Amendment No. 4 to Employment and Non-Competition Agreement - Archbold



 Exhibit 10.3 
 AMENDMENT NO. 4 TO EMPLOYMENT AND NON-COMPETITION AGREEMENT 
 THIS AMENDMENT NO. 4
TO EMPLOYMENT AND NON-COMPETITION AGREEMENT, (this “Agreement”) is made as of March 29, 2012, by and among Michael G. Archbold (“Executive”), Vitamin Shoppe, Inc., a Delaware corporation, (“Parent”) and
Vitamin Shoppe Industries Inc., a New York corporation (the “Company”). 
 Reference is made to that certain Employment and
Non-Competition Agreement by and between Executive, Parent and Company dated April 16, 2007, as amended by that certain Amendment to Employment and Non-Competition Agreement dated December 28, 2007, that certain Amendment No. 2 to
Employment and Non-Competition Agreement dated September 25, 2009 and that certain Amendment No. 3 to Employment and Non-Competition Agreement dated February 28, 2011 (the “Employment Agreement”). 

WHEREAS, the parties to this Agreement desire to further amend the Employment Agreement as provided herein; 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 
 1. As used in the Employment
Agreement the term: 
 (a) “Parent” is hereby deemed to refer to Vitamin Shoppe, Inc., a Delaware corporation and
successor in merger of VS Parent, Inc. into VS Holdings Inc.; and 
 (b) “Company” is hereby deemed to refer to
Vitamin Shoppe Industries Inc., a New York corporation. 
 2. Section 1 of the Employment Agreement is hereby amended by deleting the
phrase “, VS Direct” in the second and fourth lines thereof 
 3. Section 2(A) of the Employment Agreement is hereby amended by
deleting the word “first” in the penultimate sentence thereof and inserting the word “next” therefor. 
 4.
Section 2(B) of the Employment Agreement is hereby amended and restated in its entirety as follows: 
 “(B) Bonus
and Equity Incentive Compensation. For each calendar year during the term of this Agreement, the Executive shall be eligible for a cash bonus award (the “Annual Cash Bonus”) with a target amount of seventy percent (70%) of his
then current base salary pursuant to the Company’s then current Management Incentive Program (“MIP”). As currently constituted the MIP is based upon (i) the Company’s satisfaction of operating objectives specified by the
Company’s Board of Directors each year in its sole discretion, and (ii) individual members of management’s satisfaction of certain individual operating objectives based upon their area of responsibility as specified by the
Company’s Board of Directors and Chief Executive Officer in their sole discretion. The Executive acknowledges that the Company 







 
reserves the right to change the structure of the MIP from time to time, provided that any change will not affect Executive’s ability to receive an Annual Cash Bonus of up to a target amount
of seventy percent (70%) of the Executive’s base salary. The Executive shall be paid his Annual Cash Bonus on or before March 1st of the calendar year following the year to which such bonus relates, but in all events on or before
March 15th of such year. The parties acknowledge that the determination of the Annual Cash Bonus for the year in which the Executive’s employment terminates (and possibly for the prior year) shall not be known on the date the
Executive’s employment terminates, and, if any, shall be paid by the Company to the Executive not more than thirty (30) days after the determination thereof, but in all events on or before March 15th of the calendar year following the
calendar year of termination.” 
 5. The following sentence is added to the end of Section 2(D) of the Employment Agreement:

 “All reimbursements under this Section 2(D) shall be made as soon as practicable following submission of a
reimbursement request, but no later than the end of the year following the year during which the underlying expense was incurred.” 
 6. A
new section 2(F) is hereby added to the Employment Agreement, to read in its entirety as follows: 
 “(F) Forfeiture and
Repayment. The Executive agrees and acknowledges that amounts and awards payable pursuant to this Agreement or any bonus or incentive plan are subject to forfeiture and recoupment and may be cancelled without payment and/or a demand for
repayment of any amounts or gains realized may be made upon the Executive on the basis of the Parent’s or the Company’s forfeiture and recoupment policies, or on the basis of any of the following circumstances: (i) if during the
course of employment the Executive engages in conduct that is (x) materially adverse to the interest of the Parent or the Company, which include failures to comply with the Parent’s and the Company’s written rules or regulations and
material violations of any agreement with the Parent or the Company, (y) fraud, or (z) conduct contributing to any financial restatements or irregularities; (ii) if during the course of employment, the Executive competes with, or
engages in the solicitation and/or diversion of customers or employees of, the Parent or the Company; (iii) if following termination of employment, the Executive violates any post-termination obligations or duties owed to, or any agreement
with, the Parent or the Company, which includes this Agreement and other agreements restricting post-employment conduct; and (iv) if compensation that is promised or paid to the Executive is required to be forfeited and/or repaid to the Parent
or the Company pursuant to applicable regulatory requirements as in effect from time to time and/or such forfeiture or repayment affects amounts or benefits payable under this Agreement or other plan or arrangement.” 

