EXHIBIT 10.11

 

 

STOCK OPTION AGREEMENT

 

This Stock Option Agreement (“Agreement”), is made as of [_____], 20[__] (the
“Grant Date”), by and between Monster Beverage Corporation, a Delaware
corporation (the “Company”), and [______________] (“Participant”).

 

Preliminary Recitals

 

A.                                Participant is an employee of the Company or
its Subsidiaries.

B.                                 Pursuant to the Monster Beverage Corporation
2011 Omnibus Incentive Plan (the “Plan”), the Company desires to grant
Participant an incentive stock option to purchase shares of the Company’s common
stock, par value $0.005 per share (the “Common Stock”).

C.                                 Capitalized terms not otherwise defined in
this Agreement shall have the meaning given to them in the Plan.

NOW, THEREFORE, the Company and Participant agree as follows:

1.                                    Grant of Incentive Stock Option.  The
Company hereby grants to Participant, subject to the terms and conditions set
forth herein and in the Plan, an incentive stock option (“ISO”) to purchase
[______] shares of Common Stock, at the purchase price of $[_____] per share
(the “Option”), such Option to be exercisable and exercised as hereinafter
provided.  If for any reason the Option or any portion of the Option shall not
qualify as an ISO, then, to the extent of such nonqualification, such Option (or
portion thereof) shall be regarded as a nonqualified stock option granted under
the Plan, provided that such Option (or portion thereof) otherwise complies with
the Plan’s requirements relating to nonqualified stock options.  In no event
shall any member of the Committee or the Company or its Subsidiaries (or their
respective employees, officers or directors) have any liability to Participant
(or any other person) due to the failure of an Option (or any portion thereof)
to qualify for any reason as an ISO.

2.                                    Exercise Period.  The Option shall expire
three months after the termination of the Participant’s employment with the
Company or its Subsidiaries unless the employment is terminated by the Company
or its Subsidiaries for Cause (as defined below) or unless the employment is
terminated by reason of the death or Total Disability (as defined below) of
Participant. If the Participant’s employment is terminated by the Company or its
Subsidiaries for Cause, the Option shall expire as of the date employment
terminates.  If the Participant’s employment terminates due to his death or
Total Disability, then the Option may be exercised by

 

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Participant or the person or persons to which Participant’s rights under this
Agreement pass by will, or if no such person has such right, by his executors or
administrators, within six months after the date of death or Total Disability,
but no later than the expiration date specified in Section 3(d) below.  “Cause”
means the Participant’s act(s) of fraud or dishonesty, knowing and material
failure to comply with applicable laws or regulations, or drug or alcohol abuse,
in any case as determined by the Committee. “Total Disability” means the
complete and permanent inability of the Participant to perform all of his or her
duties under the terms of his or her employment with the Company or its
Subsidiaries, as determined by the Committee upon the basis of such evidence,
including independent medical reports and data, the Committee deems appropriate
or necessary.

3.                                    Exercise of Option

(a)                               Subject to the other terms of this Agreement
regarding the exercisability of the Option, provided that Participant is
employed by the Company or its Subsidiaries on the relevant Exercise Date set
forth below, the Option may be exercised in respect of the number of shares (the
“Option Portion”) listed in column A from and after the Exercise Date listed in
column B,

 

Column “A”

Column “B”

 

 

Number of Shares

Exercise Date

[_______]

[_______]

[_______]

[_______]

[_______]

[_______]

 

(b)                              This Option may be exercised, to the extent
exercisable by its terms, from time to time in whole or in part at any time
prior to the expiration thereof.  Any exercise shall be accompanied by a written
notice to the Company specifying the number of shares as to which this Option is
being exercised (the “Option Shares”).  Notations of any partial exercise or
installment exercise, shall be made by the Company in its records.

(c)                               Notwithstanding Section 3(a) above, this
Option shall be fully exercisable in the event Participant’s employment with the
Company or its Subsidiaries is terminated by the Participant for “Good Reason”
(as defined below), or the Company or its Subsidiaries terminates the
Participant’s employment without “Cause” (as defined above). “Good Reason” means
the Participant’s termination of employment with the Company or its Subsidiaries
on or after a reduction in his compensation or benefits, his removal as the
Company’s Vice-Chairman of the Board or President, or his being assigned duties
or responsibilities that are inconsistent with the dignity, importance or scope
of his position with the Company.

