FORM OF OPTION AGREEMENT Between The Estee Lauder Companies Inc. And [Name of Optionee] and dated as of ,
Exhibit 10.3a
FORM OF
Between
The Xxxxx Xxxxxx Companies Inc.
And
[Name of Optionee]
and dated as of ,
The within OPTION AGREEMENT dated as of , , (the “Grant Date”) provides for the granting of options by The Xxxxx Xxxxxx Companies Inc., a Delaware corporation (the “Company”), to [name of optionee], an employee of the Company (the “Employee”) to purchase shares of the Company’s Class A Common Stock, par value $.01 per share (the “Shares”), on the terms and subject to the conditions hereinafter provided.
The stock options to be granted pursuant hereto shall not be Incentive Stock Options as defined in Section 422A of the Internal Revenue Code of 1986, as amended.
1. NUMBER OF SHARES. The Company hereby awards to the Employee options to purchase Shares (the “Stock Options”).
2. EXERCISE PRICE. For the Stock Options granted hereunder, the per-share exercise price shall be United States dollars (US$ ), the price at which the shares last traded on the New York Stock Exchange on the Grant Date.
3. PAYMENT OF EXERCISE PRICE. The Stock Option exercise price may be paid in cash, by the delivery of shares of Class A Common Stock of the Company then owned by the Employee, or by a combination of these methods. Payment may also be made by delivering a properly executed exercise notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale
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or loan proceeds to pay the exercise price. The Company may prescribe any other method of paying the exercise price that it determines to be consistent with applicable law, including, without limitation, in lieu of the exercise of a Stock Option by delivery of shares of Class A Common Stock of the Company then owned by the Executive, providing the Company with a notarized statement attesting to the number of shares owned, where upon verification by the Company, the Company may issue to the Employee only the number of incremental shares to which the Executive is entitled upon exercise of the Stock Options. In determining which methods the Employee may utilize to pay the exercise price, the Company may consider such factors as it determines are appropriate.
4. EXERCISE PERIOD. Stock Options granted hereunder shall be exercisable as set forth below:
shall be exercisable as of January 1,
shall be exercisable as of January 1,
shall be exercisable as of January 1,
Subject to the last sentence of this Paragraph 4, no Stock Option awarded hereunder shall be exercisable later than ten years after the date it is awarded. The Stock Option awarded hereunder shall not be transferable otherwise then by will or the laws of descent and distribution, and shall be exercisable during the Employee’s lifetime only by the Employee. In the event of the Employee’s death, each Stock Option awarded but unexercised as of the date of death shall become immediately exercisable, and may be exercised for a period commencing as of the day after the date of death and continuing for one year thereafter.
5. POST-EMPLOYMENT EXERCISES. The exercise of any Stock Option after termination of the Employee’s employment with the Company 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 himself in a manner adversely affecting the Company.
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6. 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, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to all holders of Class A Common Stock 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 Executive’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 of the Class A Common Stock 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.
(b) Notwithstanding any other provision hereunder, if there is a “Change in Control” (as hereinafter defined) of the Company, all then outstanding Stock Options shall immediately become exercisable. For purposes of this Section 6(b), a “Change in Control” of the Company shall be deemed to have occurred upon any of the following events:
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(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 Securities Exchange Act of 1934, as amended (the “Exchange Act”); or
(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 Section 6(b)(ii) or (b)(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 themselves, constitute a Change in Control of the Company, (B) any spin-off of a division or subsidiary of the Company to its stockholders and (C) any event listed in clauses (i) through (v) above that the Board of Directors determines not to be a Change in Control of the Company, shall not constitute a Change in Control of the Company.
For purposes of this Section 6(b), “Continuing Directors” shall mean (x) the directors of the Company in office on the date that shares of the Company’s Class A Common Stock are first offered for sale to the public and (y) any successor to any such director
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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.
The Company, in its discretion, may determine that, upon the occurrence of a Change in Control of the Company, each Stock Option outstanding hereunder shall terminate within a specified number of days after notice to the Executive, and the Executive shall receive, with respect to each share of Class A Common Stock subject to such Stock Option, an amount equal to the excess of the Market Value of such shares of Common Stock immediately prior to the occurrence of such Change in Control over the exercise price per share of such Stock Option; such amount to be payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or in a combination thereof, as the Company, in its discretion, shall determine. The provisions contained in the preceding sentence shall be inapplicable to any Stock Option awarded hereunder within six (6) months before the occurrence of a Change in Control if the Executive is subject to the reporting requirements of Section 16(c) of the Exchange Act and no exception from liability under Section 16(b) of the Exchange Act is otherwise available to the Executive.
7. WITHHOLDING. All payments or distributions of Stock Options made hereunder shall be net of any amounts required to be withheld pursuant to applicable Federal, state and local tax withholding requirements. The Company may require the Executive to remit to it an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Class A Common Stock. The Company 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 Executive to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Stock Option by electing to have the Company withhold shares of Class A Common Stock having a Market Value equal to the amount of tax to be withheld, such tax calculated at rates required by statute or regulation.
8. TENURE. The Executive’s right to continue to serve the Company or any of its subsidiaries as an officer, employee, or
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otherwise, shall not be enlarged or otherwise affected by his award hereunder.
9. INVESTMENT REPRESENTATION AND RELATED MATTERS. The Executive hereby represents that Stock Options awarded hereunder are being acquired for investment purposes and not for sale or with a view to distribution thereof. The Executive hereby acknowledges that as of the date hereof there does not exist a Registration Statement on an appropriate form under the Securities Act and applicable state securities laws that has become effective and includes a prospectus which is current with respect to shares of Class A Common Stock subject to Stock Options awarded hereunder. Accordingly, the Executive acknowledges and agrees that any subsequent offer for sale or sale of any such shares of Class A Common Stock shall be made either pursuant to (i) a Registration Statement on appropriate form under the Securities Act and, where applicable, state securities laws, which Registration Statement shall have become effective and shall be current with respect to the shares of Class A Common Stock being offered and sold, or (ii) a specific exemption from the registration requirements of the Securities Act and any applicable securities laws, but in claiming such exemption, the Executive shall, prior to any offer for sale or sale of such shares, obtain a favorable written opinion of counsel, in form and substance satisfactory to counsel for the Company, as to the applicability of such exemption.
The Executive 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 applicable restrictions, as it may deem appropriate.
10. 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 to the Employee at such address as the Company shall maintain for the Employee or its personnel records.
11. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to enforce at any time any provision of this agreement
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shall in no manner be construed to be a waiver of such provision or of any other provision hereof.
12. GOVERNING LAW. This 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.
IN WITNESS WHEREOF, the Company has executed this Option Agreement in duplicate on the date and year first above written.
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THE XXXXX XXXXXX COMPANIES INC. |
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By: |
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Name: |
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Title: |
The undersigned hereby accepts, and agrees to, all terms and provisions of the foregoing Option Agreement.
[Name]
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