Non-Qualified Stock Option Agreement - David Johnston



 Exhibit 10.34 
 FIVE BELOW, INC. 
 EQUITY INCENTIVE PLAN 

NON-QUALIFIED STOCK OPTION AGREEMENT 
 Five Below, Inc. (the “Company”) hereby grants to David Johnston (the “Optionee”) an option to purchase a total of 500,000 shares of Common Stock of the Company (the “Option
Shares”), at the price and on the terms set forth herein, and in all respects subject to the terms, definitions and provisions of the Five Below, Inc. Equity Incentive Plan (the “Plan”) applicable to non-qualified stock options, which
terms and provisions are hereby incorporated by reference herein. Unless the context herein otherwise requires, the terms defined in the Plan shall have the same meanings when used herein. 

1.       Nature of the Option. This Option is intended to be a nonstatutory stock option and is not
intended to be an Incentive Stock Option within the meaning of section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or to otherwise qualify for any special tax benefits to the Optionee. 

2.       Date of Grant; Term of Option. This Option is granted this 23rd day of May, 2012, (the “Date of Grant”) and it may not be
exercised later than the date that is ten (10) years after the Date of Grant, subject to earlier termination, as provided in the Plan or Section 5 hereof. For purposes of this Agreement, the term “Effective Date of Grant” shall
mean 6/4/2012. 
 3.       Option Exercise Price. The Option exercise price per Share will
be the per Share Fair Market Value of our common stock as of the Effective Date of Grant as determined by the Board in accordance with the Plan, provided that if the Initial Public Offering for which the Company filed a registration
statement with the Securities and Exchange Commission (“SEC”) on April 18, 2012 closes on or before September 30, 2012 (the “IPO”), then, the Option exercise price per Share will be the greater of (i) the per Share
Fair Market Value of our common stock as of the Effective Date of Grant as determined by the Board in accordance with the Plan, or (ii) the initial per Share offer price to the public in connection with the IPO. 

4.       Exercise of Option. This Option shall be exercisable during its term only in accordance
with the terms and provisions of the Plan and this Award Agreement as follows: 
 (a)
      Right to Exercise. 
 (i)       In General.
Subject to Section 4(a)(ii) and 4(a)(iii) of this Option, the Option will vest and become exercisable according to the following schedule: 
  

			
	 If the Optionee has remained an

active employee of the Company from
 the Effective Date of Grant to the:
	  	 Then the Option will vest and
 become exercisable
with
 respect to:

	Second Anniversary of the Effective Date of Grant (the
“Second Anniversary”)	  	50% of the Option
Shares









			
	Ninety-first (91st) day following the Second Anniversary	  	An additional 6.25% of the Option
Shares
	One Hundred Eighty First (181st) day following the Second Anniversary	  	An additional 6.25% of the Option Shares
	Two Hundred Seventy First (271st) day following the Second Anniversary	  	An additional 6.25% of the Option Shares
	Third Anniversary of the Effective Date of Grant (the
“Third Anniversary”)	  	An additional 6.25% of the Option Shares
	Ninety-first (91st) day following the Third
Anniversary	  	An additional 6.25% of the Option Shares
	One Hundred Eighty First (181st) day following the Third Anniversary	  	An additional 6.25% of the Option Shares
	Two Hundred Seventy First (271st) day following the Third Anniversary	  	An additional 6.25% of the Option Shares
	Fourth Anniversary of the Effective Date of
Grant	  	An additional 6.25% of the Option Shares

 (ii)       Accelerated Vesting on Change in Control. In the event
of a Change in Control, the Option will vest and become exercisable with respect to fifty percent (50%) of the then unvested Option Shares, as of the date of such Change in Control. 

(iii)       Accelerated Vesting for Certain Terminations. If the Optionee ceases to be employed by
the Company after the first anniversary of the Effective Date of Grant and prior to the Second Anniversary as a result of: (i) his Disability, (ii) his death or (iii) a termination by the Company without Cause, then the Option will
vest and become exercisable with respect to twenty five percent (25%) of the Option Shares and will remain exercisable for the applicable time period provided in Section 5. 

