Exhibit 10.2
FORM OF
STOCK OPTION AGREEMENT
UNDER
THE XXXXX XXXXXX COMPANIES INC.
FISCAL 2002 SHARE INCENTIVE PLAN (THE "PLAN")
The within STOCK OPTION AGREEMENT provides for the granting of
options by The Xxxxx Xxxxxx Companies Inc., a Delaware corporation (the
"Company"), to the participant, an employee of the Company or one of its
subsidiaries (the "Employee"), to purchase shares of the Company's Class A
Common Stock, par value $0.01 (the "Shares"), on the terms and subject to the
conditions hereinafter provided. The name of the "Participant", the "Grant
Date", the aggregate number of Shares that may be purchased pursuant to this
agreement, and the "Exercise Price" per Shares are stated in the attached
"Notice of Grant", and incorporated herein by reference. The other terms and
conditions of the Options are stated in this agreement and in the Plan.
The Stock Options described herein are being granted pursuant to the
Company's Fiscal 2002 Share Incentive Plan, as may be amended from time to time
(the "Plan"), and are subject in all respects to the provisions of the Plan. The
Stock Options granted hereunder are not Incentive Stock Options (as defined in
Section 422(b) of the Internal Revenue Code of 1986, as amended).
1. PAYMENT OF EXERCISE PRICE. The Company will provide and
communicate to the Employee various methods of exercise. These methods may
include the ability to receive Shares of Class A Common Stock of the Company or
cash at exercise. To facilitate exercise, the Company may enter into agreements
for coordinated procedures with one or more brokerage firms or financial
institutions.
2. EXERCISE PERIOD.
a. General. Subject to other provisions contained herein and in
the Plan, Stock Options granted hereunder shall be exercisable in installments
as specified under "Exercise Period" in the attached "Notice of Grant".
Subject to the last sentence of Paragraph 2b, no Stock Option awarded
hereunder shall be exercisable later than ten (10) years after the Grant Date.
b. Death or Disability. In the event of the Employee's death or
the occurrence of the Employee's total and permanent disability (as such status
shall be determined under the Company's long term disability program), each
Stock Option awarded but not yet exercisable as of the date of death or the
determination of such disability, shall become immediately exercisable. Each
Stock Option awarded (i) in the case of death may be exercised for a period
commencing as of the day after the date of death and continuing for one year
thereafter and (ii) in the case of permanent disability, for a period commencing
as of the day after determination of such disability and continuing through the
earlier to occur of the first anniversary of such determination or the tenth
anniversary of the Grant Date.
c. Retirement. Subject to Paragraph 3, in the event of Employee's
formal retirement under the terms of the Xxxxx Xxxxxx Inc. Retirement Growth
Account Plan (or an affiliate or a successor plan or program of similar
purpose), each Stock Option awarded but not yet exercisable as of the date of
retirement shall become immediately exercisable. Each Stock Option awarded may
thereafter be exercised until the tenth anniversary of the Grant Date.
d. Termination of Employment Without Cause.
(1) Subject to Paragraph 3, in the event Employee is
terminated at the instance of the Employee (e.g., resigns voluntarily), each
Stock Option exercisable but unexercised as of the effective date of such
termination may be exercised until the first to occur of (i) the date which
shall be ninety (90) days after the effective date of such termination and (ii)
the tenth anniversary of the Grant Date. Each Stock Option awarded but
unexercisable as of the date of such termination shall be forfeited as of such
date.
(2) Subject to Paragraph 3, in the event Employee is
terminated at the instance of the Company or relevant subsidiary without Cause
(as defined below), each Stock Option awarded but unexercisable as of the date
of termination shall become immediately exercisable. Each Stock Option awarded
may be exercised until the first to occur of (i) the date which shall be ninety
(90) days after the effective date of such termination and (ii) the tenth
anniversary of the Grant Date. For purposes hereof, "Cause" means any breach by
the Employee of any of his or her material obligations under any Company policy
or procedure, including, without limiting the generality, the Code of Corporate
Conduct and the Policy on Avoidance of Xxxxxxx Xxxxxxx.
3. POST-EMPLOYMENT EXERCISES. No Stock Option represented by this
Agreement may be exercised after termination of the Employee's employment with
the Company (or any of its subsidiaries) unless as provided for in Paragraph 2b,
2c or 2d hereof. The exercise of any Stock Option after termination of the
Employee's employment by reason of retirement as provided in Paragraph 2c or by
reason of termination by the Employee or termination by the Company or relevant
subsidiary without Cause as provided in Paragraph 2d shall be subject to
satisfaction of the conditions precedent that the Employee neither (i) competes
with, or takes other employment with or renders services to a competitor of, the
Company, its subsidiaries or affiliates without the written consent of the
Company, nor (ii) conducts herself or himself in a manner adversely affecting
the Company. All Stock Options that may not be exercised after termination of
the Employee's employment shall be forfeited.
