NON-QUALIFIED STOCK OPTION
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XXXXXXX PURINA COMPANY (the "Company"), effective September 24, 1998,
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 $30.875 per share pursuant to its 1996 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 24 in each of the years 2000, 2001, 2002 and 2003.
This Option remains exercisable through September 23, 2008 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 (i) at or after
age 55 with 15 years of service with the Company or its Affiliates; or (ii) at
or after age 62;
d. a Change of Control; or
e. the involuntary termination of Optionee's employment with the
Company or an Affiliate, 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 or any Affiliates and any of its other
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 23, 2008:
a. If Optionee's employment is terminated due to death, declaration of
total and permanent disability, voluntary termination at or after the time set
forth in paragraph 2(c)(i) or (ii), 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 voluntarily prior to the time
set forth in paragraph 2(c)(i) or (ii), such shares that are exercisable shall
remain exercisable for six months after such voluntary termination;
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 of any successor to the Company.
6. Severability. The invalidity or unenforceability of any provision hereof
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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.
ACKNOWLEDGED AND ACCEPTED: XXXXXXX PURINA COMPANY
____________________________
Optionee
By:_________________________
____________________________ Co-Chief Executive Officer
Date
