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XXX NABISCO HOLDINGS CORP.
1990 LONG TERM INCENTIVE PLAN
STOCK OPTION AGREEMENT
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DATE OF GRANT: APRIL 27, 1995
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W I T N E S S E T H :
1. Grant of Option. Pursuant to the provisions of the 1990 Long Term
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Incentive Plan (the "Plan"), RJR Nabisco Holdings Corp. (the "Company") on the
above date has granted to
[NAME] (the "Optionee"),
subject to the terms and conditions which follow and the terms and conditions of
the Plan, the right and option to exercise from the Company a total of
[STOCK_OPTIONS] shares
of Common Stock, no par value, of the Company, at the exercise price of $29.70
per share (the "Option"). A copy of the Plan is attached and made a part of this
agreement with same effect as if set forth in the agreement itself. All
capitalized terms used herein shall have the meaning set forth in the Plan,
unless the context requires a different meaning.
2. Exercise of Option.
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(a) Shares may be purchased by giving the Corporate Secretary of the
Company written notice of exercise, on a form prescribed by the Company,
specifying the number of shares to be purchased. The notice of exercise shall be
accompanied by
(i) tender to the Company of cash for the full purchase price of the
shares with respect to which such Option or portion thereof is
exercised; or
(ii) the unsecured, demand borrowing by the Optionee from the Company on an
open account maintained solely for this purpose in the amount of the
full exercise price together with the instruction from the Optionee to
sell the shares exercised on the open market through a duly registered
broker-
dealer with which the Company makes an arrangement for the sale of
such shares under the Plan. This method is known as the "broker-dealer
exercise method" and is subject to the terms and conditions set forth
herein, in the Plan and in guidelines established by the Committee.
The Option shall be deemed to be exercised simultaneously with the
sale of the shares by the broker-dealer. If the shares purchased upon
the exercise of an Option or a portion thereof cannot be sold for a
price equal to or greater than the full exercise price plus direct
costs of the sales, then there is no exercise of the Option. Election
of this method authorizes the Company to deliver shares to the
broker-dealer and authorizes the broker-dealer to sell said shares on
the open market. The broker-dealer will remit proceeds of the sale to
the Company which will remit net proceeds to the Optionee after
repayment of the borrowing, deduction of costs, if any, and
withholding of taxes. The Optionee's borrowing from the Company on an
open account shall be a personal obligation of the Optionee which
shall bear interest at the published Applicable Federal Rate (AFR) for
short-term loans and shall be payable upon demand by the Company. Such
borrowing may be authorized by telephone or other telecommunications
acceptable to the Company. Upon such borrowing and the exercise of the
Option or portion thereof, title to the shares shall pass to the
Optionee whose election hereunder shall constitute instruction to the
Company to register the shares in the name of the broker-dealer or its
nominee. The Company reserves the right to discontinue this
broker-dealer exercise method at any time for any reason whatsoever.
The Optionee agrees that if this broker-dealer exercise method under
this paragraph is used, the Optionee promises unconditionally to pay
the Company the full balance in his open account at any time upon
demand. Optionee also agrees to pay interest on the account balance at
the AFR for short-term loans from and after demand.
(b) This Option shall be exercisable in three installments. The first
installment shall be exercisable on the 27th of April following Date of Grant
for 33% of the number of shares of Common Stock subject to this option.
Thereafter, on each subsequent April 27th an installment shall become
exercisable for 33% and 34%, respectively, of the number of shares subject to
this Option until the Option has become fully exercisable. To the extent that
any of the above installments is not exercised when it becomes exercisable, it
shall not expire, but shall continue to be exercisable at any time thereafter
until this Option shall terminate, expire or be surrendered. An exercise shall
be for whole shares only.
(c) This Option shall not be exercised prior to six months after the Date
of Grant.
3. Termination of Employment.
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(a) The Option shall not become exercisable as to any additional
shares following the Termination of Employment of the Optionee
for any reason
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including a Termination of Employment because of Permanent
Disability or Retirement of the Optionee. Notwithstanding the
foregoing, in the event of Termination of Employment because of
death, the Option shall immediately become exercisable as to all
shares.
(b) "Termination of Employment" as used herein means termination from
active employment; it does not mean termination of payment of
severance or benefits at the end of salary continuation or other
form of severance or pay in lieu of salary.
