Exhibit 10.2









EXHIBIT 10.2




CSS INDUSTRIES, INC.




2004 EQUITY COMPENSATION PLAN



NONQUALIFIED STOCK OPTION GRANT



This NONQUALIFIED STOCK OPTION GRANT, dated as of                      (the “Date of Grant”),
is delivered by CSS Industries, Inc. (the “Company”) to                      (the
“Grantee”).



RECITALS




WHEREAS, the Human Resources Committee of the Board of Directors of the Company (the
“Committee”) has determined to grant the Grantee an equity award (the “Equity
Award”) for shares of Common Stock of the Company, par value $0.10 per share (the “Company
Stock”);



WHEREAS, the Equity Award is comprised of two separate grants, a nonqualified stock option and
a stock bonus award; and



WHEREAS, the Committee has determined that the nonqualified stock option portion of the Equity
Award shall be issued under the CSS Industries, Inc. 2004 Equity Compensation Plan, as amended (the
“Plan”) and the terms and conditions of such nonqualified stock option shall be
memorialized in this Nonqualified Stock Option Grant (the “Grant”).



NOW, THEREFORE, the parties to this Grant, intending to be legally bound hereby, agree as
follows:



1. Grant of Option. Subject to the terms and conditions set forth in this Grant and
in the Plan, the Company hereby grants to the Grantee a nonqualified stock option (the
“Option”) to purchase                      shares of Company Stock at an exercise price of $                     per
share. The Option shall become vested and exercisable according to Paragraphs 2 and 3 below.




2. Vesting of Option.




(a) Unless a Change of Control (as defined below) occurs prior to the end of the Performance
Period (as defined below), the vesting and exercisability of the Option is contingent upon
achievement of the Performance Goal (as described in subparagraph (b) below) at any time during the
Performance Period and the Grantee satisfying the continuing employment condition described in
Paragraph 3 below.



(b) The Option will become vested if the Company’s Total Stockholder Return (“TSR”)
(as described in subparagraph (c) below) at any time during the Performance Period is _____% or more
as certified by the Committee (the “Performance Goal”). The Committee may determine
whether the Performance Goal has been achieved at any time after it has been achieved; provided
however, that the Committee will determine whether the Performance Goal has been achieved prior to
the anniversary of the Date of Grant next following the earliest date on which the Performance Goal
is achieved, and provided further that if such earliest date occurs within the thirty (30) day
period immediately preceding an anniversary date of the Date of Grant, then the Committee will
determine whether the Performance Goal has been achieved as soon as administratively practicable
following, and in any event not later than 30 days following, the date of achievement of the
Performance Goal. Upon making a determining that the Performance Goal
has been achieved, the Committee will certify that the Performance Goal has been so achieved.
The date, if any, on which the Committee certifies that the Performance Goal has been achieved is
referred to herein as the “Certification Date”.


 


 









 





(c) TSR represents stock price performance and dividend accumulation during the Performance
Period for the Company. For purposes of this calculation, the initial stock price is equal to the
closing stock price for the Company Stock on the last trading day prior to the Date of Grant, and
the ending stock price is determined using the thirty (30) day average stock price for each day
during Performance Period. The thirty (30) day average stock price is the average of the closing
stock prices for the thirty (30) trading days that end on the applicable date. To determine stock
price performance, a dividend adjustment factor will be determined. The dividend adjustment factor
takes into account each per share dividend paid during the Performance Period through the
applicable measurement date, as well as the effect of any appreciation in stock price by reason of
deeming the dividend to be reinvested in the stock. TSR is determined on each measurement date by
adjusting the ending stock price on such date as determined above by the dividend adjustment factor
and comparing it to the initial stock price. The initial Company Stock price is $                     per share.



(d) Unless a Change of Control occurs prior to the end of the Performance Period, if the
Performance Goal is not achieved at any time during the Performance Period no portion of the Option
may become vested, the Grantee may not exercise any portion of the Option, and the Option shall
terminate.



(e) In order to become vested in any portion of the Option, the Grantee must be Employed by
the Employer (as defined in the Plan) on the Certification Date or date of a Change of Control, if
earlier. If the Grantee ceases to be Employed by the Employer for any reason or no reason prior to
the Certification Date or Change of Control, if earlier, no portion of the Option shall become
vested and the Option shall be forfeited immediately following the date the Grantee ceases to be
Employed by the Employer.



