Common use of Performance Options Clause in Contracts

Performance Options. As of January 7, 2002, the Company shall grant the Executive a 10-year option to purchase an aggregate of 525,000 shares of Stock (the "Performance Option"), which may be granted under the terms of the Company's stock option plans, or outside the terms of such plans, with terms and conditions consistent in all respects with the provisions of this Agreement and otherwise substantially the same as those granted under the Company's stock option plans. The Performance Option shall be divided into three tranches, with each tranche consisting of 1/3 of the Performance Option shares and each tranche being subject to the performance requirements described below: (i) The performance requirement with respect to the first tranche, covering 1/3rd of the Performance Options, shall be based upon the Company's achieving a target level of earnings per share to be established by the Committee, which target must be attained by the Company for any four consecutive fiscal quarters of the Company ending on or before January 31, 2004; (ii) The performance requirement with respect to the second tranche, covering 1/3rd of the Performance Options, shall be based upon the Company's achieving the "Inventory Turnover" target established and administered by the Committee for purposes of the Company's Long-Term ELT Performance Share Plan for the performance period ending as of January 31, 2004; and (iii) The performance requirement with respect to the third tranche, covering 1/3rd of the Performance Options, shall be based upon the Company's achieving the "Customer Super Service Index" target established and administered by the Committee for purposes of the Company's Long-Term ELT Performance Share Plan for the performance period ending as of January 31, 2004. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the calculation of earnings per share, or any other performance objective established hereunder, such adjustments and other substitutions shall be made to the performance requirements established hereunder as the Committee in its sole discretion deems equitable or appropriate. Any tranche of the Performance Option for which the applicable performance requirement shall have been satisfied shall become vested and exercisable in three equal installments, each relating to one third of the number of shares covered by such tranche, on each of January 31, 2004, 2005 and 2006, provided the Executive remains employed by the Company on the applicable vesting date. Notwithstanding the failure to satisfy the requirements set forth in the preceding sentence: (i) In the case of a termination of employment that occurs on or prior to January 30, 2004, all tranches of the Performance Option shall also become vested and exercisable if, under the circumstances of the Executive's termination of employment or if there is a Change in Control, any other options then held by him become vested and exercisable, or would have become vested and exercisable if such options were not then already vested and exercisable, in accordance with the provisions of Section 9 hereof (an "Acceleration Event"); and (ii) In the case of an Acceleration Event that occurs after January 30, 2004 and prior to January 31, 2006, any tranche of the Performance Option as to which the applicable performance requirement has been satisfied as of January 31, 2004 shall also become vested and exercisable. All tranches of the Performance Option for which the applicable performance requirement shall not have been satisfied as of January 31, 2004 shall nevertheless become vested and exercisable on the ninth (9th) anniversary of the Grant Date, provided the Executive remains employed by the Company on such date (notwithstanding the provisions of Section 9 hereof, which shall not apply after January 31, 2004 to accelerate the vesting of any particular tranche of the Performance Option to the extent the performance conditions relating to such tranche were not satisfied as of January 31, 2004, except in the circumstances set forth in Section 9(e)). Notwithstanding anything to the contrary in this Section 6(c) or in the 1997 Long-Term Equity Compensation Plan, as amended (the "1997 Plan"), if the Executive violates the provisions of Section 10 hereof, the Performance Option shall immediately terminate and regardless of whether the Performance Option has been earned or vested shall be cancelled. As soon as practicable following the date hereof, the Company and the Executive will enter into a stock option agreement with terms and conditions consistent in all respects with the provisions of this Section 6(c) and this Employment Agreement and otherwise substantially the same as nonqualified stock options granted under the terms of the Company's 1997 Plan.

Performance Options. As of January 7December 3, 20022001, the Company shall grant the Executive a 10-year option to purchase an aggregate of 525,000 shares of Stock (the "Performance Option"), which may be granted under the terms of the Company's stock option plans, or outside the terms of such plans, with terms and conditions consistent in all respects with the provisions of this Agreement and otherwise substantially the same as those granted under the Company's stock option plans. The Performance Option shall be divided into three tranches, with each tranche consisting of 1/3 of the Performance Option shares and each tranche being subject to the performance requirements described below: (i) The performance requirement with respect to the first tranche, covering 1/3rd of the Performance Options, shall be based upon the Company's achieving a target level of earnings per share to be established by the Committee, which target must be attained by the Company for any four consecutive fiscal quarters of the Company ending on or before January 31, 2004; (ii) The performance requirement with respect to the second tranche, covering 1/3rd of the Performance Options, shall be based upon the Company's achieving the "Inventory Turnover" target established and administered by the Committee for purposes of the Company's Long-Term ELT Performance Share Plan for the performance period ending as of January 31, 2004; and (iii) The performance requirement with respect to the third tranche, covering 1/3rd of the Performance Options, shall be based upon the Company's achieving the "Customer Super Service Index" target established and administered by the Committee for purposes of the Company's Long-Term ELT Performance Share Plan for the performance period ending as of January 31, 2004. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the calculation of earnings per share, or any other performance objective established hereunder, such adjustments and other substitutions shall be made to the performance requirements established hereunder as the Committee in its sole discretion deems equitable or appropriate. Any tranche of the Performance Option for which the applicable performance requirement shall have been satisfied shall become vested and exercisable in three equal installments, each relating to one third of the number of shares covered by such tranche, on each of January 31, 2004, 2005 and 2006, provided the Executive remains employed by the Company on the applicable vesting date. Notwithstanding the failure to satisfy the requirements set forth in the preceding sentence: (i) In the case of a termination of employment that occurs on or prior to January 30, 2004, all tranches of the Performance Option shall also become vested and exercisable if, under the circumstances of the Executive's termination of employment or if there is a Change in Control, any other options then held by him become vested and exercisable, or would have become vested and exercisable if such options were not then already vested and exercisable, in accordance with the provisions of Section 9 hereof (an "Acceleration Event"); and (ii) In the case of an Acceleration Event that occurs after January 30, 2004 and prior to January 31, 2006, any tranche of the Performance Option as to which the applicable performance requirement has been satisfied as of January 31, 2004 shall also become vested and exercisable. All tranches of the Performance Option for which the applicable performance requirement shall not have been satisfied as of January 31, 2004 shall nevertheless become vested and exercisable on the ninth (9th) anniversary of the Grant Date, provided the Executive remains employed by the Company on such date (notwithstanding the provisions of Section 9 hereof, which shall not apply after January 31, 2004 to accelerate the vesting of any particular tranche of the Performance Option to the extent the performance conditions relating to such tranche were not satisfied as of January 31, 2004, except in the circumstances set forth in Section 9(e)). Notwithstanding anything to the contrary in this Section 6(c) or in the 1997 Long-Term Equity Compensation Plan, as amended (the "1997 Plan"), if the Executive violates the provisions of Section 10 hereof, the Performance Option shall immediately terminate and regardless of whether the Performance Option has been earned or vested shall be cancelled. As soon as practicable following the date hereof, the Company and the Executive will enter into a stock option agreement with terms and conditions consistent in all respects with the provisions of this Section 6(c) and this Employment Agreement and otherwise substantially the same as nonqualified stock options granted under the terms of the Company's 1997 Plan.