Exhibit 10.2
STOCK OPTION
AGREEMENT
(2004 Stock Incentive Plan)
THIS AGREEMENT, entered into as of the Agreement Date (as defined in
Paragraph 1), by and between the Participant and ShopKo Stores, Inc. (the
"Company");
WITNESSETH THAT:
WHEREAS, the Company maintains the ShopKo Stores, Inc. 2004 Stock
Incentive Plan (the "Plan"), which is incorporated into and forms a part of this
Agreement, and the Participant has been selected by the committee administering
the Plan (the "Committee") to receive a Non-Qualified Stock Option Award under
the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:
1. Terms of Award. The following terms used in this Agreement shall have
the meanings set forth in this Paragraph 1:
a. The "Participant" is ____________________.
b. The "Agreement Date" is _________________.
c. The number of "Covered Shares" shall be _____ shares of Stock.
d. The "Exercise Price" is $_______ per share.
Other capitalized terms used in this Agreement are defined in Paragraph 8 or
elsewhere in this Agreement.
2. Award and Exercise Price. The Participant is hereby granted an option
(the "Option") to purchase the number of Covered Shares of Stock at the Exercise
Price per share as set forth in Paragraph 1. The Option is not intended to
constitute an "incentive stock option" as that term is used in Code section 422.
3. Exercisability of Option. So long as the Participant's Date of
Termination shall not have occurred, the Option shall become exercisable
according to the following schedule:
Percentage of Covered Shares Becoming
Anniversaries of the Agreement Date Exercisable on Such Date
----------------------------------- ------------------------
_________, 200_ 33 1/3%
_________, 200_ 33 1/3%
_________, 200_ 33 1/3%
Exercisability under this schedule is cumulative, and after the Option becomes
exercisable with respect to any portion of full Covered Shares, it shall
continue to be exercisable with respect to that portion of the Covered Shares
until the Option expires. Notwithstanding the foregoing provisions of this
Paragraph 3, the Option shall become exercisable with respect to all of the
Covered Shares as follows:
a. The Option shall become fully exercisable upon the date of the
Participant's Date of Termination by reason of the Participant's
death or Disability.
b. The Option shall become fully exercisable upon a Change of Control
if the Participant's Date of Termination does not occur before the
Change of Control.
33
4. Expiration. The Option shall not be exercisable on or after the
Expiration Date. The "Expiration Date" shall be earliest to occur of:
a. the tenth anniversary of the Agreement Date;
b. if the Participant's Date of Termination occurs by reason of death
or Disability, the first anniversary of such Date of Termination;
c. if the Participants' Date of Termination occurs by reason of
Retirement, the second anniversary of such Date of Termination; or
d. if the Participant's Date of Termination occurs for reasons other
than death, Disability, or Retirement, the 90 day anniversary of
such Date of Termination.
If the Participant's Date of Termination occurs by reason of death, or if the
Participant dies after the Date of Termination and prior to the occurrence of
the Expiration Date, then, notwithstanding the foregoing, the Expiration Date
shall be the first anniversary of the date of death.
5. Method of Option Exercise. The Option may be exercised in whole or in
part, but with respect to a whole number of shares only, by filing a written
notice with the Secretary of the Company at its corporate headquarters prior to
the Expiration Date. Such notice shall specify the whole number of shares of
Stock which the Participant elects to purchase, and shall be accompanied by
payment of the Exercise Price for such shares of Stock indicated by the
Participant's election. Payment shall be by cash or by check payable to the
Company. Except as otherwise provided by the Committee before the Option is
exercised: (i) all or a portion of the Exercise Price may be paid by the
Participant by delivery of previously-owned shares of Stock which are mature as
determined by applicable Internal Revenue Service and accounting rules and
regulations and acceptable to the Committee and having an aggregate Fair Market
Value (valued as of the date of exercise) that is equal to the amount of cash
that would otherwise be required; or (ii) the Participant may pay the Exercise
Price by authorizing a third party to sell shares of Stock (or a sufficient
portion of the shares) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
6. Withholding. All distributions under this Agreement are subject to
withholding of all applicable taxes. At the election of the Participant, and
subject to such rules as may be established by the Committee, such withholding
obligations may be satisfied through the surrender of shares of Stock which the
Participant already owns, or to which the Participant is otherwise entitled
under the Plan.