(f) If a Change of Control occurs prior to the end of the Performance Period and prior to
achievement of the Performance Goal, then the Performance Period will end on the date of the Change
of Control, the Performance Goal will be deemed achieved as of the date of the Change of Control,
and the Option will be fully vested as of the date of the Change of Control, provided that the
Grantee is Employed by the Employer on the date of the Change of Control. For purposes of this
Grant, the term “Change of Control” shall mean as such term is defined in the Plan.



(g) For purposes of this Grant, the term “Performance Period” shall mean the
                     year period
beginning on the Date of Grant and ending on                     .


 


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3. Exercisability of the Option. If the Option becomes vested as described in Paragraph 2
above, the Option will become exercisable according to the applicable schedule described in this
Paragraph 3, provided that the Grantee is Employed by the Employer on the applicable exercisability
date:




(a) Performance Goal Achieved by First Anniversary of Date of Grant. Except as
provided in subparagraph (e) below, if, as certified by the Committee, the Performance Goal is
first achieved at any time prior to, or on, the first anniversary of the Date of Grant, the Option
will become exercisable according to the following schedule:



	 	 	 	 	 
	 	 	Shares for Which the Option is	 
	Exercisability Date	 	Exercisable on the Exercisability Date	 
	 
	 	 	 	 
	The Certification Date or the first
anniversary of Date of Grant, whichever
is later
	 	 	25	%
	 
	 	 	 	 
	Second anniversary of Date of Grant
	 	 	25	%
	 
	 	 	 	 
	Third anniversary of Date of Grant
	 	 	25	%
	 
	 	 	 	 
	Fourth anniversary of Date of Grant
	 	 	25	%






(b) Performance Goal Achieved After First Anniversary of Date of Grant, but by Second
Anniversary of the Date of Grant. Except as provided in subparagraph (e) below, if, as
certified by the Committee, the Performance Goal is first achieved at any time after the first
anniversary of the Date of Grant, but not later than the second anniversary of the Date of Grant,
the Option will become exercisable according to the following schedule:



	 	 	 	 	 
	 	 	Shares for Which the Option is	 
	Exercisability Date	 	Exercisable on the Exercisability Date	 
	 
	 	 	 	 
	The Certification Date or the second
anniversary of Date of Grant, whichever
is later
	 	 	50	%
	 
	 	 	 	 
	Third anniversary of Date of Grant
	 	 	25	%
	 
	 	 	 	 
	Fourth anniversary of Date of Grant
	 	 	25	%






 


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(c) Performance Goal Achieved After Second Anniversary of Date of Grant, but by Third
Anniversary of the Date of Grant. Except as provided in subparagraph (e) below, if, as
certified by the Committee, the Performance Goal is first achieved at any time after the second
anniversary of the Date of Grant, but not later than the third anniversary of the Date of Grant,
the Option will become exercisable according to the following schedule:







	 	 	 	 	 
	 	 	Shares for Which the Option is	 
	Exercisability Date	 	Exercisable on the Exercisability Date	 
	 
	 	 
	The Certification Date or the third
anniversary of Date of Grant, whichever
is later
	 	 	75	%
	Fourth anniversary of Date of Grant
	 	 	25	%






(d) Performance Goal Achieved After Third Anniversary of Date of Grant, but by Fourth
Anniversary of the Date of Grant. Except as provided in subparagraph (e) below, if, as
certified by the Committee, the Performance Goal is first achieved at any time after the third
anniversary of the Date of Grant, but not later than the fourth anniversary of the Date of Grant,
the Option will become exercisable according to the following schedule:



	 	 	 	 	 
	 	 	Shares for Which the Option is	 
	Exercisability Date	 	Exercisable on the Exercisability Date	 
	 
	 	 	 	 
	The Certification Date or the fourth
anniversary of Date of Grant, whichever
is later
	 	 	100	%






(e) Change of Control Prior to Fourth Anniversary of the Date of Grant. If a Change
of Control occurs prior to the fourth anniversary of the Date of Grant, the Option will be fully
exercisable as of the date of the Change of Control.



(f) Performance Goal Not Achieved by Fourth Anniversary of the Date of Grant. Except
in the event of a Change of Control prior to the end of the Performance Period, if the Performance
Goal is not achieved by the fourth anniversary of the Date of Grant, no portion of the Option will
become exercisable and the Option shall be forfeited.



