EXHIBIT 10.23(c)

FORM OF AGREEMENT AND CERTIFICATE OF OPTION

PURSUANT TO THE 2007 LONG TERM INCENTIVE PLAN

OF FINLAY ENTERPRISES, INC.

(for awards granted prior to termination of

Stockholders’ Agreement and Registration Rights Agreement)

Agreement and Certificate of Option (this “Agreement”) dated ________, 20__ (the
“Date of Grant”), between FINLAY ENTERPRISES, INC. (the “Corporation”) and
_______________ (the “Grantee”):

 

1.

The Option.

(a) Subject to the provisions of this Agreement, the Corporation hereby grants
to the Grantee a stock option (the “Option”) to purchase, on the terms and
conditions herein set forth, up to ________ shares of the Corporation’s fully
paid, non-assessable shares of Common Stock, par value $0.01 per share (the
“Shares”), at the option price set forth in Section 2 below.

(b) The Option is granted pursuant to the Corporation’s 2007 Long Term Incentive
Plan (the “Plan”), a copy of which is delivered herewith by the Corporation and
receipt thereof is acknowledged by the Grantee. The Option is subject in its
entirety to all of the applicable provisions of the Plan which are incorporated
herein by reference, and any conflict between the terms of this Agreement and
those of the Plan shall be resolved in favor of the terms of the Plan. The
Option is a “Nonqualified Stock Option” as that term is defined in the Plan.

 

2.

Exercise Price.

The purchase price of the Shares shall be $_______ per Share (the “Exercise
Price”).

 

3.

Exercise of Option.

(a) Except as otherwise provided in the Plan and this Agreement, the Option is
exercisable over a period of ten (10) years from the date hereof (the “Option
Period”) in accordance with the following schedule (the portion of the Option
exercisable in accordance with such schedule being referred to herein as
“Vested”):

 

 

 

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Date

 

Percent of Shares Subject
to Option Exercisable

 

 

 

Commencing on the first anniversary of the Date of Grant until (but not
including) the second anniversary of the Date of Grant

 

[__]%

 

 

 

Commencing on the second anniversary of the Date of Grant until (but not
including) the third anniversary of the Date of Grant

 

[__]%

 

 

 

Commencing on the third anniversary of the Date of Grant until (but not
including) the fourth anniversary of the Date of Grant

 

[__]%

 

 

 

Commencing on the fourth anniversary of the Date of Grant until (but not
including) the fifth anniversary of the Date of Grant

 

[__]%

 

 

 

Commencing on the fifth anniversary of the Date of Grant until (but not
including) the tenth anniversary of the Date of Grant

 

[__]%

Subject to the terms hereof, the Option may be exercised from time to time
during the Option Period as to the total number of Shares allowable under this
Section 3, or any lesser amount thereof, as long as the Grantee is employed by
the Corporation. For purposes of this Agreement, employment by the Corporation
or any Subsidiary (as defined in the Plan) shall be deemed to be employment by
the Corporation.

(b) In the event that the Grantee’s employment is terminated other than by
reason of Retirement, death or Disability (as such terms are defined in the
Plan), (1) any portion of the Option not yet Vested shall thereupon expire and
terminate and (2) any portion of the Option that has Vested may be exercised
during the period ending twenty-one (21) days following such termination, after
which period any unexercised portion of the Option shall expire and terminate;
provided, however, that in the event that the Grantee’s employment is terminated
for Cause (as hereinafter defined), the Option or any unexercised portion
thereof shall immediately upon such termination be permanently cancelled.

(c) In the event that the Grantee’s employment is terminated by reason of death,
the entire Option (or any unexercised portion thereof) shall thereupon be deemed
Vested and may be exercised during the period ending on (but not including) the
first anniversary of such termination, and in the event that the Grantee’s
employment is terminated by reason of Retirement or Disability, the entire
Option (or any unexercised portion thereof) shall thereupon be deemed Vested and
may be exercised during the period ending twenty-one (21) days following such
termination, after which period any unexercised portion of the Option shall
expire and terminate.

