EXHIBIT10.22

 

STOCK OPTION

AGREEMENT NUMBER

   LOGO [g9859698596_img001.jpg]   

NUMBER OF STOCK

OPTIONS GRANTED

THIS NON-QUALIFIED STOCK OPTION AGREEMENT, dated                     
(“Effective Date”), is made by and between PETCO Animal Supplies, Inc., a
Delaware corporation (the “Company)” and                      (the “Optionee”):

WHEREAS, the Company has established the 2002 Stock Incentive Award Plan of
PETCO Animal Supplies, Inc. (as amended or restated from time to time, the
“Plan”), the terms of which are hereby incorporated by reference and made a part
of this Agreement; and

WHEREAS, the Company wishes to grant the Optionee the opportunity to purchase
                     shares of its $0.001 par value Common Stock (the “Option
Shares”) at a purchase price of                      per share (the “Purchase
Price”), subject to the terms of this Agreement (the “Option”); and

WHEREAS, the Administrator has determined that it would be to the advantage and
best interest of the Company and its stockholders to grant the Option provided
for herein to the Optionee in consideration of services to the Company and/or
its Subsidiaries;

WHEREAS, this Option is NOT intended to qualify as an “incentive stock option”
within the meaning of Section 422 of the Internal Revenue Code.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree to all of the terms and conditions set forth
on the reverse side hereof.

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

 

PETCO Animal Supplies, Inc.     I hereby acknowledge receipt of the foregoing
Non-Qualified Stock Option on the Grant Date and agree to all of the terms and
conditions set forth in this Agreement:      

Optionee:

            

(Signature)

By:

          

Title:

        

Optionee ID:

    

THIS CERTIFICATE REPRESENTS A STOCK OPTION AGREEMENT AND NOT AN ACTUAL SHARE OF
STOCK

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ARTICLE I – DEFINITIONS

Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
All capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Plan.

1.1 Retirement. “Retirement” shall mean a Termination of Employment other than a
discharge for good cause (as determined by the Administrator) if the sum of
(i) Optionee’s age as of the date of termination plus (ii) the number of full
years of Optionee’s service with the Company as of the date of termination, is
equal to or greater than seventy (70); provided, however, that Optionee’s
Retirement shall not be deemed to have occurred unless Optionee has at least
five (5) full years of service with the Company.

ARTICLE II – GRANT OF OPTION

2.1 Grant of Option. In consideration of the Optionee’s agreement to provide
services to the Company or its Subsidiaries, and for other good and valuable
consideration, on the date hereof the Company irrevocably grants to the Optionee
the option to purchase any part or all of the aggregate number of shares of its
$0.001 par value Common Stock set forth above upon the terms and conditions set
forth in this Agreement.

2.2 Purchase Price. The purchase price of the shares of stock covered by the
Option shall be the price set forth above, without commission or other charge.

2.3 Consideration to Company. In consideration of the grant of this Option by
the Company, the Optionee agrees to render faithful and efficient services to
the Company or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe. Nothing in this Agreement or in the
Plan shall confer upon the Optionee any right to continue in the employ of the
Company or any Subsidiary, or shall interfere with or restrict in any way the
rights of the Company and its Subsidiaries, which are hereby expressly reserved,
to discharge the Optionee at any time for any reason whatsoever, with or without
cause.

2.4 Adjustments in Option. The Administrator shall make adjustments with respect
to the Option in accordance with the provisions of Section 11.3 of the Plan.

ARTICLE III – PERIOD OF EXERCISABILITY

3.1 Commencement of Exercisability.

(a) Subject to subsections (b) and (c), the Option shall become 100% vested and
fully exercisable on the third anniversary hereof.

(b) No portion of the Option which is unvested or unexercisable at Termination
of Employment shall thereafter become vested or exercisable.

(c) Notwithstanding subsection (b), if the Optionee incurs a Termination of
Employment as a result of the Optionee’s Retirement and such Termination of
Employment occurs prior to the date the Option becomes vested and fully
exercisable in accordance with Section 3.1(a), the Option shall become fully
vested as of the date of such Termination of Employment, but shall not be
exercisable until the third anniversary of the Effective Date.