7. Transferability. Except as otherwise provided in this Paragraph 7, the
Option is not transferable other than as designated by the Participant by will
or by the laws of descent and distribution, and during the Participant's life,
may be exercised only by the Participant.
8. Definitions. For purposes of this Agreement, the terms listed below
shall be defined as follows:
a. Change of Control. The term "Change of Control" shall mean any of the
following events:
(1) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (i) the then outstanding shares of Common Stock of
the Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (1), the following acquisitions shall not constitute a Change
of Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (3) below, or (v) any acquisition of 20% or
more but less than a majority of either the Outstanding Company Common
34
Stock or the Outstanding Company Voting Securities by any individual,
entity or group if at least a majority of the members of the Board of
Directors of the Company were members of the Incumbent Board, as defined
below, at the time of such acquisition; or
(2) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least
a majority of the directors then constituting the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board; or
(3) consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company for which approval of the shareholders of the Company is required
(a "Business Combination"), in each case, unless, immediately following
such Business Combination, (i) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly
or indirectly, more than 50% of, respectively, the then outstanding shares
of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be and (ii) at
least a majority of the members of the Board of Directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board, providing for such Business Combination; or
(4) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
b. Date of Termination. The Participant's "Date of Termination" shall
be the first day occurring on or after the Agreement Date on which
the Participant's employment with the Company and all Related
Companies terminates for any reason; provided that a termination of
employment shall not be deemed to occur by reason of a transfer of
the Participant between the Company and a Related Company or between
two Related Companies; and further provided that the Participant's
employment shall not be considered terminated while the Participant
is on a leave of absence from the Company or a Related Company
approved by the Participant's employer. If, as a result of a sale or
other transaction, the Participant's employer ceases to be a Related
Company (and the Participant's employer is or becomes an entity that
is separate from the Company), the occurrence of such transaction
shall be treated as the Participant's Date of Termination caused by
the Participant being discharged by the employer.
c. Disability. "Disability" is as defined in the Company's long-term
disability plan as in effect at the time disability is being
determined.
d. Retirement. "Retirement" of the Participant shall mean the
occurrence of the Participant's Date of Termination after age 55
with ten (10) or more years of service with the Company or a Related
Company, or if the Committee consents at the time employment
terminates, the Participant's Date of Termination after age 55
regardless of the number of years of service with the Company.
e. Plan Definitions. Except where the context clearly implies or
indicates the contrary, capitalized terms not defined herein shall
have the meanings specified in the Plan.
35
9. Heirs and Successors. This Agreement shall be binding upon, and inure
to the benefit of, the Company and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business. In the
event of the Participant's death prior to exercise of this Award, the Award may
be exercised by the estate of the Participant to the extent such exercise is
otherwise permitted by the Agreement. Subject to the terms of the Plan, any
benefits distributable to the Participant under this Agreement that are not paid
at the time of the Participant's death shall be paid at the time and in the form
determined in accordance with the provisions of this Agreement and the Plan, to
the beneficiary designated by the Participant in writing filed with the
Committee in such form and at such time as the Committee shall require. If a
deceased Participant fails to designate a beneficiary, or if the designated
beneficiary of the deceased Participant dies before the Participant or before
complete payment of the amounts distributable under this Agreement, the amounts
to be paid under this Agreement shall be paid to the legal representative or
representatives of the estate of the last to die of the Participant and the
beneficiary.
10. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding.
11. Agreement Subject to Plan. Notwithstanding anything in this Agreement
to the contrary, the terms of this Agreement shall be subject to the terms of
the Plan, a copy of which may be obtained by the Participant from the office of
the Secretary of the Company. In the event of any inconsistency between the
terms of this Agreement and the terms of the Plan, the terms of the Plan shall
control.
12. Amendment. This Agreement may be amended as described in the Plan, or
by written Agreement of the Participant and the Company, without the consent of
any other person.
IN WITNESS WHEREOF, the Participant has executed this Agreement, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Agreement Date.
Participant:
_______________________________________
SHOPKO STORES, INC.
By: ___________________________________
Xxxxx X. Xxxxxxxxxxxx
Its: Secretary
36
