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EXHIBIT 10.7
NON-QUALIFIED STOCK OPTION AGREEMENT
AWARD NUMBER OF OPTION PRICE SOCIAL SECURITY
AWARDED TO DATE COMMON SHARES PER SHARE NUMBER
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EXPIRATION DATE VESTING SCHEDULE
The Committee under the 1994 Stock Incentive Plan ("1994 Plan") of The
May Department Stores Company (the "Company") has approved awarding Executive
non-qualified options (referred to in this agreement as "options") to purchase
shares of stock of the Company ("Stock") on the terms and subject to the
conditions set forth in this agreement.
Therefore, the Company and Executive hereby agree as follows:
1. The Company hereby awards to Executive options to purchase, in the
aggregate, the number of shares of the presently authorized Stock of the Company
shown above, at the option price shown above. Subject to all other terms and
conditions in this agreement, the options shall be irrevocable.
2. Subject to all the other terms and conditions in this agreement, the
options may be exercised by Executive on and after the dates and for the
corresponding number of shares shown in the vesting schedule above; provided,
however, that the options may be exercised only on or before the expiration date
shown above.
3. Executive may exercise options on and after the appropriate vesting
dates (and before a date or event of termination or cancellation) in whole at
any time, or in part from time to time, in blocks at least equal to the lesser
of one hundred (100) shares or the total number of shares which are then
exercisable. Executive shall give the Company(i) a written notice to exercise
such options in whole or in a specified part, which certifies that Executive is
in compliance with the terms and conditions of this agreement and Section 1 of
Part VI of the 1994 Plan and (ii) full payment for the shares then being
purchased ("Payment"). Payment may be made by (a) a cashier's or certified check
payable to the order of the Company, (b) a wire transfer to the Company's
account listed on the notice of exercise, (c) delivery of certificates
representing shares of Stock owned by Executive for at least six months, on such
terms as the Company shall establish from time to time, or (d) by such other
means as the Company may from time to time authorize. Options will be considered
exercised on the earliest of (x) the date that the notice of exercise of options
and Payment are received in the office of the Treasurer of the Company at the
Company's principal offices, 000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, or at
such other location as may be established in accordance with Section G on the
other side of this agreement, (y) if the notice of exercise and Payment are sent
to that office via independent courier service, the date the courier service
shows that it received them, or (z) if the notice of exercise and Payment are
mailed to that office in the United States mail in one envelope on which the
United States Post Office has stamped its postmark, the date of that postmark.
4. The terms and conditions on the other side of this agreement are a
part of this agreement.
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The
May Department Stores Company has caused this agreement to be
executed in its corporate name and Executive has executed the same in evidence
of the Executive's acceptance hereof upon the terms and conditions herein set
forth as of the award date shown above.
THE
MAY DEPARTMENT STORES COMPANY
By
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(Executive)
A. (i) In no event may any option be exercised after the tenth
anniversary of the award date shown on the face of this agreement, and any
option may be sooner terminated in accordance with the provisions of the 1994
Plan and of this Section A.
(ii) If Executive ceases to be an employee of the Company or of a
subsidiary thereof, for any reason other than Retirement or Disability or death,
then all of the outstanding options shall immediately terminate. Executive's
employment shall not be deemed to have ceased solely by reason of a leave of
absence (a) during the first 90 consecutive days of a paid military, sick,
family or other bona fide paid leave of absence or (b) if Executive has a right
of reinstatement expressly guaranteed by either statute, contract, or company or
subsidiary policy. In the event of such a leave of absence, the number of shares
for which options may be exercised during the periods described in clauses (a)
and (b) of the foregoing sentence shall be the number of shares for which
options were exercisable as of the date that the leave of absence began, subject
to the other terms and conditions of this Section A.
