2005 NQO Stock Option Agreement


 

 

Exhibit 10.2

 

2005
NON-QUALIFIED STOCK OPTION AGREEMENT


 

Ralcorp
Holdings, Inc. (the "Company"), effective February 2, 2005, grants this
Non-Qualified Stock Option to __________ ("Optionee") to purchase a total of
____ shares of its $.01 par value Common Stock (the "Common Stock") at a price
of $45.25 per share pursuant to the Ralcorp Holdings, Inc. 2002 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 (or its designated agent), written notice of exercise together with the
purchase price in either cash, or in shares of Common Stock of the Company at
their fair market value as determined by the Corporate Governance and
Compensation Committee of the Company's Board of Directors (the "Committee"), or
in both cash and such shares.




NOW
THEREFORE, the
Company and Optionee agree, for and in consideration of the terms hereof, as
follows:





	
      1.
	
      Normal
      Exercise -
      This Option becomes exercisable at the rate of 33 1/3% of the total shares
      on each of February 2, 2008, 2009 and 2010. This Option remains
      exercisable through February 2, 2012, unless Optionee is no longer
      employed by the Company, in which case the Option is exercisable only if
      permitted by, and in accordance with, the provisions of paragraph 2
      below.








	
      2.
	
      Accelerated
      Exercise -
      Notwithstanding the above, this Option shall become exercisable before the
      normal exercise dates set forth in paragraph 1 above upon the
      occurrence of any of the events set forth below while Optionee is employed
      by the Company (hereinafter referred to as an "Accelerating Event"). This
      Option shall become exercisable in full on the date of such Accelerating
      Event (except in the case of "a." below), as set forth below, and shall
      remain exercisable for the periods also set forth below or until February
      2, 2012, whichever occurs first. Thereafter, the unexercised portion of
      this Option is forfeited and may not be exercised. An Accelerating Event
      may be any of the following:








	 	
      a.
	
      Stock
      Price; at any time after February 2, 2005, the closing price of the Common
      Stock on the New York Stock Exchange (the "NYSE") is at least $55.00 per
      share for five (5) consecutive trading days, the Option shall accelerate
      as described in the following sentences. Upon the occurrence of this
      Accelerating Event, the Option shall become immediately exercisable on
      February 2, 2008 (if the Accelerating Event occurred earlier) or
      immediately after the occurrence of the Accelerating Event (if the
      Accelerating Event occurs after February 2, 2008) and shall remain
      exercisable through February 2, 2012. In the event the Common Stock no
      longer trades on the NYSE, the Committee shall have the discretion to
      designate another trading market or other valuation method for purposes of
      determining whether this Acceleration Event has
  occurred.





	 	
      b.
	
      Death
      of Optionee; exercisable for three years.





	 	
      c.
	
      Declaration
      of Optionee's total and permanent disability; exercisable for three
      years.





	 	
      d.
	
      Voluntary
      termination of Optionee's employment at or after attainment of age 62;
      exercisable for three years.





	 	
      e.
	
      Involuntary
      termination of employment of Optionee, other than a Termination for Cause;
      exercisable for six months.





	 	
      f.
	
      Occurrence
      of a Change in Control; exercisable for six months after the Optionee's
      voluntary or involuntary termination of employment following the Change in
      Control.








	
      3.
	
      Forfeiture -
      This paragraph sets forth the circumstances under which this Option will
      be forfeited. All shares not exercisable shall be forfeited upon the
      occurrence of any of the following events (any of which is referred to as
      a "Forfeiture Event"):




 

      
a.      Optionee
is Terminated for Cause;

      
b.      Optionee
voluntarily terminates prior to age 62;

      
c.      Optionee
engages in competition with the Company; or 

      
d.     Optionee
engages in any of the following actions:





	
      
	
      (i)
	
      intentional
      misconduct in the performance of Optionee's job with the Company or any
      subsidiary;





	
      
	
      (ii)
	
      being
      openly critical in the media of the Company or any subsidiary or its
      directors, officers, or employees or those of any
    subsidiary;





	
      
	
      (iii)
	
      pleading
      guilty or nolo contendere to any felony or any charge involving moral
      turpitude;





	
      
	
      (iv)
	
      misappropriating
      or destroying Company or subsidiary property including, but not limited
      to, trade secrets or other proprietary
property;





	
      
	
      (v)
	
      improperly
      disclosing material nonpublic information regarding the Company or any
      subsidiary;





	
      
	
      (vi)
	
      after
      ceasing employment with the Company, inducing or attempting to induce any
      employee of the Company or any Subsidiary to leave the employ of the
      Company or any subsidiary;





	
      
	
      (vii)
	
      after
      ceasing employment with the Company, hiring any person who was a manager
      level employee of the Company or any subsidiary;
or





	
      
	
      (viii)
	
      inducing
      or attempting to induce any customer, supplier, lender, or other business
      relation of the Company or any subsidiary to cease doing business with the
      Company or any subsidiary.