4. Expiration of Option. The Option shall expire or terminate and may
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not be exercised to any extent by the Optionee after the first to occur of the
following events:
(a) The fifteenth anniversary of the Date of Grant, or such earlier
time as the Company may determine is necessary or appropriate in
light of applicable foreign tax laws; or
(b) Immediately upon the Optionee's Termination of Employment for
Cause (as defined in Section 11 herein).
5. Transferability. Other than as specifically provided with regard to
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the death of the Optionee, this option agreement and any benefit provided or
accruing hereunder shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge; and any
attempt to do so shall be void. No such benefit shall, prior to receipt thereof
by the Optionee, be in any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of the Optionee.
6. No Right to Employment. Neither the execution and delivery of
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this agreement nor the granting of the Option evidenced by this agreement shall
constitute or be evidence of any agreement or understanding, express or implied,
on the part of the Company or its subsidiaries to employ the Optionee for any
specific period or shall prevent the Company or its subsidiaries from
terminating the Optionee's employment at any time with or without "Cause" (as
defined in Section 11 herein).
7. Adjustments in Option. In the event that the outstanding shares of
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the Common Stock subject to the Option are, from time to time, changed into or
exchanged for a different number or kind of shares of the Company or other
securities by reason of a merger, consolidation, recapitalization,
reclassification, stock split, stock dividend, combination of shares, or
otherwise, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares or other consideration as to which the Option, or
portions thereof then unexercised, shall be exercisable. Any adjustment made by
the Committee shall be final and binding upon the Optionee, the Company and all
other interested persons.
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8. Application of Laws. The granting and the exercise of this Option
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and the obligations of the Company to sell and deliver shares hereunder and to
remit cash under the broker-dealer exercise method shall be subject to all
applicable laws, rules, and regulations and to such approvals of any
governmental agencies as may be required.
9. Taxes. Any taxes required by federal, state, or local laws to be
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withheld by the Company (i) on exercise by the Optionee of the Option for Common
Stock, or (ii) at the time an election, if any, is made by the Optionee pursuant
to Section 83(b) of the Internal Revenue Code, as amended, shall be paid to the
Company before delivery of the Common Stock is made to the Optionee. When the
Option is exercised under the broker-dealer exercise method, the full amount of
any taxes required to be withheld by the Company on exercise of stock options
shall be deducted by the Company from the proceeds.
10. Notices. Any notices required to be given hereunder to the Company
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shall be addressed to The Secretary, RJR Nabisco Holdings Corp., 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000-0000, and any notice required to be given
hereunder to the Optionee shall be sent to the Optionee's address as shown on
the records of the Company.
11. Termination For "Cause." For purposes of this Agreement, an
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Optionee's employment shall be deemed to have been terminated for "Cause" if the
termination results from the Optionee's: (a) criminal conduct, (b) deliberate
continual refusal to perform employment duties on substantially a full time
basis, (c) deliberate and continual refusal to act in accordance with any
specific lawful instructions of an authorized officer or employee more senior
than the Optionee, or (d) deliberate misconduct which could be materially
damaging to the Company or any of its business operations without a reasonable
good faith belief by the Optionee that such conduct was in the best interests of
the Company. A termination of Optionee's employment shall not be deemed for
Cause hereunder unless the senior personnel executive of the Company shall
confirm that any such termination is for Cause as defined hereunder. Any
voluntary termination by the Optionee in anticipation of an involuntary
termination of the Optionee's employment for Cause shall be deemed to be a
termination of Optionee's employment for Cause.
12. Administration and Interpretation. In consideration of the grant,
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the Optionee specifically agrees that the Committee shall have the exclusive
power to interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan and Agreement as are
consistent therewith and to interpret or revoke any such rules. All actions
taken and all interpretations and determinations made by the Committee shall be
final, conclusive, and binding upon the Optionee, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Agreement. The Committee may delegate its interpretive authority
to an officer or officers of the Company.
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13. Other Provisions.
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a) Titles are provided herein for convenience only and are not
to serve as a basis for interpretation of the Agreement.
b) This Agreement may be amended only by a writing executed by
the parties hereto which specifically states that it is amending this Agreement.
c) THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE
INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF
LAWS.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, and
the Optionee have executed this Agreement as of the date of Grant first above
written.
RJR NABISCO HOLDINGS CORP.
By
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Authorized Signatory
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Optionee
Optionee's Taxpayer Identification Number:
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Optionee's Home Address:
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