(b)       Method of Exercise. The Optionee may exercise this Option by providing written notice
stating the election to exercise this Option. Such written notice must be signed by the Optionee and must be delivered in person or by certified mail to the Secretary of the Company or such other person as may be designated by the Company. The
written notice must be accompanied by payment of the option exercise price in the manner described in Section 4(c), by an executed Stock Restriction Agreement described in Section 4(f) and by any other agreements required by the Board or
its Committee and/or the terms of the Plan, which other agreements may restrict the sale or other transfer of the Shares and may include certain additional representations and agreements as to the Optionee’s investment intent with respect to
the Shares. This Option will be deemed to be exercised only upon the receipt by the Company of such written notice, payment of the option exercise price, and duly executed copies of the Stock Restriction Agreement and any other agreements required
by the Board or its Committee, the terms of the Plan and/or this Award Agreement. The Optionee will have no right to vote or receive dividends and will have no other rights as a stockholder with respect to such Shares notwithstanding the exercise of
this Option, until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the 

  
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stock certificate(s) evidencing Shares that are being issued upon exercise of this Option. The certificate(s) for the Shares will be registered in the name of the Optionee and will contain any
legend as may be required under the Plan, this Award Agreement, and/or applicable law. 
 (c)
      Method of Payment. The method of payment of the option exercise price will be determined by the Board or its Committee and may consist entirely of cash, certified check, or such other consideration or method
of payment as may be authorized under the Plan. 
 (d)       Partial Exercise. This Option
may be exercised in whole or in part; provided, however, that any exercise may apply only with respect to a whole number of Shares. 
 (e)       Restrictions on Exercise. This Option may not be exercised if the issuance of these Shares upon such exercise would constitute a violation of any applicable
federal or state securities laws or other laws or regulations. In addition, as a further condition to the exercise of this Option, the Company may require the Optionee to make any representation or warranty to the Company as may be required by or
advisable under any applicable law or regulation. 
 (f)       Stock Restriction Agreement.
In connection with and as a condition of exercising this Option, Optionee hereby acknowledges and agrees to execute a Stock Restriction Agreement (or other agreement restricting Optionee’s rights in the Shares acquired or to be acquired by
the exercise of this Option), if required by the Company, by and between Optionee, the Company and/or one or more other holders of equity securities of the Company in the form, if any, that the Company provides at the time of exercise and as may be
amended by the Company in its sole discretion from time to time. 
 5.       Termination of
Relationship with the Company. 
 (a)       Voluntary Termination. If the Optionee
terminates his or her employment with the Company for any reason other than death or Disability, the Option (to the extent exercisable at the time of such termination) may be exercised at any time within ninety (90) days after the date of such
termination. To the extent that the Option is not exercisable at the time of such termination, or to the extent the Option is not exercised within the time specified herein, the Option shall terminate. 

(b)       Disability. If the Optionee’s employment by the Company terminates due to Disability,
the Option (to the extent exercisable at the time of such termination) may be exercised by the Optionee or his or her legal guardian or representative at any time within twelve (12) months after such termination. To the extent that the Option
is not exercisable on the date of termination, or to the extent the Option is not exercised within the time specified herein, the Option shall terminate. 
 (c)       Death. If the Optionee’s employment by the Company terminates due to his or her death, the Option (to the extent exercisable at the time of such death)
will remain exercisable for twelve (12) months after the date of death by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance. To the extent that the Option is not exercisable on the
date of death, or to the extent the Option is not exercised within the time specified herein, the Option shall terminate. 

  
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 (d)       Termination Without Cause. If the Company
terminates Optionee’s employment with the Company without Cause, the Option (to the extent exercisable at the time of such termination) may be exercised at any time within ninety (90) days after the date of such termination. To the extent
that the Option is not exercisable at the time of such termination, or to the extent the Option is not exercised within the time specified herein, the Option shall terminate. 
 (e)       Termination for Cause. If the Company terminates Optionee’s employment with the Company for Cause, the Option will then terminate immediately and
automatically, and the Optionee shall have no further rights therein. 
 Notwithstanding any other provision of this Section 5, the Option
shall not be exercisable after the expiration of the term set forth in Section 2 hereof. 
 6.
      Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated, gifted, transferred or disposed of in any manner either voluntarily or involuntarily by operation of law, other than
by will or by the laws of descent or distribution. During the Optionee’s lifetime, this Option is exercisable only by the Optionee (or by such Optionee’s legal guardian or representative as provided in Section 5). Subject to the
foregoing and the terms of the Plan, the terms of this Option will be binding upon the executors, administrators, legal guardians, representatives and heirs of the Optionee, meaning for purposes of this Award Agreement, both testamentary heirs and
heirs by intestacy. 
 7.       No Continuation of Employment or Engagement. Neither the
Plan nor this Option shall confer upon any Optionee any right to continue in the service of the Company or any of its Subsidiaries or limit, in any respect, the right of the Company to discharge the Optionee at any time, with or without Cause and
with or without notice. 
 8.       Lock-Up Agreement. Each Optionee hereby agrees that, in
connection with any registration of the offering of any securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”) for the account of the Company, if so requested by the Company, such Optionee shall not
sell or otherwise transfer any securities of the Company during the period specified by the Board of Directors (the “Market Standoff Period”), with such period not to exceed 180 days following the effective date of a registration statement
of the Company filed under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period. The provisions of this Section 8
shall be binding upon any transferee or assignee of any Shares. 
 9.       Withholding.
The Company reserves the right to withhold, in accordance with any applicable laws, from any consideration payable or property transferable to Optionee any taxes required to be withheld by federal, state or local law as a result of the grant or
exercise of this Option or the sale or other disposition of the Shares. If the amount of any consideration payable to the Optionee is insufficient to pay such taxes or if no consideration is payable to the Optionee, upon the request of the Company,
the Optionee (or such other person entitled to exercise this Option pursuant to Section 5 hereof) will pay to the Company an amount sufficient for the Company to satisfy any federal, state or local tax withholding requirements applicable to


