NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
XXXXXXX PURINA COMPANY (the "Company"), effective September 23, 1999,
grants this Non-Qualified Performance Stock Option to ______("Optionee") to
purchase a total of 2,500 shares of Common Stock of the Company ("Stock") at a
price of $____ 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
Stock which have been held by Optionee at least six months, at their Fair Market
Value as determined by the Board, or both.
1. Normal Exercise. This Option becomes exercisable on September 23, 2001
----------------
and remains exercisable through September 22, 2009, unless Optionee is no longer
serving as a Director of 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
------------
forfeited under this Option will become fully exercisable before the normal
exercise date set forth in paragraph 1 hereof upon the occurrence of any of the
following events while Optionee is serving on the Board:
a. Death of Optionee;
b. Declaration of Optionee's total and permanent disability;
c. Retirement, resignation or other termination from the Board of Directors
of the Company; or
d. Change of Control of the Company.
3. Exercise After Certain Events. Upon the occurrence of any of the events
------------------------------
described below, any shares that are exercisable on the date of such occurrence
shall remain exercisable during the period stated below, but, in any event, not
later than September 22, 2009:
a. Upon Optionee's retirement, resignation or other termination from the
Board of Directors, declaration of total and permanent disability or death, such
shares that are exercisable shall remain exercisable for five years after such
event;
b. When, prior to a Change of Control, there has been a declaration of
forfeiture pursuant to Section IV of the Plan because 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
c. After a Change of Control, if 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
----------
forfeiture for the reasons set forth in Section IV.A. 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; and
all other shares are forfeited.
5. Definitions. Unless otherwise defined in this Non-Qualified Stock Option
-----------
Agreement, 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 the
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.
6. Severability. The invalidity or unenforceability of any provision 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
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.
ACKNOWLEDGED AND ACCEPTED: XXXXXXX PURINA COMPANY
By: By:
------------------------------- --------------------------------------
Date: Date:
---------------------------- ------------------------------------