7. Section 3 of the Employment Agreement is hereby amended and restated in its entirety as follows: 

“3. Term. The term of the Executive’s employment hereunder shall commence on the Effective Date and shall terminate on
April 15, 2013 (the “Initial Term”), unless earlier terminated as provided in Section 5 of this Agreement. Following the Initial Term, this Agreement and the Executive’s employment hereunder shall automatically renew for up
to two 







 
(2) successive one (1) year periods (each a “Renewal Term”), unless either the Company or the Executive shall notify the other in writing not later than sixty (60) days prior
to the end of the Initial Term or the then current Renewal Term that such party elects for this Agreement and the Executive’s employment hereunder to terminate at the end of the Initial Term or such Renewal Term, as applicable; provided,
however, that each Renewal Term shall be subject to earlier termination as provided in Section 5 of this Agreement. 
 8.
Section 5(A) of the Employment Agreement is hereby amended and restated in its entirety as follows: 
 “(A) At the
Executive’s Option. The Executive may terminate his employment at any time upon at least ninety (90) days’ advance written notice to the Company. In such event, the Executive shall be entitled to no severance or other termination
benefits from and after the termination of his employment, except as provided in Section 5(I) hereof.” 
  

	9.	Section 5(C) of the Employment Agreement is hereby amended and restated in its entirety as follows: 


“(C) At the Election of the Company for Reasons Other than With Cause. The Company may, unilaterally, terminate the
Executive’s employment hereunder at any time during the term of this Agreement without cause upon five (5) business days prior written notice to the Executive of the Company’s election to terminate. Upon a termination (I) under
this Section 5(C), (II) due to the expiration of the Initial Term or Renewal Term due to a non-extension of the Agreement by the Company pursuant to the provisions of Section 3, or (III) due to the expiration of the second Renewal Term
pursuant to the provisions of Section 3 (i.e., April 15, 2015), the Company shall provide the applicable Severance Pay as defined and specified in the Parent’s Executive Severance Pay Policy (the “Policy”), as may be amended
from time to time, payable upon a termination of Executive’s employment by the Company other than for “cause”, as defined in the Policy, together with the following additional item: 

(i) Subject to the Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”), until the earlier to occur of (x) a period of twelve (12) months from the date of termination of Executive’s employment, and (y) the time when the Executive becomes eligible for insurance
coverage offered by any subsequent employer (the “Insurance Continuation Period”), allow the Executive to continue to participate in all life, health, disability and similar insurance plans and programs of the Company to the extent that
such continued participation is possible under the general terms and provisions of such plans and programs, with the Company and the Executive paying the same portion of the cost of each such plan or program as existed at the time of the
Executive’s termination. In the event that the Executive’s continued participation in any group plans and programs is not permitted, then in lieu thereof, the Company shall acquire, with the same cost of sharing, individual insurance
policies providing comparable coverage for the Executive for the Insurance Continuation Period; provided, that the Company shall not be obligated to pay for any such individual coverage more than three (3) times the Company’s cost of such
group coverage.” 







