Exhibit 10.2

 

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HD SUPPLY HOLDINGS, INC.

EMPLOYEE STOCK OPTION AGREEMENT

 

This Employee Stock Option Agreement (the “Agreement”), effective            
(the “Grant Date”), between HD Supply Holdings, Inc., a Delaware corporation,
and [          ] (hereinafter referred to as the “Employee”), is being entered
into pursuant to the HD Supply Holdings, Inc. 2013 Omnibus Incentive Plan (the
“Plan”).  Capitalized terms used herein without definition shall have the
meanings set forth in the Plan.

 

The Company and the Employee hereby agree as follows:

 

Section 1.       Grant of Options.

 

(a)                                 Confirmation of Grant.  The Company hereby
evidences and confirms, effective as of the Grant Date, its grant to the
Employee of options to purchase             Shares of Common Stock (the
“Options”).  The Options are not intended to be incentive stock options under
the Code.  This Agreement is entered into pursuant to, and the Options granted
hereunder are subject to, the terms and conditions of the Plan, which are
incorporated herein by reference.  If there is any inconsistency between any
express provision of this Agreement and any express provision of the Plan, the
express provision of the Plan shall govern.

 

(b)                                 Option Price.  The Option Price for the
purchase of Shares subject to this Option is the Fair Market Value of such
Shares on the Grant Date.

 

Section 2.      Vesting and Exercisability.

 

(a)                                 Vesting.  Except as otherwise provided in
Section 2(b) or Section 5, the Options shall vest [select one: (1) on the first
anniversary of the Grant Date; or (2) on the second anniversary of the Grant
Date; (3) on the third anniversary of the Grant Date; (4) on the fourth
anniversary of the Grant Date; (5) in two equal annual installments on each of
the first and second anniversaries of the Grant Date; or (6) in three equal
annual installments on each of the first through third anniversaries of the
Grant Date; or (7) in four equal annual installments on each of the first
through fourth anniversaries of the Grant Date], subject to the continuous
employment of the Employee with the Company or any of its Subsidiaries until the
applicable vesting date; provided that if the Employee’s employment with the
Company is terminated by reason of the Employee’s death or Disability (a
“Special Termination”), any Options held by the Employee shall immediately vest
as of the effective date of such Special Termination.  Upon employment
termination due to Retirement, all Options that have not become vested as of the
date of Employee’s Retirement shall remain outstanding and shall further vest or
be forfeited as follows: (i) unless the Administrator determines that the
Employee (x) has previously engaged in an act or omission to act that would
constitute Cause if the Employee had not retired or (y) to the extent not
otherwise included in the definition of Cause applicable to the Employee, has
engaged in Competitive Activity during the one-year period following the
Employee’s Retirement (or such longer

 

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period applicable to the Employee) (the conduct set forth in clause (x) or (y),
“Prohibited Activity”), any Options that would have vested on each scheduled
vesting date following Employee’s Retirement if Employee had remained in
continuous service with the Company shall become vested on each such date; and
(ii) if the Administrator determines that the Employee has engaged in Prohibited
Activity, all of the Employee’s unvested Options as of the date of such
determination shall terminate immediately and be forfeited without consideration
therefor.  For purposes of this Agreement, “Retirement” means termination of
employment with the Company and its Subsidiaries on or after Employee’s
attainment of age sixty-two (62) and having at least five (5) years of
continuous service with the Company and its Subsidiaries.

 

(b)                                 Discretionary Acceleration.  The
Administrator, in its sole discretion, may accelerate the vesting or
exercisability of all or a portion of the Options, at any time and from time to
time.

 

(c)                                  Exercise.  Once vested in accordance with
the provisions of this Agreement, the Options may be exercised at any time and
from time to time prior to the date the Options terminate pursuant to
Section 3.  The Options may only be exercised with respect to whole shares of
Common Stock and must be exercised in accordance with Section 4.

 

Section 3.      Termination of Options.

 

(a)                                 Normal Termination Date.  Unless earlier
terminated pursuant to Section 2(a), Section 3(b) or Section 5, the Options
shall terminate on the tenth anniversary of the Grant Date (the “Normal
Termination Date”), if not exercised prior to such date.

