Exhibit

10.5




 




 




FORM OF


NON–QUALIFIED STOCK OPTION GRANT AGREEMENT




 




FTD, INC.




 




[Date]




 




[Participant]




______________




______________




______________




 




Re:          FTD, Inc. Grant of Non–Qualified

Stock Option




 




Dear ______________:




 




FTD, Inc. (the “Company”)

is pleased to advise you (the “Participant”) that, pursuant to the

Company’s 2002 Long–Term Equity Incentive Plan (the “Plan”), the

Special Subcommittee of the Compensation Committee of the Company’s Board of

Directors (the “Subcommittee”) has granted to you an option (the “Option”)

to acquire shares of the Company’s Class A Common Stock, par value $.01 per

share (the “Common Stock”), as set forth below (the “Option Shares”),

subject to the terms and conditions set forth herein and in the Plan:




 




	

  Number of Option

  Shares


  	

   


  
	

  Date of Grant


  	

   


  
	

  Exercise Price

  per Option Share


  	

   


  
	

  Vesting Dates of

  Option Shares


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  Expiration Date

  of All Option Shares


  	

   


  





 




The Option is not

intended to be an “incentive stock option” within the meaning of Section 422 of

the Internal Revenue Code of 1986.




The Option is intended to

conform in all respects with, and is subject to all applicable provisions of,

the Plan (which is incorporated herein by reference).  Certain capitalized terms used herein shall have the meanings

ascribed to them but not otherwise defined in the Plan.  Inconsistencies between this Agreement and

the Plan shall be resolved in accordance with the terms of the Plan.




 




 





























 




1.             Option.




(a)           Term.  Subject to the terms and conditions set

forth herein and in the Plan, the Company hereby grants to you (or such other

persons as permitted by paragraph 6 below) an Option to purchase the

Option Shares at the exercise price per Option Share set forth above in the

introductory paragraph of this letter (the “Exercise Price”), payable

upon exercise as set forth in paragraph 1(b) below.  The Option shall expire at the close of business on the date set

forth above in the introductory paragraph of this letter (the “Expiration

Date”), which is the tenth anniversary of the date of grant set forth above

in the introductory paragraph of this letter (the “Grant Date”), subject

to earlier expiration as provided in paragraph 2(c) below should you cease to

be an employee, officer or director of the Company or a Subsidiary.  The Exercise Price and the number and kind

of shares of Common Stock or other property for which the Option may be

exercised shall be subject to adjustment as provided in paragraph 7 below.




(b)           Payment of Option Price.  Subject to paragraph 2 below, the Option may

be exercised in whole or in part upon payment of an amount (the “Option

Price”) equal to the product of (i) the Exercise Price and

(ii) the number of Option Shares to be acquired.  Payment of the Option Price shall be made by one or more of the

following means:




(i)            in cash (including

check, bank draft, money order or wire transfer of immediately available

funds);




(ii)           by delivery of

outstanding shares of Common Stock with a Fair Market Value on the date of

exercise equal to the Option Price;




(iii)          by simultaneous

sale through a broker reasonably acceptable to either the Subcommittee or the

Committee of Option Shares acquired on exercise, as permitted under

Regulation T of the Federal Reserve Board;




(iv)          by authorizing the

Company to withhold from issuance a number of Option Shares issuable upon

exercise of the Option which, when multiplied by the Fair Market Value of a

share of Common Stock on the date of exercise, is equal to the Option Price; or




(v)           by any combination

of the foregoing.




2.             Exercisability/Vesting and Expiration.




(a)           Normal Vesting.  The Option granted hereunder may be

exercised only to the extent it has become vested.  The Option shall vest in increments of [___%] commencing on the

[_____] anniversary of the Grant Date and shall become fully vested on the

[_____] anniversary of the Grant Date, as indicated by the Vesting Dates of

Option Shares set forth in the introductory paragraph of this letter.




(b)           Normal Expiration.  In no event shall any part of the Option be

exercisable after the Expiration Date.




(c)           Effect on Vesting and Expiration

of Employment Termination. 