(iii) If Executive Retires or becomes Disabled, the term of any then
outstanding options shall extend for a period ending on the earliest of (a) the
date upon which the options would otherwise expire, (b) three years after such
Retirement (for a reason other than Disability) or (c) twelve months after such
Disability. In that event, the number of shares for which options may be
exercised after that Retirement or Disability shall be the number of shares for
which options were exercisable as of the date of that Retirement or Disability,
subject to the other terms and conditions of this Section A. Options which were
not exercisable as of the date of that Retirement or Disability will no longer
be deemed to be outstanding thereafter.
(iv) (a) If Executive dies while in the employment of the Company or a
subsidiary thereof without having fully exercised any then outstanding option,
the beneficiary designated by Executive (or, in the absence of such designation,
the executors or administrators or legatees or distributees of Executive's
estate) shall have the right to exercise such option, in whole or in part during
the period ending on the earlier of (1) the date upon which the options would
otherwise expire or (2) three years after the date of death. In that event, the
number of shares for which options may be exercised after such death shall be
the number of shares for which options were outstanding on the date of death
(whether or not the options were already exercisable on the date of death).
(b) If Executive dies during any period following Executive's
Retirement or Disability, without having fully exercised any then outstanding
option, the beneficiary designated by Executive (or, in the absence of such
designation, the executors or administrators or legatees or distributees of
Executive's estate) shall have the right to exercise such option, in whole or in
part during the period ending on the earlier of (1) the date upon which the
options would otherwise expire or (2) three years after the date of death. In
that event, the number of shares for which options may be exercised after such
death shall be the number of shares for which options were exercisable as of the
date of the Retirement or Disability and remain outstanding on the date of
Executive's death.
(v) The provisions of paragraph 3 and the foregoing paragraphs (i)
through (iv) of this Section A are subject to the provision that the Committee
may cancel all unexercised options hereunder at any time if the Retirement of
the Executive was without the consent of the Company or the Executive, engages
in employment or activities contrary, in the opinion of the Committee, to the
best interests of the Company. In addition, the Committee may cancel all
unexercised options, and may rescind any exercise of options, if, prior to any
such exercise or within six months of such exercise, one of the events described
in Section 1 of Part VI of the 1994 Plan occurs. Within 10 days after receiving
notice that the Committee has rescinded the exercise of an option, Executive
shall either (i) pay to the Company the excess of the fair market value of the
Stock on the date of exercise of the option over the exercise price for the
option or (ii) return to the Company the Stock received upon the exercise. The
Company may deduct from any amounts the Company owes to the Executive from time
to time the amounts Executive owes the Company pursuant to such rescission.
Notwithstanding any other terms in this agreement, nothing in this Section A or
elsewhere in this agreement shall be deemed or construed as extending the
ten-year period described in Section A(i).
For purposes of this Section A, a "Competing Business" shall mean (i)
any retail department store, specialty store or other retail business which
sells goods or merchandise of the types sold in the Company's stores at retail
to consumers or any group of such stores or businesses or any other business
which competes (for customers, for suppliers, for employees or for any other
resource) against the Company or any of the Company's subsidiaries, divisions or
stores (in the United States or in any other country in which the Company or any
subsidiary of the Company operates a store or stores at the time), which store,
group of stores or business had annual gross sales volume or revenues (including
sales in leased departments) in the prior fiscal year of more than $25 million
or is reasonably expected to have such sales or revenues in either of the
current fiscal year or the next following fiscal year of more than $25 million;
or (ii) any business which provides buying office services to any store or group
of stores or businesses referred to above; or (iii) any business (in the United
States or in any other country in which the Company or any subsidiary of the
Company operates a store or stores at the time) in which Executive's functions
would be substantially similar to Executive's functions with the Company and
which is in material competition with the Company or any subsidiary or division
of the Company.