 

(b)                                 Early Termination.  If the Employee’s
employment with the Company terminates for any reason, any Options held by the
Employee that have not vested before the effective date of such termination of
employment (determined without regard to any statutory or deemed or express
contractual notice period) or that do not become vested on such date in
accordance with Section 2 shall terminate immediately upon such termination of
employment (determined without regard to any statutory or deemed or express
contractual notice period), except for any vested Options that may become vested
following Retirement pursuant to Section 2(a).  If the Employee’s employment is
terminated for Cause, all Options (whether or not then vested or exercisable)
shall automatically terminate immediately upon such termination.  All vested
Options held by the Employee following the effective date of a termination of
employment and Options vesting during Retirement in accordance with
Section 2(a) (the “Covered Options”) shall remain exercisable until the date
that is the first to occur of (i) the 90-day anniversary of the effective date
of the Employee’s termination of employment (determined without regard to any
deemed or express statutory or contractual notice period); (ii) the second
anniversary of the effective date of the Employee’s termination of employment
due to Retirement for Options vested at the time of such Retirement, and the
second anniversary of the vesting of any portion of the Options after Retirement
in accordance with Section 2(a), (iii) the second anniversary of the effective
date of the Employee’s termination of employment in the case of a Special
Termination, (iv) the Normal Termination Date, or (v) the cancellation of the
Options pursuant to Section 5, and if not exercised prior to such date the
Options shall automatically

 

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terminate on such date.  If on the first date of the period set forth in
Section 3(b)(i) or (ii), as applicable, the Option is not exercisable solely due
to any of the restrictions set forth in Section 4(b)(i), (ii) or (iii), the
Option will not expire until the earlier of the Normal Termination Date or 90
days from the first date on which exercise of the Option ceases to be barred by
any such restriction.

 

Section 4.      Manner of Exercise.

 

(a)                                 General.  Subject to such reasonable
administrative regulations as the Administrator may adopt from time to time, the
exercise of vested Options by the Employee shall be pursuant to procedures
contained in the Plan and such other procedures established by the Administrator
from time to time and shall include the Employee specifying in writing the
proposed date on which the Employee desires to exercise a vested Option (the
“Exercise Date”), the number of whole shares with respect to which the Options
are being exercised (the “Exercise Shares”) and the aggregate Option Price for
such Exercise Shares (the “Exercise Price”), or such other or different
requirements as may be specified by the Administrator. Unless otherwise
determined by the Administrator, (i) on or before the Exercise Date the Employee
shall deliver to the Company full payment for the Exercise Shares in United
States dollars in cash, or cash equivalents satisfactory to the Administrator,
in an amount equal to the Exercise Price plus (if applicable) any required
withholding taxes or other similar taxes, charges or fees, or, pursuant to a
broker-assisted exercise program established by the Company, the Employee may
exercise vested Options by an exercise and sell procedure (cashless exercise) in
which the  Exercise Price (together with any required withholding taxes or other
similar taxes, charges or fees) is deducted from the proceeds of the exercise of
an Option and (ii) the Company shall register the issuance of the Exercise
Shares on its records (or direct such issuance to be registered by the Company’s
transfer agent).  The Administrator may require the Employee to furnish or
execute such other documents as the Administrator shall reasonably deem
necessary (i) to evidence such exercise or (ii) to comply with or satisfy the
requirements of the Securities Act, applicable state or non-U.S. securities laws
or any other law.

 

(b)                                 Restrictions on Exercise; Restrictions on
Transfer.  Notwithstanding any other provision of this Agreement, the Options
may not be exercised in whole or in part, (i)  unless all requisite approvals
and consents of any governmental authority of any kind shall have been secured,
(ii) unless the purchase of the Exercise Shares shall be exempt from
registration under applicable U.S. federal and state securities laws, and
applicable non-U.S. securities laws, or the Exercise Shares shall have been
registered under such laws, (iii) at any time that exercise of the Option would
violate the Company’s insider trading policy, and (iv) unless all applicable
U.S. federal, state and local and non-U.S. tax withholding requirements shall
have been satisfied. The Company shall use its commercially reasonable efforts
to obtain any consents or approvals referred to in clause (i) of the preceding
sentence, but shall otherwise have no obligations to take any steps to prevent
or remove any impediment to exercise described in such sentence.  The Options
are exercisable during the Employee’s life by the Employee only and are not
transferable by the Employee other than by the laws of descent and distribution
to the estate of the Employee upon the Employee’s death, and any purported
transfer in violation of this sentence shall be void ab initio.

 

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(c)                                  Exercise Preclearance. Employee must
exercise the Options in accordance with the Company’s insider trading policy and
any applicable pre-trading clearance procedures.

 

Section 5.      Change in Control.  In the event of a Change in Control, the
treatment of any outstanding Options shall be governed by Article XIV of the
Plan.

 

Section 6.      Non-Competition/Non-Solicitation; Confidential Information.

