DEPARTMENT 56, INC. STOCK OPTION AGREEMENT (DIRECTOR OPTION)
OPTIONEE: DATE:
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NUMBER OF SHARES SUBJECT TO THE OPTION: EXERCISE PRICE PER SHARE: $
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1. GENERAL.
1.1 The Company hereby grants to the Optionee, subject to the terms of
this Agreement and the Company's 199_ Stock Incentive Plan (the "Plan"), the
right and option (the "Option") to purchase, at the Exercise Price, the number
of Shares set forth above. The number of Shares and the Exercise Price are
subject to adjustment as provided in Section [12] [13] of the Plan, which is
made a part hereof as if fully set forth herein. Except as otherwise defined
herein, capitalized terms used in this Agreement shall have the same definitions
as set forth in the Plan.
1.2 This Option is not intended to qualify as an Incentive Stock Option
within the meaning of Section 422 of the Code.
1.3 The Option shall be exercisable to the extent and in the manner
provided herein for a period of 10 years from the date hereof (the "Exercise
Term"); PROVIDED, HOWEVER, that the Option may be earlier terminated as provided
in Section 4 hereof.
2. EXERCISABILITY OF OPTIONS.
2.1 VESTING. Subject to the provisions of this Agreement and the Plan,
the Option shall become exercisable with respect to one-half of the total number
of Shares which may be purchased pursuant to the Option on the first business
day after each of the first and second annual meetings of stockholders of the
Company held after the date of this grant.
2.2 TIMING OF EXERCISE. The Optionee or the guardian, executor,
administrator or other legal representative (each a "Legal Representative") of
the Optionee (all references herein to "Optionee" being deemed to include the
Optionee's Legal Representative, if any, unless the context otherwise requires)
may exercise the Option, in whole or in part, at any time or from time to time,
but only to the extent the Option has become exercisable pursuant to Section 2.1
or 2.3 at the time of the proposed exercise.
2.3 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything contained in
this Agreement to the contrary, in the event of a Change in Control, the Option
shall become immediately and fully exercisable.
3. MANNER OF EXERCISE AND PAYMENT.
3.1 Subject to the terms and conditions of this Agreement and the Plan,
the Option may be exercised by delivery of written notice, in person or by mail,
to the Secretary of the Company, at the Company's principal executive office (or
such other address as the Company may from time to time notify the Optionee of
in writing). Such notice shall state that the Optionee is electing to exercise
the Option and the number of Shares in respect of which the Option is being
exercised and shall be signed by the Optionee or, where applicable, by his Legal
Representative. The Company may require proof satisfactory to it as to the
right of the Legal Representative to exercise the Option.
3.2 The notice of exercise described in Section 3.1 hereof shall be
accompanied by the full purchase price for the Shares in respect of which the
Option is being exercised, such purchase price to be paid by check and/or the
transfer of Shares to the Company upon such terms and conditions as determined
by the Committee. Not less than 10 Shares may be purchased at any one time upon
an exercise of the Option, unless the number of Shares so purchased constitutes
the total number of Shares then purchasable under the Option.
3.3 The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any Shares subject to the Option
until the conditions in Section 7.3 of the Plan have been satisfied.
4. CERTAIN RESTRICTIONS.
4.1 NON-TRANSFERABILITY. The Option shall not be transferable by the
Optionee otherwise than by will or the laws of descent and distribution, and an
Option may be exercised during the lifetime of such Optionee only by the
Optionee or his or her Legal Representative. The terms of such Option shall be
final, binding and conclusive upon the beneficiaries, executors, administrators,
heirs and successors of the Optionee.
4.2 TERMINATION. (a) If the Optionee's service as a Director terminates
for any reason other than Cause, the Optionee may for a period of one (1) year
after such termination exercise the Option to the extent, and only to the
extent, that the Option or portion thereof is vested and exercisable as of the
date the Optionee's service as a Director is terminated, after which time the
Option shall automatically terminate in full.
(b) If the Optionee's service as a Director terminates for Cause, the
Option shall immediately terminate in full and no rights hereunder may be
exercised.
(c) If the Optionee dies while a Director or within the one (1) year
period after termination of his service as a Director as described in clause (a)
of this Section 4.2, the Option may be exercised at any time within twelve (12)
months after the Optionee's death by his Legal Representative, after which time
the Option shall terminate in full; PROVIDED, HOWEVER, that the Option may be
exercised to the extent, and only to the extent, that the Option or portion
thereof is exercisable on the date of death or earlier termination of the
Optionee's services as a Director.
5. ENTIRE AGREEMENT. This Agreement and the Plan constitute the entire
agreement, and supersede all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
6. SPECIFIC PERFORMANCE. The parties hereto acknowledge that there will be no
adequate remedy at law for a violation of any of the provisions of this
Agreement and that, in addition to any other remedies which may be available,
all of the provisions of this Agreement shall be specifically enforceable in
accordance with their respective terms.
7. ACKNOWLEDGMENT. The Optionee hereby acknowledges prior receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions thereof as
the same may be amended from time to time. The Optionee hereby acknowledges
that he has reviewed the Plan and this Agreement and understands his rights and
obligations thereunder and hereunder. The Optionee also acknowledges that he
has been provided with such information concerning the Company, the Plan and
this Agreement as he and his advisors have requested.
DEPARTMENT 56, INC.
By:
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Xxxxx X. Xxxxxx
Senior Vice President
Legal and Human Resources
By:
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Optionee:
