Exhibit 10.43
NON-QUALIFIED STOCK OPTION AGREEMENT
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Name of Optionee: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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No. Of Option Shares: 350,000 Grant Date: August 17, 1999
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Option Exercise Price: $.4375 Expiration Date: August 17, 2009
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Little Switzerland, Inc., a Delaware corporation (the "Company"),
hereby grants to the Optionee named above, who is now employed by the Company,
an option ("Stock Option") to purchase on or prior to the expiration date of
this Stock Option specified above (the "Expiration Date") all or any part of the
number of shares of common stock, par value $0.01 per share (the "Common
Stock"), of the Company specified above (the "Option Shares") at the per share
Stock Option exercise price specified above, subject to the terms and conditions
set forth herein. This Stock Option is not intended to qualify as an "incentive
stock option" under Section 422(b) of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").
1. Vesting Schedule. No portion of this Stock Option may be
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exercised until such portion shall have vested. Except as set forth below, and
subject to the determination of the Company in its sole discretion to accelerate
the vesting schedule hereunder due to other circumstances, this Stock Option
shall be vested and exercisable with respect to the following number of Option
Shares on the dates indicated:
Cumulative Number of
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Option Shares Exercisable Vesting Date
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70,000 August 17, 1999
140,000 August 17, 2000
210,000 August 17, 2001
280,000 August 17, 2002
350,000 August 17, 2003
In the event of a Change in Control of the Company (as defined in the
Optionee's Employment Agreement (the "Employment Agreement") with the Company
and L.S. Wholesale, Inc., dated August 17, 1999), all Stock Options then
outstanding granted to the Optionee prior to such Change in Control shall become
immediately vested and exercisable. In any event this Stock Option shall become
fully vested and exercisable with respect to all of the Option Shares on August
17, 2003. Once vested, this Stock Option shall continue to be exercisable at
any time or times prior to the Expiration Date, subject to the provisions
hereof.
2. Exercise of Stock Option.
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(a) The Optionee may exercise only vested portions of this Stock
Option and only in the following manner: Prior to the Expiration Date, the
Optionee may give written notice on any business day to the committee appointed
by the Board of Directors of the Company to administer stock options (the
"Committee") of his election to purchase some or all of the shares purchasable
at the time of such notice. Said notice shall specify the number of shares to be
purchased and shall be accompanied (i) by payment therefor in cash or, at the
Optionee's election, in shares of Common Stock of the Company having a fair
market value (as determined below) on the date of exercise equal to or less than
the total option exercise price, plus cash, in an amount equal to the amount, if
any, by which the total option exercise price exceeds the fair market value of
such shares of Common Stock, and (ii) by such agreement, statement or other
evidence as the Company may require in order to satisfy itself that the issuance
and conveyance of the shares being purchased pursuant to such exercise and any
subsequent resale thereof will be
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in compliance with applicable laws and regulations, including, without
limitation, all federal and state securities laws.
(b) Certificates for the shares so purchased will be issued and
delivered to the Optionee upon compliance to the satisfaction of the Company
with all requirements under applicable laws or regulations in connection with
such issuance. Until the Optionee shall have complied with the requirements
hereof, the Company shall be under no obligation to issue the shares subject to
this Stock Option, and the determination of the Committee (exclusive of the
Optionee, if at such time Optionee is a member of such Committee) as to such
compliance shall be final and binding on the Optionee. The Optionee shall not be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to this Stock Option unless and
until this Stock Option shall have been exercised pursuant to the terms hereof,
the Company shall have issued and delivered the shares to the Optionee, and the
Optionee's name shall have been entered as a stockholder of record on the books
of the Company. Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such shares of Common Stock.
(c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the number
of shares with respect to which this Stock Option is being exercised is the
total number of shares subject to exercise under this Stock Option at the time.
(d) Notwithstanding any other provision hereof, no portion of this
Stock Option shall be exercisable after the Expiration Date.
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(e) For purposes of this Agreement, the fair market value of the
Common Stock shall be determined in good faith by the Board of Directors of the
Company (exclusive of the Optionee, if at the time the Optionee is a member of
the Board of Directors), provided, however, that (x) if the Common Stock is
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System on the date that the fair market value must be
determined, fair market value shall not be less than the average of the highest
bid and lowest asked prices of the Common Stock on such date or on the last
preceding date on which a sale was reported, or if the Common Stock is admitted
to trading on the National Association of Securities Dealers Automated Quotation
National Market System on the date that the fair market value must be
determined, fair market value shall not be less than the closing price reported
for the Common Stock on such National Market System on such date or on the last
preceding date on which a sale was reported, or (y) if the Common Stock is
admitted to trading on a national securities exchange on the date that the fair
market value must be determined, fair market value shall not be less than the
last sale price reported for the Common Stock on such exchange on such date or
on the last date preceding such date on which a sale was reported.
3. Termination of Employment.
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(a) If the Optionee's employment by the Company terminates by reason
of his death or disability, this Stock Option may thereafter be exercised, to
the extent it was exercisable on the date of such termination, until the earlier
of (i) one year from the date of such termination of employment or (ii) the
Expiration Date.
(b) If the Optionee's employment by the Company terminates by reason
of his retirement in accordance with the Company's normal retirement policy as
determined by
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the Board of Directors of the Company, this Stock Option may thereafter be
exercised, to the extent it was exercisable on the date of such termination,
until the earlier of (i) one year from the date of such termination of
employment or (ii) the Expiration Date.