 

(a)                                 Non-Competition/Non-Solicitation.  In
consideration of the receipt of the Restricted Stock granted pursuant to this
Agreement the receipt and sufficiency of which Employee hereby acknowledges, the
Employee agrees that while he or she is employed by the Company or any of its
Subsidiaries (collectively, the “Company Group”) and for a period of one
(1) year after the effective date of termination of his or her employment with
the Company Group for any reason, he or she will not:

 

(i)                                     Either directly or indirectly, engage in
any business or enterprise (whether as owner, partner, officer, director,
employee, independent contractor, consultant, investor, lender or otherwise,
except as the holder of not more than one percent (1%) of the outstanding stock
of a publicly-held company) that competes anywhere in any geographic area where
the Company does business, including but not limited to the United States and
Canada and their respective states, territories or provinces (collectively, the
“Territory”) with the business of the Company Group as then engaged in or any
prospective business which the Company is actively developing or implementing by
any member of the Company Group or any of their respective Affiliates;

 

(ii)                                  Either alone or in association with
others, directly or indirectly, (x) solicit, or permit any organization directly
or indirectly controlled by the Employee to solicit, any employee of the Company
Group to leave the employ of the Company Group, or (y) solicit for employment or
engage as an independent contractor, or permit any organization directly or
indirectly controlled by the Employee to solicit for employment or engage as an
independent contractor, any person who was employed by the Company Group at any
time during the term of the Employee’s employment with the Company Group and
whose employment with the Company Group has been terminated for a period less
than six months; or

 

(iii)                               Either alone or in association with others,
directly or indirectly, solicit or otherwise attempt to establish for himself or
herself or any other person, firm or entity, anywhere in the Territory any
business relationship of a nature that is competitive with the business or
relationship of any member of the Company Group with any person, firm or
corporation which was a customer, client, vendor, supplier or distributor (or an
actively sought prospective customer, client, vendor, supplier or distributor)
of any member of the Company Group and with whom the Employee had direct or
indirect contact or knowledge, either personally or as a result of Employee’s
supervision of any Company Group employee, or encourage, induce, attempt to
induce, solicit or attempt to solicit any such person or entity to terminate

 

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his or her relationship with the Company.  For purposes of this
Section 5(a)(iii), the Company Group’s business or relationship with a customer,
client, vendor, supplier or distributor (or actively sought prospective business
or relationship) shall have existed: (x) at any time during the Employee’s
period of employment with the Company Group (in the case of any activity during
such period of employment); or (y) during the twelve-month period preceding the
effective date of the Employee’s termination of employment with the Company
Group (in the case of any activity after such termination of employment).

 

(b)                                 Confidential Information.  The Employee
agrees not to disclose any confidential or proprietary trade secrets, customer
lists, drawings, designs, information regarding product development, marketing
plans, sales plans, manufacturing plans, management organization information,
operating policies or manuals, business plans, financial records, packaging
design or other financial, commercial, business or technical information
relating to any member of the Company or any of their respective Affiliates,
including, without limitation, any such information or materials that any member
of the Company or any of their respective Affiliates receives belonging to
suppliers, customers or others who do business with any member of the Company or
any of their respective Affiliates (collectively, “Confidential Information”),
to any third person unless such Confidential Information has been previously
disclosed to the public or is in the public domain (other than by reason of the
Employee’s breach of this Section 6.

 

(c)                                  Reasonable Protection.  The Company and the
Employee agree that, during the period of the Employee’s employment with the
Company, (i) the Employee will have a prominent role in the management of the
business, and the development of the goodwill, of the Company, and will obtain
Confidential Information that could be used to compete unfairly against members
of the Company and their respective Affiliates and (ii) the covenants and
restrictions contained in this Section 6 are necessary for the protection of the
business and goodwill of the Company and the Employee considers them to be
reasonable for such purpose.

 

(d)                                 Injunctive Relief.  The Employee agrees that
any breach of the covenants contained in this Section 6 is likely to cause the
Company substantial and irrevocable damage which is difficult to measure and, in
the event of any such breach or threatened breach, that the Company, in addition
to such other remedies which may be available, shall have the right to
(i) effect the forfeiture of any unvested Options held by the Employee and/or
(ii) obtain an injunction from a court restraining such a breach or threatened
breach and the right to specific performance of the provisions of this Section 6
and hereby waives the adequacy of a remedy at law as a defense to such relief.

 

(e)                                  Blue Pencil.  The Employee agrees that in
the event that any court of competent jurisdiction shall finally hold that any
provision of this Section 6 is void or constitutes an unreasonable restriction
against the Employee, the provisions of this Section 6 shall not be rendered
void but shall apply to such extent as such court may determine constitutes a
reasonable restriction under the circumstances.

 

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(f)                                   The provisions of this Section 6 shall
survive in accordance with its terms the termination of the Options without
regard to whether the Options have been exercised.

 

Section 7.      Miscellaneous.

