Document:

exv10w25

 

EXHIBIT 10.25

HELEN OF TROY LIMITED

NONSTATUTORY STOCK OPTION AGREEMENT

	 	 	 	 	 	 	 
	Name of Optionee:

	 	 
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date of Grant:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date I:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date II:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date III:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date IV:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date V:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Total Option Shares Granted:
	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Exercise Price:
	 	$ 
	 	 	 	 
	 
	 	 	 	 	 	 
	Expiration Date:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Right of Relinquishment
Granted:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Relinquishment Proportion:

	 	
        %
	 	 	 	 
	 
	 	 	 	 	 	 
	Withholding Right:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	Helen of Troy Limited	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

     Optionee acknowledges receipt of a copy of which is annexed hereto, and represents that he or
she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to
all of the terms and provisions thereof. Optionee has reviewed the Plan, this Option and the
Exercise of Stock Option in their entirety and fully understands all provisions of this Option and
the Exercise of Stock Option. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising under the Plan.

	 	 	 	 	 
	Dated:

	 	 
	 	 
	 

	 	 	 	 
	 

	 	, Optionee     	 	 

103

 

     Helen of Troy Limited, a Bermuda company (the “Company”), hereby grants to the person whose
name is written on the first page hereof (the “Optionee”), an option to purchase the total number
of shares stated on the first page hereof (the “Shares”) of the Company’s common stock (the “Common
Stock”), at the price determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Amended and Restated 1998 Stock Option and Restricted Stock Plan
(as amended, the “Plan”) adopted by the Company, which Plan is incorporated herein by reference.
Terms that are not defined herein but that are defined in the Plan shall have the same meanings as
in the Plan when used herein.

     1. Nature of the Option. This Option is not intended to qualify as an “incentive
stock option” as defined in Section 422(b) of the Code.

     2. Exercise Price. The exercise price for each share of Common Stock is set forth on
the first page hereof (the “Exercise Price”), but in no event shall the Exercise Price be less than
100% of the Fair Market Value of the Shares subject to this Option on the Date of Grant.

     3. Exercise of Option. Subject to Sections 6, 7 and 8 of this
Agreement, this Option shall be exercisable during its term as follows:

          (a) Right to Exercise.

     (i) Subject to the restrictions and conditions in this Nonstatutory Stock
Option Agreement (the “Agreement”) and the Plan, this Option may be exercised in
whole or in part but only as to the number of Shares and within the time intervals
set forth on the first page hereof.

     (ii) Notwithstanding Section 3(a)(i) above, in the event of the
dissolution or liquidation of the Company, other than pursuant to a Reorganization
(hereinafter defined), this Option shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the date so fixed
shall be given to the Optionee and the Optionee shall have the right during such
period to exercise this Option as to all or any part of the Shares covered hereby
including Shares as to which this Option would not otherwise be exercisable by
reason of an insufficient lapse of time.

          In the event of a Reorganization in which the Company is not the surviving or
acquiring company, or in which the Company is or becomes a wholly-owned subsidiary
of another company after the effective date of the Reorganization, then:

          (A) if there is no plan or agreement respecting the Reorganization
(“Reorganization Agreement”) or if the Reorganization Agreement does not
specifically provide for the change, conversion or exchange of the Shares under
outstanding unexercised options for securities of another corporation, then the
Committee shall take such action, and this Option shall terminate, as provided
above; or

          (B) if there is a Reorganization Agreement and if the Reorganization Agreement
specifically provides for the change, conversion or exchange of the shares under
outstanding or unexercised options for securities of another corporation, then the
Committee shall adjust the Shares under this Option in a manner not inconsistent
with the provisions of the Reorganization Agreement for the adjustment, change,
conversion or exchange of such stock and such options.

104

 

     The term “Reorganization” as used in this Section 3(a)(ii)
shall mean any statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale, pursuant to an agreement
with the Company, of securities of the Company pursuant to which the Company is or
becomes a wholly-owned subsidiary of another company after the effective date of the
Reorganization.