"Confidential information" shall mean all non-public information pertaining to
the Company's business, including not only information disclosed by the Company
to Executive, but also information developed or learned by Executive during the
course of or as a result of employment with the Company. The Company's
confidential information includes, without limitation, information and documents
concerning the Company's processes; suppliers (including terms, conditions and
other business arrangements with suppliers); supplier and customer lists;
advertising and marketing plans and strategies;
profit margins; seasonal plans, goals, objectives and projections; compilations,
analyses and projections regarding the Company's divisions, stores, product
segments, product lines, suppliers, sales and expenses; files; trade secrets and
patent applications (prior to their being public); salary, staffing and
employment information (including information about performance of other
executives); and "know-how," techniques or any technical information not of a
published nature relating, for example, to how the Company conducts its
business.
(vi) If (a) one of the events described in Section 4 of Part V of the
1994 Plan occurs and (b) Executive is actively employed on the date of such
event, then from and after such date all options outstanding under this
agreement shall be exercisable in full without regard to the provisions of
Section 2 of this agreement.
B. Promptly following each exercise of an option, shares shall be
delivered to the Executive by the Company, subject to the provisions of Section
D.
C. Each option is personal to Executive, is not transferable by
Executive (other than, upon the death of Executive, by beneficiary designation,
by last will and testament or by laws of descent and distribution) and, during
Executive's lifetime, is exercisable only by Executive.
D. The exercise of each option shall be subject to the condition that
if at any time the Company shall determine in its discretion that the
satisfaction of withholding tax or other withholding liabilities under any state
or Federal law ("Withholding Obligation"), or that the listing, registration or
qualification of any shares otherwise deliverable upon such exercise upon any
securities exchange or under any state or Federal law, or the consent or
approval of any regulatory body, is necessary or desirable as a condition of, or
in connection with, the exercise or the delivery or purchase of shares
hereunder, then in any of those events, the exercise shall not be effective
unless that withholding, listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company. Executive shall pay any Withholding Obligation to the
Company at the time of the option exercise by such mode of payment as the
Company may from time to time authorize, which may include payment by (i)
cashier's or certified check, (ii) personal check, (iii) wire transfer or (iv)
the withholding of a number of the shares of Stock payable to Executive in
connection with the option exercise with a fair market value equal to the
Withholding Obligation (with any fractional share rounded up to the nearest
whole share).
E. If there is (i) any change in the capital structure of the Company
through merger, consolidation, reorganization, recapitalization, spin off or
otherwise, (ii) any dividend on the Stock, payable in such Stock, or (iii) a
stock split, or a combination of shares, a consolidation or merger, the Board
shall make appropriate adjustments in the number and price of shares relating to
options under this agreement.
F. Nothing in this agreement shall be deemed by implication or
otherwise to impose any limitation on any right of the Company or subsidiary to
terminate the Executive's employment at any time, in the absence of a specific
agreement to the contrary.
G. Any notice to be given under this agreement by Executive shall be
sent by mail addressed to the Company for the attention of the Treasurer at its
principal offices, 000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, and any notice
by the Company to Executive shall be sent by mail addressed to the Executive at
the address shown on the face of this agreement, or, if an address is not
available, to Executive at Executive's store company or division. Either party
may, by notice given to the other in accordance with the provisions of this
Section, change the address to which subsequent notices shall be sent.
H. This agreement shall be governed by the laws of the State of
Delaware. It may not be modified except in writing signed by both parties.
I. Executive acknowledges that Executive has received a copy of the
1994 Incentive Stock Plan, as such Plan is in effect on the date of this
Agreement, has read and understands the terms of the 1994 Plan and of this
Agreement, and agrees to all of the terms and conditions provided for in the
1994 Plan and in this Agreement.
J. So long as this agreement shall remain in effect, the Company will
furnish to Executive, as and when available, a copy of each prospectus issued
with respect to the shares of stock covered hereby, and also copies of all
material hereafter distributed by the Company to its shareowners.
K. Except as otherwise provided herein, or unless the context clearly
indicates otherwise, capitalized terms herein which are defined in the 1994 Plan
have the same definitions as provided in the 1994 Plan.