The exercisability of the Option is cumulative, but shall not exceed 100% of the shares of Company
Stock subject to the Option. If the applicable schedule would produce fractional shares, the
number of shares for which the Option becomes exercisable shall be rounded up to the nearest whole
Share. The Committee may accelerate the period over which the Option becomes exercisable based
upon the Grantee’s individual performance.




4. Term of Option.




(a) The Option shall have a term of                      (_)
years from the Date of Grant and shall
terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to
the provisions of this Grant or the Plan.



(b) The Option shall automatically terminate upon the happening of the first of the following
events:



(i) The expiration of the 90-day period after the Grantee ceases to be Employed by the
Employer, if the termination is for any reason other than death, termination for Cause (as defined
in the Plan), or the Grantee’s sole determination to terminate his or her employment (other than by
reason of retirement approved by the Committee).


 


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(ii) The expiration of the 180-day period after the Grantee ceases to be Employed by the
Employer, if the Grantee dies while Employed by the Employer or retires from such employment with
the consent of the Committee.



(iii) The date on which the Grantee ceases to be Employed by the Employer on account of a
termination for Cause by the Employer (as defined in the Plan) or the Grantee’s voluntary
termination (other than by reason of retirement approved by the Committee). In addition,
notwithstanding the prior provisions of this Paragraph 4, if the Grantee engages in conduct that
constitutes Cause after the Grantee’s employment or service terminates, the Option shall
immediately terminate.



Notwithstanding the foregoing, in no event may the Option be exercised after the date that is
immediately before the seventh anniversary of the Date of Grant. Any portion of the Option that is
not exercisable at the time the Grantee ceases to be Employed by the Employer shall immediately
terminate.




5. Exercise Procedures.




(a) Subject to the provisions of Paragraphs 2, 3 and 4 above, the Grantee may exercise part or
all of the vested and exercisable portion of the Option by giving the Company written notice of
intent to exercise in the manner provided in this Grant, specifying the number of shares of Company
Stock as to which the Option is to be exercised and the method of payment. Payment of the exercise
price shall be made in accordance with procedures established by the Committee from time to time
based on type of payment being made but, in any event, prior to issuance of the shares of Company
Stock. The Grantee shall pay the exercise price (i) in cash, (ii) by delivering shares of Company
Stock owned by the Grantee and having a Fair Market Value (as defined in the Plan) on the date of
exercise at least equal to the exercise price or by attestation (on a form prescribed by the
Committee) to ownership of shares of Company Stock having a Fair Market Value on the date of
exercise at least equal to the exercise price, (iii) by payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board, or (iv) by such other method as
the Committee may approve, to the extent permitted by applicable law. The Committee may impose
from time to time such limitations as it deems appropriate on the use of shares of Company Stock to
exercise the Option.



(b) The obligation of the Company to deliver shares of Company Stock upon exercise of the
Option shall be subject to all applicable laws, rules, and regulations and such approvals by
governmental agencies as may be deemed appropriate by the Committee, including such actions as
Company counsel shall deem necessary or appropriate to comply with relevant securities laws and
regulations.



(c) All obligations of the Company under this Grant shall be subject to the rights of the
Employer as set forth in the Plan to withhold amounts required to be withheld for any taxes, if
applicable. Unless Committee determines otherwise, the Grantee may elect to satisfy any tax
withholding obligation of the Employer with respect to the Option by having shares of Company Stock
withheld up to an amount that does not exceed the minimum applicable withholding tax rate for
federal (including FICA), state and local tax liabilities.


 


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6. Change of Control. Except as set forth above, the provisions of the Plan applicable to
a Change of Control shall apply to the Option, and, in the event of a Change of Control, the
Committee may take such actions as it deems appropriate pursuant to the Plan.




7. Restrictions on Exercise. Except as the Committee may otherwise permit pursuant to the
Plan, only the Grantee may exercise the Option during the Grantee’s lifetime and, after the
Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan)
solely by the legal representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the extent that the
Option is exercisable pursuant to this Grant.