 

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(d)                             Notwithstanding anything else herein to the
contrary, this Option shall expire on the tenth anniversary of the Grant Date.

(e)                               The Participant hereby agrees to notify the
Company in writing in the event shares acquired pursuant to the exercise of this
Option are transferred, other than by will or by the laws of descent and
distribution, within two years after the Grant Date or within one year after the
issuance of such shares pursuant to such exercise.

4.                                    Payment of Purchase Price Upon
Exercise.  At the time of any exercise of all or a portion of the Option, the
purchase price shall be paid in full to the Company in any of the following ways
or in any combination of the following ways:

(a)                               By check or other immediately available funds.

(b)                              With property consisting of shares of Common
Stock.  (The shares of Common Stock to be used as payment shall be valued as of
the date of exercise of the Option at the Closing Price as defined below.  For
example, if Participant exercises the option for [______] shares at a total
Exercise Price of $[____], assuming an exercise price of $[______] per share,
and the Closing Price is $[______], Participant may pay for the [_______] Option
Shares by transferring [_______] shares of Common Stock to the Company.)

(c)                               By delivering a properly executed exercise
notice together with irrevocable instructions to a broker to deliver promptly to
the Company the amount of sale proceeds necessary to pay the purchase price and
applicable withholding taxes, and such other documents as the Committee may
determine.

(d)                             For purposes of this Agreement, the term
“Closing Price” means, with respect to the Company’s Common Stock, the last sale
price regular-way or, in case no such sale takes place on such date, the average
of the closing bid and asked prices regular-way on the principal national
securities exchange on which the Common Stock is listed or admitted to trading;
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, the last sale price of the Common Stock on the consolidated
transaction reporting system of the National Association of Securities Dealers
(“NASD”), if such last sale information is reported on such system or, if not so
reported, the average of the closing bid and asked prices of the securities on
the National Association of Securities Dealers Automatic Quotation System
(“NASDAQ”) or any comparable system or, if the Common Stock is not listed on
NASDAQ or a comparable system, the “Closing Price” shall be the fair market
value of the Common Stock as determined by the Committee in good faith.

 

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5.                                    Purchase for Investment; Resale
Restrictions.  Unless at the time of exercise of the Option there shall be a
valid and effective registration statement under the Securities Act of 1933 (the
“‘33 Act”) and appropriate qualification and registration under applicable state
securities laws relating to the Option Shares being acquired, Participant shall
upon exercise of the Option give a representation that he is acquiring such
shares for his own account for investment and not with a view to, or for sale in
connection with, the resale or distribution of any such shares.  In the absence
of such registration statement, Participant shall execute a written affirmation,
in a form reasonably satisfactory to the Company, of such investment intent. 
Participant further agrees that he will not sell or transfer any Option Shares
until he requests and receives an opinion of the Company’s counsel or other
counsel reasonably satisfactory to the Company to the effect that such proposed
sale or transfer will not result in a violation of the ‘33 Act, or a
registration statement covering the sale or transfer of the shares has been
declared effective by the Securities and Exchange Commission, or he obtains a
no-action letter from the Securities and Exchange Commission with respect to the
proposed transfer.

6.                                    Nontransferability. Except to the extent
permitted by the Plan, this Option shall not be transferable other than by will
or by the laws of descent and distribution.  During the lifetime of Participant,
this Option shall be exercisable only by Participant.