4. ADJUSTMENT PROVISIONS; CHANGE IN CONTROL.
a. If there shall be any change in the Class A Common Stock of
the Company, through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split, split up, spin-off,
combination of Shares, exchange of Shares, dividend in kind or other like change
in capital structure or distribution (other than normal cash dividends) to
stockholders of the Company, an adjustment shall be made to each outstanding
Stock Option such that each such Stock Option shall thereafter be exercisable
for such securities, cash and/or other property as would have been received in
respect of the Class A Common Stock subject to such Stock Option had it been
exercised in full immediately prior to such change or distribution, and such an
adjustment shall be made successively each time any such change shall occur. In
addition, in the event of any such change or distribution, in order to prevent
dilution or enlargement of the Employee's rights hereunder, the Company will
have authority to adjust, in an equitable manner, the number and kind of Shares
that may be issued with respect to any Stock Option hereunder, the number and
kind of Shares subject to outstanding Stock Options, the exercise price
applicable to outstanding Stock Options, and the Market Value (as herein after
defined) and other value determinations applicable to outstanding Stock Options.
Appropriate adjustments may also be made by the Company in the terms of any
Stock Options to reflect such changes or distributions and to modify any other
terms of outstanding Stock Options on an equitable basis. In addition, the
Company is authorized to make adjustments to the terms and conditions of Stock
Options, in recognition of unusual or nonrecurring events affecting the Company
or the financial statements of the Company, or in response to changes in
applicable laws, regulations, or accounting principles. For purposes of this
Paragraph 4, the Market Value of the Shares shall be equal to 100% of the
closing price of the Class A Common Stock on the New York Stock Exchange (or, if
not traded thereon, then on any other national securities exchange or other
market system on which the Class A Common Stock is then traded on) as reported
by the Wall Street Journal for the date on which such Market Value is being
fixed, or, if there shall be no trading on such date, the date next preceding on
which trading occurred.
b. Notwithstanding any other provision hereunder, if there is a
Change in Control of the Company, all then outstanding Stock Options shall
immediately become exercisable. For purposes of this Paragraph 4b, a "Change in
Control" of the Company shall be deemed to have occurred upon any of the
following events:
(i) A change in control of the direction and administration of
the Company's business of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act; or
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(ii) During any period of two (2) consecutive years, the
individuals who at the beginning of such period constitute the
Company's Board of Directors or any individuals who would be
"Continuing Directors" (as hereinafter defined) cease for any reason
to constitute at least a majority thereof; or
(iii) The Company's Class A Common Stock shall cease to be
publicly traded; or
(iv) The Company's Board of Directors shall approve a sale of all
or substantially all of the assets of the Company, and such
transaction shall have been consummated; or
(v) The Company's Board of Directors shall approve any merger,
consolidation, or like business combination or reorganization of the
Company, the consummation of which would result in the occurrence of
any event described in Paragraph 4b (ii) or (iii) above, and such
transaction shall have been consummated.
Notwithstanding the foregoing, (A) changes in the relative beneficial
ownership among members of the Lauder family and family-controlled entities
shall not, by itself, constitute a Change in Control of the Company, and (B) any
spin-off of a division or subsidiary of the Company to its stockholders shall
not constitute a Change in Control of the Company
For purposes of this Paragraph 4b, "Continuing Directors" shall mean
(x) the directors of the Company in office on July 26, 2001 and (y) any
successor to any such director and any additional director who after such date
was nominated or selected by a majority of the Continuing Directors in office at
the time of his or her nomination or selection.
5. WITHHOLDING. All payments or distributions of Stock Options made
hereunder of Shares covered by Stock Options shall be net of any amounts
required to be withheld pursuant to applicable federal, national, state and
local tax withholding requirements imposed by each taxing authority having
jurisdiction. The Company (or relevant subsidiary) may require the Employee to
remit to it an amount sufficient to satisfy such tax withholding requirements
prior to the delivery of any certificates for such Shares. The Company (or
relevant subsidiary) may, in its discretion and subject to such rules as it may
adopt (including any as may be required to satisfy applicable tax and/or non-tax
regulatory requirements), permit the Employee to pay all or a portion of the
federal, national, state and local withholding taxes arising in connection with
any Stock Option by electing to have the Company (or relevant subsidiary)
withhold Shares of Class A Common Stock having a Market Value equal to the
amount to be withheld, such tax calculated at rates required by statute or
regulation.
6. TRANSFERABILITY. Stock Options covered by this Agreement may be
transferred pursuant to the laws of descent and distribution or, during
Employee's lifetime solely to the Employee's spouse, siblings, parents, children
and grandchildren or trusts for the benefits of such persons, or partnerships,
corporations, limited liability companies, or other entities owned solely by
such persons, including trusts for such persons. Any such transfer shall have no
effect until written notice (providing sufficient details as then are required
by the Company in respect of the proposed transfer) is received and confirmed by
the Company. Employee shall remain liable for all obligations of Employee and
his or her transferee or transferees. Each transferee shall also be subject the
employee's obligations under this Agreement relating to the Stock Options
transferred to him or her.