 

(a)                                 Acknowledgement and Acceptance. Employee
must accept this grant by executing and delivering a signed copy of this
Agreement to the Company or by electronically accepting this grant, within
thirty (30) days of the Grant Date, pursuant to the online acceptance procedure
established by the Company. Otherwise, the Company may, at its discretion,
rescind the Agreement and the Options granted hereunder in its entirety.

 

(b)                                 Withholding.  The Company shall require the
Employee to satisfy any applicable U.S. federal, state and local and non-U.S.
tax withholding or other similar charges or fees that may arise in connection
with the grant, vesting, exercise or purchase of the Options.

 

(c)                                  Authorization to Share Personal Data.  The
Employee authorizes the Company or any Affiliate of the Company that has or
lawfully obtains personal data relating to the Employee to divulge or transfer
such personal data to the Company or to a third party, in each case in any
jurisdiction, if and to the extent reasonably appropriate in connection with
this Agreement or the administration of the Plan.

 

(d)                                 No Rights as Stockholder; No Voting Rights. 
The Employee shall have no rights as a stockholder of the Company with respect
to any shares of Common Stock covered by the Options until the exercise of the
Options and delivery of the Common Stock.  No adjustment shall be made for
dividends or other rights for which the record date is prior to the delivery of
the Common Stock.

 

(e)                                  No Guarantee of Employment.  Nothing in the
Plan or this Agreement shall interfere with or limit in any way the right of the
Company to terminate any Employee’s employment at any time, or confer upon any
Employee any right to continue in the employ or retention of the Company.

 

(f)                                   Interpretation.  The Administrator shall
have full power and discretion to construe and interpret the Plan (and any
rules and regulations issued thereunder) and this Award.  Any determination or
interpretation by the Administrator under or pursuant to the Plan or this
Agreement shall be final and binding and conclusive on all persons affected
hereby.

 

(g)                                  Forfeiture of Awards.  The Options granted
hereunder (and gains earned or accrued in connection therewith) shall be subject
to such generally applicable policies as to forfeiture and recoupment
(including, without limitation, upon the occurrence of material financial or
accounting errors, financial or other misconduct or Competitive Activity) as may
be adopted by the Administrator or the Board from time to time and communicated
to the Employee, and is otherwise subject to forfeiture or disgorgement of
profits as provided by the Plan.

 

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(h)                                 Consent to Electronic Delivery.  By entering
into this Agreement and accepting the Options evidenced hereby, the Employee
hereby consents to the delivery of information (including, without limitation,
information required to be delivered to the Employee pursuant to applicable
securities laws) regarding the Company, the Plan, this Agreement and the Options
via Company web site or other electronic delivery.

 

(i)                                     Binding Effect; Benefits.  This
Agreement shall be binding upon and inure to the benefit of the parties to this
Agreement and their respective successors and assigns.  No provision of this
Agreement, express or implied, is intended or shall be construed to give any
person other than the parties to this Agreement or their respective successors
or assigns any legal or equitable right, remedy or claim under or in respect of
any agreement or any provision contained herein.

 

(j)                                    Amendment.  This Agreement may not be
amended, modified or supplemented orally, but only by a written instrument
executed by the Employee and the Company.

 

(k)                                 Assignability.  Neither this Agreement nor
any right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by the Company or the Employee without the prior written
consent of the other party.

 

(l)                                     Applicable Law.  This Agreement shall be
governed in all respects, including, but not limited to, as to validity,
interpretation and effect, by the internal laws of the State of Delaware,
without reference to principles of conflict of law that would require
application of the law of another jurisdiction.

 

(m)                             Waiver of Jury Trial.  Each party hereby waives,
to the fullest extent permitted by applicable law, any right he, she or it may
have to a trial by jury in respect of any suit, action or proceeding arising out
of this agreement or any transaction contemplated hereby.  Each party
(i) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges
that he, she or it and the other party hereto have been induced to enter into
the Agreement by, among other things, the mutual waivers and certifications in
this Section 7(m).

 

(n)                                 Limitations of Actions. No lawsuit relating
to this Agreement may be filed before a written claim is filed with the
Administrator and is denied or deemed denied as provided in the Plan and any
lawsuit must be filed within one year of such denial or deemed denial or be
forever barred.

 

(o)                                 Section and Other Headings, etc.  The
section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

 

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(p)                                 Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Company and Employee have executed this Agreement on the
date set forth below.

 

 

HD SUPPLY HOLDINGS, INC.

 

 

 

 

 

By:

 

 

 

Dan S. McDevitt

 

 

General Counsel and Corporate Secretary

 

 

 

Date Signed:

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

Employee ID:

 

 

 

 

 

Date Signed:

 

 

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