregate
Exercise Price payable hereunder immediately prior to such reclassification,
reorganization, merger or consolidation, the amount and kind of consideration
receivable by a holder of the number of shares of Common Stock of the Company
obtainable upon exercise of this Option immediately prior to such
event. The provisions of this Section 7.2 shall similarly apply to
successive reclassifications, reorganizations, mergers or consolidations, sales
or other transfers.
8. Method of
Exercise.
8.1 Notice to the
Company. The Option shall be exercised in whole or in part by
written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice and of the Withholding Taxes, if
any.
8.2 Delivery of Option
Shares. The Company shall deliver a certificate for the Option
Shares to the Director as soon as practicable after payment
therefor.
8.3 Payment of Purchase
Price. The Director shall make cash payments by certified or
bank check, in each case payable to the order of the Company; the Company shall
not be required to deliver certificates for Option Shares until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof and of the Withholding Taxes, if any.
9. Nonassignability. The
Option shall not be assignable or transferable except by will or by the laws of
descent and distribution in the event of the death of the
Director. No transfer of the Option by the Director by will or by the
laws of descent and distribution shall be effective to bind the Company unless
the Company shall have been furnished with written notice thereof and a copy of
the will and such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
10. Company
Representations. The Company hereby represents and warrants to
the Director that:
(i) the
Company, by appropriate and all required action, is duly authorized to enter
into this Agreement and consummate all of the transactions contemplated
hereunder; and
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(ii) the
Option Shares, when issued and delivered by the Company to the Director in
accordance with the terms and conditions hereof, will be duly and validly issued
and fully paid and non-assessable.
11. Director
Representations. The Director hereby represents and warrants
to the Company that:
(i) he
is acquiring the Option and shall acquire the Option Shares for his own account
and not with a view towards the distribution thereof;
(ii) he
has received a copy of all reports and documents required to be filed by the
Company with the Commission pursuant to the Exchange Act within the last 24
months and all reports issued by the Company to its shareholders;
(iii) he
understands that he must bear the economic risk of the investment in the Option
Shares, which cannot be sold by him unless they are registered under the
Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
(iv) in
his position with the Company, he has had both the opportunity to ask questions
and receive answers from the officers and directors of the Company and all
persons acting on its behalf concerning the terms and conditions of the offer
made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(v) he
is aware that the Company shall place stop transfer orders with its transfer
agent against the transfer of the Option Shares in the absence of registration
under the 1933 Act or an exemption therefrom as provided herein;
(vi) he
has received a copy of the Plan and understands his rights with respect to the
Option Shares shall, in all respects, be subject to the terms and conditions of
the Plan and this Agreement;
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(vii) he
is aware of and understands he is subject to the Company’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Policy and has received a copy of such policy as of the date of this Agreement;
and
(viii) in
the absence of an effective registration statement under the 1933 Act, the
certificates evidencing the Option Shares shall bear the following
legend:
“The
shares represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933. The shares may not be
sold or transferred in the absence of such registration or an exemption
therefrom under said Act.”
12. Restriction on Transfer of
Option Shares. Anything in this Agreement to the contrary
notwithstanding, the Director hereby agrees that he shall not sell, transfer by
any means or otherwise dispose of the Option Shares acquired by him without
registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration
requirements is available thereunder, (ii) the Director has furnished the
Company with notice of such proposed transfer and the Company’s legal counsel,
in its reasonable opinion, shall deem such proposed transfer to be so exempt and
(iii) such transfer is in compliance with the Company’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Policy,
as in effect at such time.
13. Miscellaneous.
13.1 Notices. All
notices, requests, deliveries, payments, demands and other communications which
are required or permitted to be given under this Agreement shall be in writing
and shall be either delivered personally or sent by registered or certified
mail, or by private courier, return receipt requested, postage prepaid to the
parties at their respective addresses set forth herein, or to such other address
as either shall have specified by notice in writing to the
other. Notice shall be deemed duly given hereunder when delivered or
mailed as provided herein.
13.2 Plan Paramount; Conflicts
with Plan. This Agreement and the Option shall, in all
respects, be subject to the terms and conditions of the Plan, whether or not
stated herein. In the event of a conflict between the provisions of
the Plan and the provisions of this Agreement, the provisions of the Plan shall
in all respects be controlling.