3.2 Duration of Exercisability. The Option shall remain exercisable as provided
in Section 3.1 until it becomes unexercisable under Section 3.3.

3.3 Expiration of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:

(a) The expiration of ten (10) years from the date the Option was granted; or

(b) Subject to subsection (c), the expiration of three (3) months from the date
of the Optionee’s Termination of Employment unless such Termination of
Employment results from his death or his disability (within the meaning of
Section 22(e)(3) of the Code), provided that if the Optionee dies within said
three (3) month period, the period shall be extended to end twelve (12) months
from the date of Optionee’s death;

(c) To the extent the Optionee incurs a Termination of Employment as a result of
the Optionee’s Retirement as set forth in Section 3.1(c), the last to occur of
the following: (1) if the Optionee dies prior to the third anniversary of the
Effective Date, the expiration of twelve (12) months from the date of Optionee’s
death, (2) three (3) months from the date the Option becomes exercisable
pursuant to Section 3.1(c), or (3) if the Optionee dies within said three
(3) month period, the expiration of twelve (12) months from the date of
Optionee’s death; or

(d) The expiration of twelve (12) months from the date of the Optionee’s
Termination of Employment by reason of his disability (within the meaning of
Section 22(e)(3) of the Code) or death, provided that if the Optionee dies
within said twelve (12) month period, the period shall be extended to end twelve
(12) months from the date of Optionee’s death.

ARTICLE IV – EXERCISE OF OPTION

4.1 Person Eligible to Exercise. Except as provided in Section 5.1, during the
lifetime of the Optionee, only he may exercise the Option or any portion
thereof. After the death of the Optionee, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable under Section 3.3,
be exercised by his personal representative or by any person empowered to do so
under the deceased Optionee’s will or under the then applicable laws of descent
and distribution.

4.2 Partial Exercise. Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at any
time prior to the time when the Option or portion thereof becomes unexercisable
under Section 3.3; provided, however, that each partial exercise shall be for
whole shares only.

4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when the Option or such portion becomes
unexercisable under Section 3.3:

(a) A written notice complying with the applicable rules established by the
Administrator stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion; and

(b) Full cash payment to the Secretary of the Company for the shares with
respect to which such Option or portion is exercised; or

(i) With the consent of the Administrator, a notice that the Optionee has placed
a market sell order with a broker with respect to shares of the Company’s Common
Stock then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the Option exercise price; or

(ii) With the consent of the Administrator, any other consideration permitted
under the Plan; and

(c) A bona fide written representation and agreement, in a form satisfactory to
the Administrator, signed by the Optionee or other person then entitled to
exercise such Option or portion, stating that the shares of stock are being
acquired for his own account, for investment and without any present intention
of distributing or reselling said shares or any of them except as may be
permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Administrator may, in its
sole discretion, take whatever additional actions it deems appropriate to insure
the observance and performance of such representation and agreement and to
effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Administrator may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Securities Act, and may issue stop-transfer orders
covering such shares. Share certificates evidencing stock issued on exercise of
this Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and

(d) Full payment to the Company (or other employer corporation) of all amounts
which, under federal, state or local tax law, it is required to withhold upon
exercise of the Option; with the consent of the Administrator in the form of,
(i) shares of the Company’s Common Stock owned by the Optionee, duly endorsed
for transfer, with a Fair Market Value on the date of delivery equal to the sums
required to be withheld, or (ii) shares of the Company’s Common Stock issuable
to the Optionee upon exercise of the Option with a Fair Market Value on the date
of exercise of the Option or any portion thereof equal to the sums required to
be withheld, may be used to make all or part of such payment; provided that the
number of shares of Common Stock which may be withheld with respect to the
issuance, vesting, exercise or payment of any Option (or which may be
repurchased from the Optionee of such Option within six months after such shares
of Common Stock were acquired by the Optionee from the Company) in order to
satisfy the Optionee’s federal and state income and payroll tax liabilities with
respect to the issuance, vesting, exercise or payment of the Option shall be
limited to the number of shares which have a Fair Market Value on the date of
withholding or repurchase equal to the aggregate amount of such liabilities
based on the minimum statutory withholding rates for federal and state tax
income and payroll tax purposes that are applicable to such supplemental taxable
income; and

(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.