 

















 


 


	
      
	
      Upon
      the occurrence of a Forfeiture Event, those portions of this Option not
      exercisable at the time of a Forfeiture Event will be forfeited and may
      not be exercised. Notwithstanding any other provision of this Option, any
      portion of this Option exercisable (either in accordance with the normal
      exercise dates set forth in paragraph 1 or pursuant to an acceleration of
      exercisability under paragraph 2) at the occurrence of a Forfeiture Event
      shall remain exercisable for seven days following the occurrence of a
      Forfeiture Event. Therefore, any exercisable portion of this Option that
      is not exercised within such seven-day period will be forfeited and may
      not be exercised.  The Committee or entire Board of Directors may
      waive any condition of forfeiture described in this
    paragraph.








	
      4.
	
      Change
      in Control -
      In the case of a Change in Control (other than a transaction in which the
      Company is the continuing or surviving corporation and which does not
      result in the outstanding shares of Common Stock being converted into or
      exchanged for different securities, cash or other property, or any
      combination thereof), Optionee shall have the right (subject to the
      provisions of the Plan and any limitation applicable to the Option
      contained herein) thereafter and during the term of the Option, to receive
      upon exercise thereof  the Acquisition Consideration (as defined
      below) receivable upon the Change in Control by a holder of the number of
      shares of Common Stock which would have been obtained upon exercise of the
      Option or portion thereof, as the case may be, immediately prior to the
      Change in Control.








	
      5.
	
      Definitions -
      For purposes of this Agreement, the following terms have the meanings as
      set forth below:








	
      
	
      a.
	
      "Acquisition
      Consideration" -
      Shall mean the kind and amount of shares of the surviving or new
      corporation, cash, securities, evidence of indebtedness, other property or
      any combination thereof receivable in respect of one share of the Common
      Stock upon consummation of a Change in Control. In the case of a Change in
      Control resulting from the event set forth in paragraph 5(b)(i), the value
      of the Acquisition Consideration shall be equal to the highest price paid
      by such person for a share of the Company’s Common Stock during the
      two-year period preceding the date on which such person became the
      beneficial owner of more than 50% of the Company’s Common Stock. If such
      price is paid in the form of non-cash consideration, the value of the
      Acquisition Consideration shall be equal to the fair market value of such
      consideration at the time of the purchase of such
share.








	
      
	
      b.
	
      "Change
      in Control" -
      Shall mean when (i) a person, as defined under the 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 of such business combination or proxy contest, cease to
      constitute a majority of the Board of Directors of the Company or any
      successor to the Company.








	
      
	
      c.
	
      "Termination
      for Cause" -
      Shall mean the Optionee's termination of employment with the Company
      because of the willful engaging by the Optionee in gross misconduct;
      provided, however, that a termination for cause shall not include
      termination attributable to: (i) poor work performance, bad judgment or
      negligence on the part of the Optionee; (ii) an act or omission believed
      by the Optionee in good faith to have been in or not opposed to the best
      interests of the Company and reasonably believed by the Optionee to be
      lawful; or (iii) the good faith conduct of the Optionee in connection with
      a Change in Control (including opposition to or support of such Change in
      Control).








	
      6.
	
      This
      Agreement shall be governed by the laws of the State of Missouri without
      reference to the conflict of laws provisions
thereof.








	
      7.
	
      No
      amendment or modification of this Option shall be valid unless the same
      shall be in writing and signed by the Company and Optionee. The foregoing,
      however, shall not prevent the Company from amending or modifying the Plan
      except that no such amendment or modification shall adversely affect the
      Optionee’s rights under this Option
Agreement.










ACKNOWLEDGED      RALCORP
HOLDINGS, INC.

AND
ACCEPTED:

 

____________________________   BY:         /s/
C. G. Huber, Jr. Optionee                                                                                                 
Secretary

____________________________

Date               



____________________________

Location


____________________________

S.S.#