(c) If the Optionee's employment by the Company terminates by reason
of cause (as defined in the Employment Agreement), this Stock Option shall lapse
immediately upon the effective date of such termination and shall not be
exercisable at any time thereafter.
(d) If the Optionee's employment by the Company is terminated for any
reason other than death, disability, retirement or cause, this Stock Option may
thereafter be exercised, to the extent it was exercisable on the date of such
termination, until the earlier of (i) three months or (ii) the Expiration Date.
(e) The Committee shall have sole discretion to determine the reason
for the termination of the Optionee's employment by the Company.
4. Transferability. This Agreement is personal to the Optionee and is
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not transferable by the Optionee in any manner other than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code, or Title I of the Employee Retirement Income Security Act,
as amended, or the rules thereunder; provided, however, that the designation of
a beneficiary by the Optionee does not constitute a transfer. Options may be
exercised during the Optionee's lifetime only by the Optionee.
5. Restrictions on Issuance of Option Shares. The issuance of Option
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Shares upon exercise thereof shall be subject to compliance with all of the
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the
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Board of Directors of the Company.
6. Adjustment Upon Changes in Capitalization.
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(a) The shares of stock covered by this Stock Option are shares of
the Common Stock of the Company. If the shares of the Company's Common Stock as
a whole are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company, whether through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares, and the per share exercise price
of shares subject to any unexercised portion of this Stock Option. In the event
of any such adjustment in this Stock Option, the Optionee thereafter shall have
the right to purchase the number of shares under this Stock Option at the per
share price, as so adjusted, which the Optionee could purchase at the total
purchase price applicable to this Stock Option immediately prior to such
adjustment. Adjustments under this Paragraph 6 shall be made by the Board of
Directors (exclusive of the Optionee, if at such time Optionee is a member of
the Board of Directors) of the Company, whose determination as to what
adjustment shall be made, and the extent thereof, shall be conclusive. No
fractional shares of Common Stock shall be issued on account of any adjustment
specified above.
7. Effect of Certain Transactions. In the case of (a) the dissolution or
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liquidation of the Company, (b) a merger, reorganization or consolidation in
which the Company is acquired by another person or in which the Company is not
the surviving corporation, or (c) the sale of all or substantially all of the
assets of the Company to another corporation, this Stock Option shall
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terminate on the effective date of such dissolution, liquidation, merger,
reorganization, consolidation or sale, unless provision is made in such
transaction for the assumption of this Stock Option or the substitution for this
Stock Option of a new Stock Option of the successor employer corporation or a
parent or subsidiary thereof, with appropriate adjustment as to the number and
kind of shares and the per share exercise price, as provided in Paragraph 6. In
the event of such a termination, the Optionee will receive written notice
thereof at least twenty (20) days prior to the effective date of such
transaction or the record date on which shareholders of the Company entitled to
participate in such transaction shall be determined, whichever comes first. In
the event of such termination, any unexercised portion of this Stock Option,
which is vested and exercisable, shall be exercisable in full for at least
fifteen (15) days prior to the date of such termination; provided, however, that
in no event shall this Stock Option be exercisable after the Expiration Date.
8. Tax Withholding.
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(a) The Optionee, no later than the date as of which the value of
any Common Stock first becomes includable in the gross income of the Optionee
for federal income tax purposes, shall pay to the Company, or make arrangements
satisfactory to the Board of Directors regarding payment of any federal, state
or local taxes of any kind required by law to be withheld with respect to such
income. The Company shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the
Optionee.
(b) The Optionee may elect to have such tax withholding obligation
satisfied, in whole or in part, by:
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(i) authorizing the Company to withhold from shares of Common
Stock to be issued pursuant to the Stock Option a number of shares with an
aggregate fair market value that would satisfy the withholding amount due, or
(ii) transferring to the Company shares of Common Stock owned by
the Optionee with an aggregate fair market value that would satisfy the
withholding amount due. While the Optionee is a director or officer of the
Company within the meaning of Section 16(b) of the 1934 Act, the following
additional restrictions shall apply: (1) the election to satisfy tax withholding
obligations relating to the Stock Option in the manner permitted by this Section
8(b)(ii) shall be made either (A) during the period beginning on the third
business day following the date of release of quarterly or annual summary
statements of sales and earnings of the Company and ending on the twelfth
business day following such date, or (B) irrevocably at least six months prior
to the date as of which the receipt of such Common Stock first becomes a taxable
event for federal income tax purposes; and (2) such election shall not be made
within six months of the date of grant of the option.
9. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by the Optionee and a duly authorized representative
of the Company.
10. Governing Law. This Agreement shall be governed by the laws of the
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State of Delaware, except to the extent that such law is preempted by federal
law.
11. Miscellaneous. Notice hereunder shall be mailed or delivered to
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the Company at its principal place of business, and shall be mailed or delivered
to the Optionee at the address set forth below, or in either case at such other
address as one party may subsequently furnish to the other party in writing.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, INC.
Dated: August 17, 1999 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Acting President and Chief
Executive Officer
The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.
Dated: August 18, 1999 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Optionee's Address:
18524 Ocean Mist Drive
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Baco ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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