7. TENURE. The Employee's right to continue to serve the Company or
any of its subsidiaries as an officer, employee, or otherwise, shall not be
enlarged or otherwise affected by the award hereunder.
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8. SPECIFIC RESTRICTIONS UPON OPTION SHARES. The Employee hereby
agrees with the Company as follows:
a. The Employee shall acquire Shares hereunder for investment
purposes only and not with a view to resale or other distribution thereof to the
public in violation of the United States Securities Act of 1933, as amended (the
"1933 Act"), and shall not dispose of any such Shares in transactions which, in
the opinion of counsel to the Company, violate the 1933 Act, or the rules and
regulations thereunder, or any applicable state or national securities or "blue
sky" laws; and further,
b. If any Shares shall be registered under the 1933 Act, no
public offering (otherwise than on a national securities exchange, as defined in
the United States Securities Exchange Act of 1934, as amended) of any Shares
acquired hereunder shall be made by the Employee (or any other person) under
such circumstances that he or she (or such person) may be deemed an underwriter,
as defined in the 1933 Act; and further
c. The Employee agrees that the Company shall have the authority
to endorse upon the certificate or certificates representing the Shares acquired
hereunder such legends referring to the foregoing restrictions and any other
application restrictions, as it may deem appropriate.
9. NOTICES. Any notice required or permitted under this Option
Agreement shall be deemed to have been duly given if delivered, telecopied or
mailed, certified or registered mail, return receipt requested or by
internationally-recognized courier guaranteeing next day delivery (a) to the
Employee at such address as the Company (or relevant subsidiary) shall maintain
for the Employee or its personnel records or (b) to the Company, attention Stock
Plan Administration at its principal executive offices, which are currently
located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000.
10. DISCLOSURE AND USE OF INFORMATION. By signing and returning the
attached Notice of Grant, the Optionee hereby expressly: (i) authorizes the
Company and the Subsidiary, and any agent of the Company and/or the Subsidiary
administering the Plan or providing Plan recordkeeping services, to disclose to
the Company or any of its subsidiaries such information and data as the Company
or any such subsidiary shall request in order to facilitate the grant and
administration of the stock options and/or the administration of the Plan; (ii)
waives any data privacy rights he or she may have with respect to such
information; and (iii) authorizes the Company and the Subsidiary to store and
transmit such information in electronic form.
11. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to
enforce at any time any provision of this agreement shall in no manner be
construed to be a waiver of such provision or of any other provision hereof.
12. GOVERNING LAW. The Option Agreement shall be governed by and
construed according to the laws of the State of New York, applicable to
agreements made and performed in that state.
13. PARTIAL INVALIDITY. The invalidity or illegality of any provision
herein shall not be deemed to affect the validity of any other provision.
The Xxxxx Xxxxxx Companies Inc.
By:________________________
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NOTICE OF GRANT
UNDER
THE XXXXX XXXXXX COMPANIES INC.
FISCAL 2002 SHARE INCENTIVE PLAN (THE "PLAN")
This is to confirm that, upon the recommendation of your management, you were
awarded options to purchase shares of Class A Common Stock of The Xxxxx Xxxxxx
Companies Inc. (the "Shares") at the most recent meeting of the Compensation
Committee of the Board of Directors. This award was made in recognition of the
significant contributions you have made as a key employee of the Company, and to
motivate you to achieve future successes by aligning your interests more closely
with those of our stockholders. These options are granted under and governed by
the terms and conditions of the Plan and the Stock Option Agreement (the
"Agreement") attached hereto and made part hereof. A Summary Plan Description is
also attached. Please read these documents and keep them for future reference.
The specific terms of your award are as follows:
Participant:
SSN or Tax ID:
Grant Date:
Type of Award: NON-QUALIFIED STOCK OPTIONS
Exercise Price per Share: $ _______ (CLOSING TRADING PRICE ON NYSE OF THE CLASS
A COMMON STOCK ON THE DATE OF GRANT)
Aggregate number of Shares subject to your options:
Exercise Period: YOUR OPTIONS SHALL BECOME EXERCISABLE ON THE FOLLOWING DATES
(OR UPON DEATH, DISABILITY, RETIREMENT, OR INVOLUNTARY TERMINATION OF EMPLOYMENT
IF THESE OCCURRENCES ARE EARLIER), BUT ARE SUBJECT TO TERMINATION OR FORFEITURE
AS PER PARAGRAPHS 2 AND 3 OF THE AGREEMENT:
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NUMBER OF SHARES DATE EXERCISABLE EXPIRATION DATE
------------------------------ ------------------------ ------------------------
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Questions regarding the stock option program can be directed to _______ at
________ or __________ at ______________. If you wish to accept this grant,
PLEASE SIGN THIS NOTICE AND RETURN WITHIN THE NEXT TWO WEEKS TO:
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Compensation Department
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: ______________
The undersigned hereby accepts, and agrees to, all terms and provisions of the
Agreement, including those contained in this Notice of Grant.
By_________________________ Date__________
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