 10. Section 5(D) of the Employment Agreement is hereby amended and restated in its entirety as follows:

 “(D) At the Election of the Executive for Certain Reasons. The Executive may terminate his employment upon
written notice to the Company if, upon the occurrence of a Change in Control, as defined in the Policy, or within two years after a Change in Control, the Executive experiences an Adverse Change in Status, as defined in the Policy, without his
written consent, which is not remedied within thirty (30) days after which the Executive gives written notice to the Board of Directors of the same. In order to exercise his right to terminate his employment under this Section 5(D), the
Executive must provide written notice to the Board of Directors within ninety (90) days of such change. If the Executive exercises his right to terminate his employment under this Section 5(D), the Company shall provide the applicable
Severance Pay as defined and specified in the Policy, as may be amended from time to time, payable upon a termination by the Executive due to an Adverse Change in Status.” 
 11. The following sentence is added to the end of Section 5(H) of the Employment Agreement: 
 “All reimbursements under this Section 5(H) shall be made as soon as practicable following submission of a reimbursement request, but no later than the end of the year following the year during
which the underlying expense was incurred.” 
 12. Section 5(J) of the Employment Agreement is hereby amended and restated in its
entirety as follows: 
 “(J) Company’s Obligation. The Company’s obligation to make the severance payments
and provide benefits in each case required under Section 5 is conditioned upon the Executive’s compliance with (i) the provisions of the Policy, including without limitation the execution and delivery to the Company of a general
release as provided therein and compliance with covenants set forth therein, (ii) continued observance in all material respects of the covenants contained in Sections 6, 7, 8 and 9 of this Agreement, and is subject to recoupment and forfeiture
pursuant to the Parent’s and the Company’s recoupment and forfeiture policies, as may be in effect from time to time, and as provided herein.” 
 13. Section 5(K) of the Employment Agreement is hereby deleted in its entirety and replaced with the placeholder title “5(K) Reserved.” 

14. Section 5(L) of the Employment Agreement is hereby amended and restated in its entirety as follows: 

“(L) Partial Year Bonus. If the Executive’s employment is terminated pursuant to either of Section 5(E) or
Section 5(F) after more than one-half (1/2) of the calendar year shall have transpired, the Company shall pay to the Executive at the time specified below the Fraction (hereinafter defined) times the portion of the Annual Cash Bonus based
upon Executive’s salary and maximum bonus percentage at that time that is attributable to the performance of the Company as a whole, but not any portion thereof that is attributable to the performance of the Executive and/or a portion of the
Company of which the Executive is a part. The numerator of the Fraction shall be the number of months (including any fractional month as a full month) that the Executive was an employee of the Company during such calendar year, minus six (6), and
the denominator of the Fraction shall be six (6). As an example, if the Executive’s employment with the Company is terminated in the first week of the tenth (10th) month, the Fraction shall be








 
four-sixths (4/6), determined as follows: (x) ten (10) minus six (6), divided by (y) six (6). Any payment on account of a partial year bonus shall be made at the same time as
payment is made to other executives of the Company under the MIP as stated in Section 2(B). If in connection with or following the termination of the Executive’s employment the Company shall amend the MIP and the Executive is entitled to
benefits under either of Section 5(E) or Section 5(F) hereof, the amount of the Annual Cash Bonus to be paid thereunder shall equal the amount determined under the MIP as the same existed prior to the amendment thereof. 

15. Section 5(M) of the Employment Agreement is hereby deleted in its entirety. 
 16. Section 11 of the Employment Agreement is hereby amended and restated in its entirety as follows: 
 11. Excise Taxes. Notwithstanding any other provision of this Agreement to the contrary, if any payment or benefit the Executive would receive from the Company or under this Agreement or otherwise
(including, without limitation, any payment, benefit, entitlement or distribution paid or provided by the person or entity effecting the change in control) in connection with a change of control (the “Total Payments”) (a) constitute
“parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 11, would be subject to the excise tax imposed by Section 4999 of the Code, then the Executive will be entitled to
receive either (i) the full amount of the Total Payments (taking into account the full value of the equity awards), or (ii) a portion of the Total Payments having a value equal to $1 less than three (3) times the Executive’s
“base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of clauses (i) and (ii), after taking into account applicable federal, state, and local income and employment taxes and the excise tax
imposed by Section 4999 of the Code, results in the receipt by the Executive, on an after-tax basis, of the greatest portion of the Total Payments. Any determination required under this Section 11 shall be made in writing by the
independent public accountants of the Company (the “Accountants”), whose determination shall be conclusive and binding for all purposes upon the Company and the Executive. For purposes of making the calculations required by this
Section 11, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code. If there is a
reduction pursuant to this Section 11 of the Total Payments to be delivered to the Executive, such reduction shall occur in the following order: (i) any cash severance payable by reference to the Executive’s base salary or annual
bonus, (ii) any other cash amount payable to the Executive, (iii) any benefit valued as a “parachute payment,” and (iv) acceleration of vesting of any equity award This Section 11 shall not apply, however, to any
payment or benefit if the application of Section 280G(b)(5) of the Code to such payment or benefit results in such payment or benefit not constituting a parachute payment under Section 280G(b)(2). For the avoidance of doubt, in the event
additional Total Payments are made to the Executive after the application of the cutback in this Section 11, which additional Total Payments result in the cutback no longer being applicable, the Company shall pay the Executive an additional
amount equal to the value of the Total Payments which were originally cutback. The Company shall determine at the end of each calendar year whether any such restoration is necessary based on additional Total Payments (if any) made during such
calendar year, and shall pay such restoration within seventy five (75) days of the last day of such calendar year. For purposes of determining the order of reduction of amounts payable under the Policy, the order of reduction specified therein
shall govern the reduction of such amounts and, if and to the extent not addressed therein, shall be reduced in accordance with the foregoing.” 