Notwithstanding paragraphs 2(a) and (b) above, the following special

vesting and expiration rules 




 




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shall apply if your

employment or service with the Company terminates prior to the Option becoming

fully vested and/or prior to the Expiration Date:




(i)            Death or

Disability.  If you die or become

subject to a Disability while an employee, officer or director  of, or otherwise performing services for, the

Company or a Subsidiary, then (A)  the unvested portion of the Option shall

expire and be forfeited immediately upon such death or Disability and (B) the

vested portion of the Option shall expire up to 180 days from the date of your

death or Disability, but in no event after the Expiration Date; provided in the

case of a Disability, that you do not engage in Competition during such 180–day

period unless you receive written consent to do so from the Board or the

Subcommittee or the Committee.




(ii)           Retirement.  If you cease to be an employee, officer or

director of, or to perform other services for, the Company or a Subsidiary upon

the occurrence of your retirement, then, at the discretion of either the

Subcommittee or the Committee (A) any portion of the Option which has not yet

vested shall expire and be forfeited immediately upon such retirement;

provided, however, that, in the discretion of either the Subcommittee or the

Committee, all or any portion of the unvested portion of the Option may become

fully vested and exercisable, and (B) the exercise period for all or any

portion of the Option that is exercisable on the effective date of your

retirement shall remain (provided that you do not engage in Competition during

such 90–day period unless you receive written consent to do so from the

Board or the Subcommittee or the Committee) exercisable for, and shall

otherwise terminate at the end of, a period of 90 days after the effective date

of your retirement, but in no event after the Expiration Date.




(iii)          Discharge for

Cause.  If you cease to be an

employee, officer or director  of, or to

perform other services for, the Company or a Subsidiary due to Cause, or if you

do not become an employee, officer or director of, or do not begin performing

other services for, the Company or a Subsidiary for any reason, then all of the

Option shall expire and be forfeited immediately upon such cessation  or

non–commencement, whether or not then vested and exercisable.  In connection with such a Discharge for

Cause, the Company, at the discretion of either the Subcommittee or the

Committee, may repurchase all or any portion of any Option Shares issued

hereunder; provided that any such repurchase shall be subject to the

limitations set forth in Section 6(e)(iii) of the Plan.  The repurchase price for any Shares

repurchased by the Company pursuant to the preceding sentence shall be the

lower of Fair Market Value or the terminated participant’s cost thereof, as

determined in good faith by the Subcommittee or the Committee




(iv)          Other Termination.  Unless otherwise determined by the

Subcommittee or the Committee, if you cease to be an employee, officer or

director of, or to perform other services for, the Company or a Subsidiary

other than by death, Disability, retirement or Discharge for Cause, then (A)

the Option shall survive such cessation and (B) the Option shall expire and

otherwise terminate up to 30 days from the date of such cessation, but in no

event after the Expiration Date; provided that you do not engage in Competition

during such 30–day period unless you receive written consent to do so

from the Board or the Subcommittee or the Committee.




 




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(d)           Change in Control.  If there is a Change in Control, then the

Option shall become vested and fully exercisable as to all the Option Shares

upon the consummation of such Change in Control.




3.             Procedure for Exercise.  You may exercise all or any portion of the Option, to the extent

it has vested and is outstanding, at any time and from time to time prior to

the Expiration Date, by delivering written notice to the Company in the form

attached hereto as Exhibit A, together with payment of the Option Price

in accordance with the provisions of paragraph 1(b) above. The Option may not

be exercised for a fraction of an Option Share.




4.             Withholding of Taxes.




(a)           Participant Election. Unless

otherwise determined by the Subcommittee or the Committee, you may elect to

deliver shares of Common Stock (or have the Company withhold Option Shares acquired

upon exercise of the Option) to satisfy, in whole or in part, the amount the

Company is required to withhold for taxes in connection with the exercise of

the Option.  Such election must be made

on or before the date the amount of tax to be withheld is determined.  Once made, the election shall be

irrevocable.  The fair market value of

the shares to be withheld or delivered will be the Fair Market Value as of the

date the amount of tax to be withheld is determined.




