NON-QUALIFIED STOCK OPTION
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XXXXXXX PURINA COMPANY (the "Company"), effective September 21, 2000 grants this
Non-Qualified Stock Option to ___________ ("Optionee") to purchase a total of
__________ shares of Common Stock of the Company ("Common Stock") at a price of
$22.25 per share pursuant to its 1999 Incentive Stock Plan (the "Plan").
Subject to the provisions of the Plan and the following terms, Optionee may
exercise this Option from time to time by tendering to the Company written
notice of exercise together with the purchase price in cash, or in shares of
Common Stock at their Fair Market Value as determined by the Human Resources
Committee, or both.
1. Normal Exercise. This Option becomes exercisable at the rate of 25% of
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the total shares on September 21 in each of the years 2002, 2003, 2004 and 2005.
This Option remains exercisable through September 20, 2010 unless Optionee is no
longer employed by the Company, in which case the Option is exercisable only in
accordance with the provisions of paragraph 3 below.
2. Acceleration. Notwithstanding the above, any shares not previously
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forfeited under this Option will become fully exercisable before the normal
exercise dates set forth in paragraph 1 hereof upon the occurrence of any of the
following events while Optionee is employed by the Company:
a. death of Optionee;
b. declaration, by the Committee, of Optionee's total and
permanent disability;
c. the voluntary termination of employment of Optionee at any time
on or after April 1, 2003;
d. a Change of Control; or
e. the involuntary termination of employment of Optionee, other than
a termination for any of the following reasons: Termination for
Cause, Optionee's engaging in competition with the Company or an
Affiliate, or Optionee's engaging in any activity or conduct
contrary to the best interests of the Company or any Affiliate.
For purposes of this Option, involuntary termination shall
include (i) Optionee's involuntary termination of employment
with the Company or an Affiliate which employs Optionee; or (ii)
the sale or other disposition of a majority of the stock or
assets of an Affiliate which employs Optionee. In no event shall
transfers of employment between the Company and any of its
Affiliates, or the creation of a class of stock of the Company
which tracks the performance of an Affiliate, be deemed to
constitute an involuntary termination of employment.
3. Exercise After Certain Events. Upon the occurrence of any of the events
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described below, any shares that are exercisable upon such occurrence shall
remain exercisable during the period stated below, but, in any event, not later
than September 20, 2010:
a. If Optionee's employment is terminated due to declaration of
total and permanent disability, voluntary termination at or after
age 55 with 15 years of Service or involuntary termination of
employment (other than for events described in Sections IV.A.1,
3 or 4 of the Plan), such shares that are exercisable shall
remain exercisable for five years thereafter;
b. If Optionee's employment is terminated due to death, such
shares that are exercisable shall remain exercisable for three
years thereafter;
c. When, prior to a Change of Control, there has been a declaration
of forfeiture pursuant to Section IV of the Plan because
Optionee's employment is Terminated for Cause, Optionee
engages in competition with the Company or an Affiliate, or
Optionee engages in any activity or conduct contrary to the best
interests of the Company or any Affiliate, such shares that are
then exercisable shall remain exercisable for seven days
after such declaration; or
d. After a Change of Control, if Optionee's employment is
Terminated for Cause, Optionee engages in competition with the
Company or an Affiliate, or Optionee engages in any activity or
conduct contrary to the best interests of the Company or any
Affiliate, such shares that are then exercisable shall remain
exercisable for seven days after a declaration that any of
such events has occurred.
4. Forfeiture. Prior to a Change of Control, this Option is subject to
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forfeiture for the reasons set forth in Section IV.A.1, 3 or 4 of the Plan. If
there is a declaration of forfeiture, those shares that are exercisable at the
time of the declaration may be exercised as set forth in paragraph 3 hereof; all
other shares are forfeited.
5. Definitions. Unless otherwise defined in this Non-Qualified Stock
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Option, defined terms used herein shall have the same meaning as set forth in
the Plan.
"Change of Control" shall occur when (i) a person, as
defined under securities laws of the United States, acquires
beneficial ownership of more than 50% of the outstanding voting
securities of the Company; or (ii) the directors of the Company
immediately before a business combination between the Company and
another entity, or a proxy contest for the election of directors,
shall, as a result thereof, cease to constitute a majority of the
Board of Directors of the Company or any successor to the Company.
"Eligible Optionee" shall mean an Optionee who is actively at work
at, or on an approved leave of absence from, the Company or an
Affiliate at the time of exercise of an Eligible Option.
"Eligible Option" shall mean an outstanding Option, held by an
Eligible Optionee, which has a remaining term of at least one
year.
6. Severability. The invalidity or unenforceability of any provision
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hereof in any jurisdiction shall not affect the validity or enforceability
of the remainder hereof in that jurisdiction, or the validity or enforceability
of this Non-Qualified Stock Option, including that provision, in any other
jurisdiction. To the extent permitted by applicable law, the Company and
Optionee each waive any provision of law that renders any provision hereof
invalid, prohibited or unenforceable in any respect. If any provision of
this Option is held to be unenforceable for any reason, it shall be adjusted
rather than voided, if possible, in order to achieve the intent of the parties
to the extent possible.
7. Grants of Restoration Options. If Optionee exercises this Option by
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tendering shares of Common Stock that have been held for at least six months,
and if Optionee is an Eligible Optionee and the Option qualifies as an Eligible
Option at the time of such exercise, then Optionee shall be entitled to a grant
of a Restoration Option to purchase a number of shares of Common Stock equal to
the number of shares so tendered. Such Restoration Option shall permit the
Optionee to purchase shares of Common Stock of the Company at an exercise price
equal to the New York Stock Exchange - Composite Transactions closing price on
the date of grant, and shall be subject to such other terms and conditions as
the Human Resources Committee of the Board shall determine.
ACKNOWLEDGED AND ACCEPTED: XXXXXXX PURINA COMPANY
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Optionee
By:---------------------------
------------------------- X. X. XxXxxxxx,
Date Chief Executive Officer