(d) If this Option shall extend to one hundred (100) or more Shares, then this
Option may not be exercised for less than one hundred (100) Shares at any one
time, and if this Option shall extend to less than one hundred (100) Shares,
then this Option must be exercised for all such Shares at one time.

 

 

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(e) The number of Shares to which the Grantee shall be entitled and the Exercise
Price shall be proportionately and equitably adjusted in such manner as the
Committee shall determine to maintain the economic value of the Option in the
event any stock dividend, stock split, recapitalization, merger, reorganization,
exchange of shares or similar event occurs in which the number or class of
shares of Common Stock is changed without the receipt or payment of
consideration by the Corporation. Nothing contained herein shall be deemed to
require the Corporation to issue any fractional Shares, and any fractional
Shares issuable upon exercise of the Option may, at the discretion of the
Corporation, be settled in cash or otherwise or shall be forfeited or otherwise
eliminated.

(f) At such time as the Grantee desires to exercise the Option granted hereby,
in whole or in part, the Grantee shall provide to the Corporation an Exercise
Form in the form of Annex A hereto or in such other form authorized by the
Corporation’s General Counsel. The Grantee’s signature at the place provided on
said Exercise Form will evidence the Grantee’s election to purchase Shares of
Common Stock pursuant to the terms and subject to the conditions and limitations
contained in the Plan, in this Agreement and in said Exercise Form. The Option
shall be considered exercised (in full or part, as the case may be) on the date
such Exercise Form is received by the Secretary, together with payment of the
Exercise Price for the Shares to be purchased plus any withholding tax required
under any federal, state and local statutes. The Grantee may elect to have the
amount of any withholding tax withheld from the Shares of Common Stock
purchased.

(g) The Exercise Price shall be paid in full at the time of purchase of the
Shares in cash or by check [ONLY INCLUDE FOR NON-EXECUTIVE OFFICERS: or by
cashless exercise in accordance with the Corporation’s cashless exercise
procedures as in effect from time to time]. If the Option is exercised in
accordance with the provisions of the Plan and this Agreement, then the
Corporation shall deliver to the Grantee certificates representing the number of
Shares in respect of which the Option is being exercised, which Shares shall be
registered in the Grantee’s name.

 

4.

Stockholders’ and Registration Rights Agreements; Additional Repurchase
Provisions.

(a) It is a condition to the grant of the Option that the Grantee execute and
deliver to the Corporation, simultaneously with the execution and delivery of
this Agreement by the Grantee, counterparts of the Amended and Restated
Stockholders’ Agreement dated as of March 6, 1995 and the Registration Rights
Agreement, dated as of May 26, 1993, as amended (respectively the “Stockholders’
Agreement” and the “Registration Rights Agreement”), by and among the
Corporation, David B. Cornstein, Arthur E. Reiner and certain other parties.
Upon the Grantee’s execution and delivery of such agreements, the Grantee will
be deemed to be a “Management Holder” under the Stockholders’ Agreement and a
“Management Stockholder” under the Registration Rights Agreement, and as such
the Grantee will be subject, in addition to the provisions of this Agreement, to
all of the terms, conditions and obligations of such agreements, including,
without limitation, restrictions on the transferability of the Option and any
Shares purchased upon exercise thereof. Two copies of each of such agreements
are enclosed herewith. Capitalized terms used but not otherwise defined herein
are used as defined in the Stockholders’ Agreement.

(b) Notwithstanding anything to the contrary contained herein or in the
Stockholders’ Agreement, in the event that the Grantee’s employment is
terminated for Cause, the Corporation shall have the right, exercisable by
written notice within twenty-one (21) days of such termination of employment, to
repurchase from the Grantee (and any of Grantee’s Permitted Transferees, if
applicable), any and all Shares theretofore purchased by the Grantee hereunder
at a price per Share equal to the Exercise Price in respect of such Shares. For
purposes of this Agreement, termination for “Cause” shall mean termination by
reason of the Grantee’s fraud, dishonesty or commission of a crime, whether or
not in the course of his or her employment.

 

 

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5.

Transferability of Option and Shares.

(a) The Option is not transferable other than by will or by the laws of descent
and distribution and during a Grantee’s lifetime is exercisable only by the
Grantee. Any assignment in violation of this Section 5(a) shall be void and of
no force or effect.