(b)           Company Requirement.  The Company, to the extent permitted or

required by law, shall have the right to deduct from any payment of any kind

(including salary or bonus) otherwise due to you, an amount equal to any

federal, state or local taxes of any kind required by law to be withheld with respect

to the delivery of Option Shares under this Agreement.




5.             Grant of Reload Option.  In the event you exercise all or any portion of the Option (the “Exercised

Option”) and pay all or part of the Option Price with shares of Common

Stock, the Company hereby grants to you (or such other persons as permitted by

paragraph 6 below) an additional option (a “Reload Option”) for a number

of Option Shares equal to the number of shares of Common Stock tendered or

withheld in payment of the Option Price plus the number of shares of Common

Stock, if any, tendered or withheld by you or withheld by the Company to

satisfy any federal, state or local tax withholding requirements in connection

with the exercise of the Exercised Option. 

The terms of each Reload Option, including the date of its expiration

and the terms and conditions of its exercisability and transferability, shall

be the same as the terms of the Exercised Option to which it relates, except

that (i) the grant date for each Reload Option shall be the date of exercise of

the Exercised Option to which it relates and (ii) the exercise price for each

Reload Option shall be the Fair Market Value of the Common Stock on the grant

date of the Reload Option.




6.             Transferability of Option.  Unless either the Subcommittee or the

Committee determines otherwise, you may transfer the Option granted hereunder

only by will or the laws of descent and distribution.  Unless the context requires otherwise, references herein to you

are deemed to include any permitted transferee under this

paragraph 6.  Unless either the

Subcommittee or the Committee determines otherwise, the Option may be exercised

only by: (i) you; (ii) by your executor or administrator or any person to whom

the Option is transferred by will or the laws of descent and distribution; or

(iii) by your guardian or legal representative.




7.             Adjustments. 

In the event of a reorganization, recapitalization, stock split, stock

dividend, combination of shares, merger, consolidation, distribution of assets,

or any other change in the corporate structure or shares of the Company, either

the Subcommittee or the 




 




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Committee shall make such

adjustments as it deems appropriate in the number and kind of shares reserved

for issuance under the Plan, the number and kind of shares covered by the

Option and the Exercise Price specified herein.




8.             Amendment or Substitution of Option.  The terms of the Option may be amended from

time to time by either the Subcommittee or the Committee in its discretion in

any manner that it deems appropriate (including, but not limited to,

acceleration of the date of exercise of the Option);  provided that, except as otherwise provided in paragraph 7 above,

no such amendment shall adversely affect in a material manner any of your

rights under the award without your written consent, and provided further that

neither the Subcommittee nor the Committee shall reduce the exercise price of

the Option without approval of the stockholders of the Company.




* * * * *




 




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                                IN

WITNESS WHEREOF, the undersigned have executed this Non-Qualified Stock Option

Grant Agreement as of the ___ day of _______, 20___.




 




 




	

   


  	

  FTD, INC.


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Name:


  	

   


  
	

   


  	

  Title:


  	

   


  





 




	

  ACKNOWLEDGED AND AGREED:


  
	

   


  
	

   


  
	

  (Signature of Participant)


  





 




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EXHIBIT A




Form of Letter to be Used

to Exercise Non-Qualified Stock Option




 




___________




Date




______________________




______________________




______________________




Attention:              ____________________




 




 




I wish to exercise the

stock option granted on ________ and evidenced by a Non-Qualified Stock Option

Agreement dated as of ____________, to acquire __________ shares of Common

Stock of _______________, at an option price of $_______ per share. In

accordance with the provisions of paragraph 1 of the Non-Qualified Stock Option

Agreement, I wish to make payment of the exercise price (please check all that apply):




 




in cash




by delivery of shares of Common Stock held by me




by simultaneous sale through a broker of Option Shares




by authorizing the

Company to withhold Option Shares




 




Please issue a certificate for these shares in the following name:




 




	

   


  
	

  Name


  
	

   


  
	

  Address


  
	

   


  





 




 




	

   


  	

  Very truly yours,


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Signature


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Typed or Printed Name


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Social Security Number


  





 




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