13.3 Shareholder
Rights. The Director shall not have any of the rights of a
shareholder with respect to the Option Shares until such shares have been issued
after the due exercise of the Option.
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13.4 Waiver. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent
breach.
13.5 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This
Agreement may not be amended except by writing executed by the Director and the
Company.
13.6 Binding Effect;
Successors. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and, to the extent not prohibited herein,
their respective heirs, successors, assigns and representatives. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto and as provided above, their respective heirs, successors,
assigns and representatives any rights, remedies, obligations or
liabilities.
13.7 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
13.8 Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Agreement.
13.9 Section
409A. The Option granted hereunder is intended to be exempt
from the provisions of Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”). To the extent that the Options or any
payments or benefits provided hereunder are considered deferred compensation
subject to Section 409A, the Company intends for this Agreement and the Option
to comply with the standards for nonqualified deferred compensation established
by Section 409A (the “409A Standards”). Notwithstanding anything
herein to the contrary, to the extent that any terms of this Agreement or the
Option would subject the Director to gross income inclusion, interest or an
additional tax pursuant to Section 409A, those terms are to that extent
superseded by the 409A Standards. The Company reserves the right to
amend the Option granted hereunder to cause such Option to comply with or be
exempt from Section 409A.
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IN
WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day and
year first above written.
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DIRECTOR:
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FREDERICK’S
OF HOLLYWOOD GROUP INC.
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By:
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Name:
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Name:
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Title:
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Address
of Employee:
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Address
of Company:
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▇. ▇▇▇▇▇▇ ▇▇▇▇.
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EXHIBIT
A
FORM
OF NOTICE OF EXERCISE OF OPTION
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DATE
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Frederick’s
of Hollywood Group Inc.
▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: The
Board of Directors
Re: Purchase of Option
Shares
Gentlemen:
In
accordance with my Stock Option Agreement dated as of January 12, 2011
(“Agreement”) with Frederick’s of Hollywood Group Inc. (the “Company”), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company’s common stock, par value $.01 per share (“Common Stock”), which are
being purchased for investment and not for resale.
As
payment for my shares, enclosed is a certified or bank check payable
to Frederick’s of Hollywood Group Inc. in the sum of $
.
I hereby
represent, warrant to, and agree with, the Company that
(i) I
acquired the Option and shall acquire the Option Shares for my own account and
not with a view towards the distribution thereof;
(ii) I
have received a copy of all reports and documents required to be filed by the
Company with the Commission pursuant to the Exchange Act within the last 24
months and all reports issued by the Company to its shareholders;
(iii) I
understand that I must bear the economic risk of the investment in the Option
Shares, which cannot be sold by me unless they are registered under the
Securities Act of 1933 (the “1933 Act”) or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the Option
Shares for sale under the 1933 Act;
(iv) in
my position with the Company, I have had both the opportunity to ask questions
and receive answers from the officers and directors of the Company and all
persons acting on its behalf concerning the terms and conditions of the offer
made hereunder and to obtain any additional information to the extent the
Company possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
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(v) I
am aware that the Company shall place stop transfer orders with its transfer
agent against the transfer of the Option Shares in the absence of registration
under the 1933 Act or an exemption therefrom as provided herein;
(vi) I
have received a copy of the Company’s 2010 Long-Term Incentive Equity Plan and
understand my rights with respect to the Option Shares shall, in all respects,
be subject to the terms and conditions of the Company’s 2010 Long-Term Incentive
Equity Plan and this Agreement;
(vii) I
am aware of and understand that I am subject to the Company’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Policy and have received a copy of such policy; and
(viii) in
the absence of an effective registration statement under the 1933 Act, the
certificates evidencing the Option Shares shall bear the following
legend:
“The
shares represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933. The shares
may not be sold or transferred in the absence of such registration or an
exemption therefrom under said Act.”
Kindly
forward to me my certificate at your earliest convenience.
Very
truly yours,
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(Signature)
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(Address)
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(Print
Name)
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(Address)
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(Social
Security Number)
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