By signing this Agreement, the Optionee agrees not to sell any shares of the
Company’s Common Stock issued upon exercise of the Option at a time when
applicable laws or Company policies prohibit a sale. This restriction will apply
as long as the Optionee is an employee, consultant or director of the Company or
a Subsidiary.

4.4 Conditions to Issuance of Stock Certificates. The shares of stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. Such shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any
certificate or certificates for shares of stock purchased upon the exercise of
the Option or portion thereof prior to fulfillment of all of the following
conditions:

(a) The admission of such shares to listing on all stock exchanges on which such
class of stock is then listed; and

(b) The completion of any registration or other qualification of such shares
under any state or federal law or under rulings or regulations of the Securities
and Exchange Commission or of any other governmental regulatory body, which the
Administrator shall, in its sole discretion, deem necessary or advisable; and

(c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its sole discretion,
determine to be necessary or advisable; and

(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option; and

(e) The lapse of such reasonable period of time following the exercise of the
Option as the Administrator may from time to time establish for reasons of
administrative convenience.

4.5 Rights as Stockholder. The holder of the Option shall not be, nor have any
of the rights or privileges of, a stockholder of the Company in respect of any
shares purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.

ARTICLE V – OTHER PROVISIONS

5.1 Option Not Transferable. Neither the Option nor any interest or right
therein or part thereof shall be sold, pledged, assigned, or transferred in any
manner other than by will or the laws of descent and distribution, unless and
until such Option has been exercised, or the shares underlying such Option have
been issued, and all restrictions applicable to such shares have lapsed.
Notwithstanding the foregoing the Option may be transferred by the Optionee, in
writing and with prior written notice to the Administrator, by gift, without the
receipt of any consideration, to a member of the Optionee’s immediate family, as
defined in Rule 16a-1 under the Exchange Act, or to a trust for the exclusive
benefit of, or any other entity owned solely by, such members, provided that the
Option shall continue to be subject to all of the terms and conditions as
applicable to the original Optionee, and the transferee shall execute any and
all such documents requested by the Administrator in connection with the
transfer, including, without limitation, to evidence the transfer and to satisfy
any requirements for an exemption for the transfer under applicable federal and
state securities laws. Neither the Option nor any interest or right therein or
part thereof shall be liable for the debts, contracts or engagements of the
Optionee or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of
law by judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

5.2 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address set
forth in the records of the Company. By a notice given pursuant to this
Section 5.2, either party may hereafter designate a different address for
notices to be given to him. Any notice which is required to be given to the
Optionee shall, if the Optionee is then deceased, be given to the Optionee’s
personal representative if such representative has previously informed the
Company of his status and address by written notice under this Section 5.2. Any
notice shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service; provided, however, that any notice to be given by the Optionee relating
to the exercise of the Option or any portion thereof shall be deemed duly given
upon receipt by the Secretary or his office.

5.3 Miscellaneous. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement. This
Agreement shall be administered, interpreted and enforced under the internal
laws of the State of California without regard to conflicts of laws thereof.
This Agreement and the Plan may be amended without the consent of the Optionee,
provided that such amendment would not impair any rights of the Optionee under
this Agreement. No amendment of this Agreement shall, without the consent of the
Optionee, impair any rights of the Optionee under this Agreement. The invalidity
or unenforceability of any particular provision hereof shall not affect the
other provisions hereof, and this Agreement shall be construed in all respects
as if such invalid or unenforceable provision was omitted. The Option and any
payments with respect thereto shall not constitute “compensation” for purposes
of any pension, welfare or other benefit plan or policy of the Company unless
provided for therein. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Except as otherwise
provided herein, the Company’s rights and obligations hereunder may be assigned
to any Company Subsidiary or to any successor pursuant to a merger,
consolidation or similar event. Subject to the foregoing, this Agreement and the
respective rights and obligations of the parties hereto shall inure to the
benefit of and be binding upon, the successors and assigns of the parties.