NO. _____
XXX Stores Corporation
STOCK OPTION AGREEMENT
UNDER THE
1999 OMNIBUS STOCK INCENTIVE PLAN
(Nonemployee Director Stock Option)
XXX Stores Corporation (the "Company") hereby grants, effective
____________ (the "effective date"), to _____________ (the "Optionee") an option
to purchase a maximum of _____ shares of its Common Stock, $.01 par value, at a
price of $______ per share, subject to the following:
1. Relationship to Plan. This nonqualified stock option is granted
pursuant to the Company's 1999 Omnibus Stock Incentive Plan, a copy of which is
attached as Exhibit A hereto (the "Plan"), and is in all respects subject to the
terms, conditions and definitions of the Plan. The Optionee hereby accepts this
option subject to all the terms and provisions of the Plan, including those
relating to non-transferability and termination of the option and adjustment of
the number of shares subject to this option and the exercise price therefor. The
Optionee further agrees that all decisions under and interpretations of the Plan
by the Compensation Committee (the "Committee") shall be final, binding and
conclusive upon the Optionee and his heirs.
2. Time of Exercise. This option may not be exercised prior to the
first anniversary of the effective date of this Agreement. It may thereafter be
exercised, from time to time, in full or in part, by the Optionee to the extent
of the Optionee's then "Vested Percentage" of the maximum number of shares of
Common Stock subject to this option as determined in accordance with the
following schedule, and shall remain exercisable (subject to the provisions of
Section 6 hereof and the Plan) until it has been exercised as to all shares
subject hereto or has expired, whichever occurs first.
Anniversary of Effective
Date of Agreement Vested Percentage
------------------------ -----------------
First (12th month) 20%
Second (24th month) 40%
Third (36th month) 60%
Fourth (48th month) 80%
Fifth (60th month) 100%
Notwithstanding anything to the contrary herein contained, so long as
the Optionee shall be a member of the Board of Directors of the Company, this
option may not be exercised if, in the opinion of counsel for the Company, the
issuance of the shares pursuant hereto, either alone or in combination with the
issuance of other securities by the Company, would constitute a violation of
applicable federal or state securities laws or regulations or orders thereunder.
In the event this option may not otherwise be exercised by reason of the
foregoing sentence, the Company shall use its best efforts to register said
shares with the Securities and Exchange
Commission on Form S-8 (or successor form) and, concurrently therewith, to take
such steps as may be necessary to comply with applicable state securities laws
in connection with such issuance.
3. Term of Option. This option shall expire on the tenth anniversary
of the effective date of this Agreement.
4. Methods of Exercise. This option shall be exercisable by a written
notice in the form adopted by the Committee, as attached hereto as Exhibit B,
which specifies the number of shares to be purchased. Upon receipt of payment
for the shares, the Company will thereafter deliver or cause to be delivered to
the Optionee (or if any other individual or individuals are exercising this
option, to such individual or individuals) at the office of the Company, a
certificate or certificates for the number of shares with respect to which this
option is being exercised, registered in the name or names of the individual or
individuals exercising the option, provided, however, that if any law or
regulation or order of the Securities and Exchange Commission or other body
having jurisdiction in the premises shall require the Company or Optionee (or
other individual or individuals exercising this option) to take any action in
connection with the shares then being purchased, the delivery of the certificate
or certificates for such shares shall be delayed for the period necessary to
take and complete such action.
5. Purchase for Investment. This option is granted on the condition
that the purchase of shares of stock hereunder shall be for the account of the
Optionee (or other individual or individuals exercising this option) for
investment purposes and not with a view to resale or distribution, except that
such condition shall be inoperative if the offering of shares subject to the
option is registered under the Securities Act of 1933, as amended, or if in the
opinion of counsel for the Company such shares may be resold without
registration. At the time of any exercise of the option, the Optionee (or other
individual or individuals exercising this option) will execute such further
agreements as the Company may require to implement the foregoing condition and
to acknowledge the Optionee's (or such other individual's) familiarity with
restrictions on the resale of the shares under applicable securities laws.
6. Termination of Option.
(i) In the event of the Optionee's termination of service on the
Board of Directors of the Company other than by reasons of retirement,
disability (as defined below) or death, the Optionee may at any time within a
period of six months after such termination of service exercise this option to
the extent of the Optionee's Vested Percentage on the date of termination of
service.
(ii) In the event of the Optionee's termination of service on the
Board of Directors by reason of retirement, or disability within the meaning of
Section 22(e)(3) of the Code, this option shall continue to become exercisable
in accordance with the schedule set forth in Section 2 hereof.
(iii) In the event of the death of the Optionee, this option shall
become immediately exercisable in full (100% Vested Percentage) and may be
exercised by the Optionee's estate,
personal representative or beneficiary to whom it has been transferred pursuant
to the Plan at any time within two years after death.
(iv) This option may not be exercised to any extent by anyone after
the date of expiration of the option.
7. Acceleration of Exercise Date Upon Change In Control.
Notwithstanding anything to the contrary herein, upon the occurrence of a Change
in Control (as defined in the Plan), this option, if outstanding at such time,
shall become fully and immediately exercisable and shall remain exercisable
until its expiration, termination or cancellation.
8. General. This Agreement shall be construed as a contract under the
laws of the State of Ohio. It shall bind and, subject to the terms of the Plan,
benefit the parties and their respective successors, assigns and legal
representatives.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the date first above written.
XXX Stores Corporation
By:______________________________
Its: ____________________________
_________________________________
Name
EXHIBIT B
WRITTEN NOTICE OF EXERCISE OF
STOCK OPTION AGREEMENT UNDER
1999 OMNIBUS STOCK INCENTIVE PLAN
XXX Stores Corporation
The undersigned hereby exercises, according to the terms and
conditions thereof, his option pursuant to the 1999 OMNIBUS STOCK INCENTIVE
PLAN, No. _____, for _________ shares of the Common Stock of XXX Stores
Corporation, at a price of $______ per share, said number of shares not to
exceed the Vested Percentage as set forth in said option. The undersigned hereby
makes payment to XXX Stores Corporation of the purchase price in full. Kindly
issue all shares to the undersigned and deliver to the undersigned at the
address stated below.
Name: _____________________________________
Address: _____________________________________
_____________________________________
Social Security Number: _______________________
Signature:_____________________________________
Purchase Price:________________________________
Dated:____________________________