 17. Section 13 of the Employment Agreement is hereby amended as follows: 

(a) the phrase “Parent or Holdings” is hereby deleted and replaced with the phrase “or Parent” in the third and
fourth lines thereof; and 
 (b) the phrase “Parent and Holdings” is hereby deleted and replaced with the phrase
“and Parent” in the fifth line thereof. 
 18. Section 21 of the Employment Agreement is hereby amended and restated in its
entirety as follows: 
 21. “Notices. Unless otherwise stated, all notices hereunder shall be (i) delivered by
hand, (ii) sent by first-class certified mail, postage prepaid, return receipt requested, or (iii) delivered by overnight commercial courier, to the following address of the party to whom such notice is to be made, or to such other address
as such party may designate in the same manner provided herein: 
 If to the Company or Parent: 

Vitamin Shoppe Industries Inc. 
 2101 91st Street 
 North Bergen, New Jersey 07047 

Attention: Chief Executive Officer 
 with a copy to: 
 Vitamin Shoppe Industries Inc. 

2101 91st Street 

North Bergen, NJ 07047 
 Attention: General Counsel 
 If to the Executive: to the Executive’s last
known address on the records of the Company.” 
 19. Section 22 of the Employment Agreement is hereby amended by deleting the phrase
“, Holdings” from the third line thereof. 
 20. Section 24 of the Employment Agreement is hereby amended and restated in its
entirety as follows: 
 24. “Use of the Term “Company”. The term Company as used herein shall mean Company
and/or Parent and any subsidiaries of Company, unless the context shall dictate otherwise, and the obligations of Company and Parent hereunder shall be joint and several.” 







 21. Section 25(B) of the Employment Agreement is amended by deleting the phrase “(i) the
expiration of the six (6)-month period measured from” in the twelfth line thereof and inserting the phrase “(i) the first day of the seventh month following” therefor. 
 22. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Employment Agreement. 
 23. This Agreement is an amendment to the Employment Agreement, and to the extent there is a discrepancy between this Agreement and the Employment Agreement, this Agreement shall control and supersede the
Employment Agreement to the extent of such discrepancy. The Employment Agreement otherwise remains in full force and effect. 
 24. This
Agreement, the Employment Agreement (as further amended by this Agreement), and those documents expressly referred to herein embody the complete agreement and understanding among the parties and supersede and preempt and prior understandings,
agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. 
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 [SIGNATURE PAGE FOLLOWS] 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 

 

	
	 /s/ Michael G. Archbold

	Executive: Michael G. Archbold
	
	VITAMIN SHOPPE, INC.
	(successor in merger of VS Parent, Inc. into VS Holdings Inc.)


			
		
	By:	 	 /s/ James M. Sander

	Name: James M. Sander
	Its: Vice President and General Counsel


			
	
	 VITAMIN SHOPPE INDUSTRIES INC.

		
	By:	 	 /s/ James M. Sander

	 Name: James M. Sander
 Its: Vice President and General Counsel