8. Acknowledgement By Grantee. By accepting this Grant, the Grantee hereby acknowledges
receipt of a copy of the Plan and agrees to be bound by the terms of the Plan and this Grant. The
Grantee further agrees to be bound by the determinations and decisions of the Committee with
respect to this Grant and the Plan and the Grantee’s rights to benefits under this Grant and the
Plan, and agrees that all such determinations and decisions of the Committee shall be binding on
the Grantee, his or her beneficiaries and any other person having or claiming an interest under
this Grant and the Plan on behalf of the Grantee. The Grantee further hereby acknowledges and
agrees that the Grantee will indemnify the Employer and hold the Employer free and harmless of,
from and against any and all losses, damage, obligation or liability, and all costs and expenses
(including reasonable attorneys’ fees) incurred in connection therewith, which may be suffered or
incurred on account or by reason of any act or omission of the Grantee or the Grantee’s heirs,
executors, administrators, personal representatives, successors and assigns in breach or violation
of the provisions of the Plan or the agreements of the Grantee set forth herein.




9. Grant Subject to Plan Provisions. This Grant is made pursuant to the Plan, the terms of
which are incorporated herein by reference, and in all respects shall be interpreted in accordance
with the Plan. The grant and exercise of the Option are subject to interpretations, regulations
and determinations concerning the Plan established from time to time by the Committee in accordance
with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights
and obligations with respect to withholding taxes, (b) the registration, qualification or listing
of the shares of Company Stock, (c) changes in capitalization of the Company and (d) other
requirements of applicable law. The Committee shall have the authority to interpret and construe
the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any
questions arising hereunder.




10. No Employment or Other Rights. The grant of the Option shall not confer upon the
Grantee any right to be retained by or in the employ or service of the Employer and shall not
interfere in any way with the right of the Employer to terminate the Grantee’s employment or
service at any time. The right of the Employer to terminate the Grantee’s employment or service at
any time for any reason is specifically reserved.



 


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11. No Stockholder Rights. Neither the Grantee, nor any person entitled to exercise the
Grantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges
of a stockholder with respect to the shares of Company Stock subject to the Option, until
certificates for shares of Company Stock have been issued upon the exercise of the Option.




12. Assignment and Transfers. Except as the Committee may otherwise permit pursuant to the
Plan, the rights and interests of the Grantee under this Grant may not be sold, assigned,
encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by
the laws of descent and distribution. In the event of any attempt by the Grantee to alienate,
assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as
provided for in this Grant, or in the event of the levy or any attachment, execution or similar
process upon the rights or interests hereby conferred, the Company may terminate the Option by
notice to the Grantee, and the Option and all rights hereunder shall thereupon become null and
void. The rights and protections of the Company hereunder shall extend to any successors or
assigns of the Company and to the Company’s parents, subsidiaries, and affiliates. This Grant may
be assigned by the Company without the Grantee’s consent.




13. Applicable Law; Entire Agreement. The validity, construction, interpretation and
effect of this instrument shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof.
This Grant, together with the Non-Disclosure and Non-Competition Agreement (or, if applicable, the
Non-Disclosure Agreement) provided to the Grantee herewith, the provisions of which are
incorporated herein by reference, sets forth the entire agreement of the parties with respect to
the subject matter hereof and may not be changed or terminated except by a writing signed by the
Grantee and the Company. This Grant and any undertakings and indemnities delivered hereunder shall
be binding upon and shall inure to the benefit of the Grantee and the Grantee’s heirs, distributees
and personal representatives and to the Company, its successors and assigns.




14. Notice. Any notice to the Company provided for in this instrument shall be addressed
to the Company in care of the Secretary at the corporate headquarters of the Company, and any
notice to the Grantee shall be addressed to such Grantee at the current address shown on the
payroll of the Employer, or to such other address as the Grantee may designate to the Employer in
writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed
envelope addressed as stated above, registered and deposited, postage prepaid, in a post office
regularly maintained by the United States Postal Service.




[SIGNATURE PAGE FOLLOWS]




 


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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest
this Grant, and the Grantee has executed this Grant, effective as of the Date of Grant.



	 	 	 	 	 	 	 

	ATTEST	 	 	 	CSS INDUSTRIES, INC.
	 
	 	 	 	 	 	 
	(Corporate Seal)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By: 	 	 
	 

	 	 	 	 	 





I hereby accept the Option described in this Grant, and I agree to be bound by the terms of the
Plan and this Grant. I hereby further agree that all the decisions and determinations of the
Committee shall be final and binding.




	 	 	 	 	 	 	 

	 	 	ACCEPTED:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 





 


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