(b) The transferability of the Option and the Shares is limited by the terms of
the Stockholders’ Agreement and the Registration Rights Agreement and by
applicable law.

(c) Without limiting the generality of the foregoing, no purported sale,
assignment or other transfer of the Shares shall be effective unless and until
the transferee of the Shares so transferred executes and delivers to the
Corporation its agreement, in form and substance satisfactory to the
Corporation, to be bound by the provisions of this Agreement.

 

6.

Covenants of the Grantee.

The Grantee’s exercise of the Option shall be subject to the Grantee
acknowledging and agreeing to the following at the time of such exercise:

(a) The Shares may not be sold or otherwise disposed of except in compliance
with the Securities Act of 1933, as amended (the “Act”), and any applicable
securities or “Blue Sky” laws of any state.

(b) The Shares will not be sold, hypothecated, transferred or otherwise disposed
of by the Grantee in any manner, directly or indirectly, (i) without
registration thereof under the Act and any applicable Blue Sky laws unless an
exemption from such registration is available and, if the Corporation so
requests, the Grantee causes counsel satisfactory to the Corporation to deliver
to the Corporation a reasoned written opinion of such counsel in form and
substance satisfactory to the Corporation; or (ii) in violation of any law; or
(iii) in violation of the Stockholders’ Agreement or the Registration Rights
Agreement.

(c) The certificate or certificates representing the Shares shall have an
appropriate legend referring to the terms of this Option.

(d) The Grantee acknowledges that in the event of termination of his or her
employment with the Corporation, his or her rights to exercise this Option are
restricted as set forth in Section 3 above.

 

7.

General Provisions.

This Agreement is subject in all respects to the terms and conditions of the
Plan, which terms and conditions the Grantee is deemed to accept and consent to
by the Grantee’s acceptance of the Option. Nothing contained in this Agreement
shall confer upon the Grantee any right to continue in the employ of the
Corporation or any of it Subsidiaries or shall in any way affect the right and
power of the Corporation or any of its Subsidiaries to dismiss or otherwise
terminate the employment of the Grantee at any time for any reason with or
without cause. This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware. Any dispute arising hereunder shall be
brought before a court of competent jurisdiction in the City, County and State
of New York.

If the foregoing is in accordance with the Grantee’s understanding and accepted
and agreed to by the Grantee, the Grantee may so confirm by signing and
returning the duplicate of this Agreement delivered for that purpose, as well as
one copy of the enclosed Stockholders’ Agreement and Registration Rights
Agreement.

 

 

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FINLAY ENTERPRISES, INC.

 

By

 

 

 

Arthur E. Reiner
Chairman and CEO

 

The foregoing is in accordance with my understanding and is hereby accepted and
agreed.

 

 

 

GRANTEE

 

 

 

 

Date: 

 

 

 

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ANNEX A

EXERCISE FORM

The undersigned hereby irrevocably exercises, pursuant to the Agreement and
Certificate of Option dated as of _________________, _____ (the “Option”), by
and between Finlay Enterprises, Inc. (the “Corporation”) and the undersigned,
the option to purchase ________ Shares of Common Stock (the “Subject Shares”) of
the Corporation at the exercise price of $ _______ per Subject Share. Payment of
the exercise price shall be made as follows:

 

o

cash for $_______ enclosed herewith

[INCLUDE ONLY FOR NON-EXECUTIVE OFFICERS:

and/or

 

o

by cashless exercise in accordance with the Corporation’s cashless exercise
procedures as in effect from time to time.]

The undersigned o does o does not [select one] elect to have the Corporation
withhold the number of Subject Shares needed to satisfy the undersigned’s tax
withholding obligations. If the undersigned does not elect to have withholding
taxes paid with Subject Shares, the undersigned further agrees to pay to the
Corporation any withholding tax required by any federal, state and local
statutes and regulations.

Dated: ________________, _____

 

 

 

 

(Name of Option Grantee - Please Type or Print)

 

 

 

 

(Signature of Option Grantee)

 

 

 

 

(Address-Please Type or Print)

 

 

 

 

(Social Security No.)

 

 

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