  
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and as a condition to the grant or exercise of this Option or the sale or other disposition of the Shares issued upon the exercise of this Option. 

10.       The Plan. The Optionee has received a copy of the Plan (a copy of which is attached
hereto), has read the Plan and is familiar with its terms, and hereby accepts the Option subject to all of the terms and provisions of the Plan, as amended from time to time. Pursuant to the Plan, the Board or its Committee is authorized to
interpret the Plan and to adopt rules and regulations not inconsistent with the Plan as it deems appropriate. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or its Committee upon
any questions arising under the Plan. 
 11.       Spousal Consent. As a condition to the
effectiveness of the grant of the Option, the Optionee’s spouse (if any) is required to execute the attached “Consent of Spouse.” 
 12.       Governing Law. This Award Agreement will be construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to the application of
the principles of conflicts of laws. 
 13.       Amendment. Subject to the provisions of
the Plan, this Award Agreement may be amended at any time by the Company or its delegate; provided, however, that any modification or amendment of this Award Agreement which adversely affects the Optionee shall require the written consent of the
Optionee. 
 14.       Entire Agreement. This Award Agreement, together with the Plan and
the other exhibits attached thereto or hereto, represents the entire agreement between the parties hereto relating to the subject matter hereof, and merges and supersedes all prior and contemporaneous discussions, agreements and understandings of
every nature relating to the award of Options to Optionee by the Company. 
 [Signature page follows] 

  
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 IN WITNESS WHEREOF, this Award Agreement has been executed by the
parties on the 23rd day of May, 2012. 

 

			
	FIVE BELOW, INC.
		
	By:	 	/s/ David Schlessinger
	 Name:
	 	David Schlessinger
	Title:	 	Executive Chairman
	
	DAVID JOHNSTON
	
	/s/ David Johnston
	Signature


 THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE NOT BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED OR DISPOSED OF, BY GIFT OR OTHERWISE, OR IN ANY WAY ENCUMBERED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR A
SATISFACTORY OPINION OF COUNSEL SATISFACTORY TO FIVE BELOW, INC. THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND UNDER APPLICABLE STATE SECURITIES LAWS. 

  
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 ACKNOWLEDGMENT 
 The Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and represents that he or she has read and is familiar with the terms and provisions thereof and hereby accepts
this Option subject to all of the terms and provisions of the Award Agreement and the Five Below, Inc. Equity Incentive Plan (the “Plan”). The Optionee hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board or the Committee upon any questions arising under the Plan. 
  

							
				
	Date: June 4, 2012	 		 		 	/s/ David Johnston
		 		 		 	Signature of Optionee
				
		 		 		 	David Johnston
		 		 		 	Name of Optionee

  

  
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 CONSENT OF SPOUSE 

I, Michelle Leonatti, spouse of David Johnston, have read the foregoing Non-Qualified Stock Option Agreement (the
“Agreement”). I am aware by the terms of the Agreement, among other things, my spouse agrees to sell certain of his/her shares of the capital stock of the Company, including my community property or other interest therein (if any),
upon certain events and that transfer of such shares is otherwise restricted. I hereby consent to such sale and to such restrictions, approve of the provisions of the Agreement, and agree that if I pre-decease my spouse, the successors of my
community property or other interest (if any) in such shares will hold such shares subject to the provisions of the Agreement. In consideration of the grant of shares of FIVE BELOW, INC. as set forth in that Agreement, I hereby appoint my spouse as
my attorney-in-fact with respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital property. 
  

	
	
	Michelle Leonatti
	SIGNATURE OF SPOUSE
	
	
	June 4, 2012
	DATE



  
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