7.                                    Adjustments.

(a)                               Subject to clause 7(b) below and Section 12.2
of the Plan, if the outstanding shares of stock of the Company are increased,
decreased, or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of stock or securities,
through merger, consolidation, sale of all or substantially all of the assets or
shares of the Company, reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other distribution with respect to
such shares of stock or other securities, then, to the extent permitted by the
Board, an appropriate and proportionate adjustment shall be made in

 

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(1) the maximum number and/or kind of shares provided in Paragraph 1 above;
(2) the number and/or kind of shares or other securities subject to the
outstanding options and tandum SARs, if any; and (3) the price for each share or
other unit of any other securities subject to outstanding options without change
in the aggregate purchase price or value as to which the options remain
exercisable or subject to restrictions.  Any adjustment under this clause
7(a) shall be made by the Board, whose determination as to what adjustments
shall be made, if any, and the extent thereof, will be final, binding and
conclusive.  No fractional interests will be issued under this Agreement
resulting from any such adjustment.

(b)                              Notwithstanding anything else herein to the
contrary, unless the Board, at any time, in its sole discretion, determines that
the Participant did not perform the duties reasonably requested of him in
connection with a Change in Control, including, without limitation, agreeing to
provide remunerated services to the Company (for a reasonable length of time)
following a Change in Control, upon the occurrence of a Change in Control, the
Option or any portion thereof not theretofore exercisable, shall immediately
become exercisable in its entirety and the Option may be purchased by the
Company for cash at a price equal to the Fair Market Value less the purchase
price payable by the Participant to exercise the Option as set out in Section 1
above for one (1) share of Common Stock of the Company multiplied by the number
of shares of Common Stock which the Participant has the option to purchase
pursuant to the terms of Section 1 above.

8.                                    No Rights as Stockholder.  Participant
shall have no rights as a stockholder with respect to any shares of Common Stock
subject to this Option prior to the date of issuance to him of a certificate or
certificates for such shares.

9.                                    No Right to Continue Employment.  This
Agreement shall not confer upon Participant any right with respect to
continuance of employment with the Company or its Subsidiaries nor shall it
interfere in any way with the right of the Company or its Subsidiaries to
terminate the Participant’s employment at any time.

10.                            Compliance With Law and Regulation.  This
Agreement and the obligation of the Company to sell and deliver shares of Common
Stock hereunder shall be subject to all applicable federal and state laws,
rules and regulations and to such approvals by any government or regulatory
agency as may be required.  If at any time the Board shall determine that
(i) the listing, registration or qualification of the shares of Common Stock
subject or related thereto upon any securities exchange or under any state or
federal law, or (ii) the consent or approval of any government regulatory body,
is necessary or desirable as a condition of or in connection with the issue or
purchase of shares of Common Stock hereunder, this Option may not be exercised
in whole or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Board.

 

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11.                            Tax Withholding Requirements.  The Company shall
have the right to require Participant to remit to the Company an amount
sufficient to satisfy any federal, state or local withholding tax requirements
prior to the delivery of any certificate or certificates for Common Stock.

12.                            Fractional Shares.  Notwithstanding any other
provision of this Agreement, no fractional shares of Common Stock shall be
issued upon the exercise of this Option, and the Company shall not be under any
obligation to compensate Participant in any way for such fractional shares.

13.                            Notices.  Any notice hereunder to the Company
shall be addressed to it at its office at 1 Monster Way, Corona, California
92879, Attention: [____________] with a copy (which shall not constitute notice)
to [__________________], Katten Muchin Rosenman LLP, 575 Madison Avenue, New
York, NY 10022, and any notice hereunder to Participant shall be addressed to
him at [__________________], subject to the right of either party to designate
at any time hereafter in writing some other address.

14.                            Amendment.  No modification, amendment or waiver
of any of the provisions of this Agreement shall be effective unless in writing
specifically referring hereto, and signed by both parties.

15.                            Governing Law.  This Agreement shall be construed
according to the laws of the State of Delaware and all provisions hereof shall
be administered according to and its validity shall be determined under, the
laws of such State, except where preempted by federal laws.

16.                            Counterparts.  This Agreement may be executed in
one or more counterparts, each of which shall constitute one and the same
instrument.

 

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IN WITNESS WHEREOF, Monster Beverage Corporation has caused this Agreement to be
executed by a duly authorized officer and Participant has executed this
Agreement both as of the day and year first above written.

 

PARTICIPANT

 

MONSTER BEVERAGE CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 [________________]

 

 

Name: [_______________]

 

 

 

Title: [_________________]

 

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