     Except as provided above in this Section 3(a), and except as otherwise provided
by the Committee in its sole discretion, this Option shall terminate immediately
prior to the consummation of such proposed action.

     (iii) Notwithstanding Section 3(a)(i), and subject to
Section 3(a)(ii) above, in the event there occurs a Change of
Control, the Optionee shall have the right to exercise from and after the date of
the Change in Control this Option held by the Optionee in whole or in part
notwithstanding that this Option may not be fully exercisable.

     (iv) This Option may not be exercised for a fraction of a share.

     (b) Method of Exercise. This Option shall be exercisable at such times and
under such conditions as shall be determined by the Committee, including without limitation
performance criteria with respect to Company and/or the Optionee, and in accordance with the
following terms:

     (i) This Option shall be exercisable from time to time by delivering an
Exercise of Stock Option to the Committee in substantially the form of Exhibit
“A” (the “Notice of Exercise”). The Notice of Exercise shall state the number
of Shares in respect of which this Option is being exercised and shall contain or be
accompanied by such other representations and agreements as to the Optionee’s
investment intent with respect to such Shares as may be required by the Company
pursuant to the provisions of the Plan. Such Notice of Exercise shall be signed by
the Optionee and shall be delivered in person or by certified mail to the Committee.
The Notice of Exercise shall be accompanied by payment of the Exercise Price.

     (ii) No Shares will be issued pursuant to the exercise of this Option
unless such issuance and such exercise shall comply with this Agreement, the Plan,
all relevant provisions of law and the requirements of any stock exchange upon which
the shares may then be listed.

     (iii) The Company may refrain from delivering or transferring Shares issued
hereunder and under the Plan until the Committee has determined that the Optionee
has tendered to the Company any federal, state or local tax owed by the Optionee as
a result of exercising this Option, or disposing of any Shares, in the event that
the Company has a legal liability to satisfy such tax.

     (iv) The Company shall not be liable to any person or entity for damages due to
any delay in the delivery or issuance of any stock certificate for any reason
whatsoever.

105

 

     (c) Number of Shares Exercisable. Each exercise of this Option shall reduce,
by an equal number, the total number of Shares that may thereafter be purchased under this
Option, but shall not affect the exercise of any other options granted by the Committee and
held by the Optionee.

     4. Method of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination thereof:

     (a) cash or certified check;

     (b) if authorized by the Committee, delivery to the Committee of other Shares of Common
Stock having a Fair Market Value on the date of delivery equal to the aggregate Exercise
Price of the Shares as to which this Option is being exercised; or

     (c) if authorized by the Committee, any combination of the above methods or any other
method of payment as may be permitted under applicable law and the Plan.

     5. Restrictions on Exercise. This Option may not be exercised if the issuance of such
Shares upon such exercise or the method of payment of consideration for such Shares would
constitute a violation of any applicable federal or state securities or other law or regulation.
As a condition to the exercise of this Option, the Committee may require the Optionee to make any
representation or warranty to the Company as may be required by any applicable law or regulation.

     6. Termination of Status as an Employee. Subject to the terms of Sections
7 and 8 of this Option, the Optionee holding this Option who ceases to be an
Employee of the Company may, but only until the earlier of the date (a) this Option expires, or (b)
thirty (30) days after the date the Optionee ceases to be an Employee, exercise this Option to the
extent that the Optionee was entitled to exercise it on such date; provided, however, that in the
event the Optionee is an Employee and is terminated without cause (as determined in the sole
discretion of the Committee) then the thirty (30) day period described in this sentence shall be
automatically extended to six (6) months, unless the Committee further extends such period in its
sole discretion. The Committee shall have the authority to determine the date the Optionee ceases
to be an Employee. The Exercise Price paid in connection with the exercise of this Option under
this Section 6 shall be by cash or certified check only. To the extent the
Optionee is not entitled to exercise this Option on such date, or if the Optionee does not exercise
this Option within the time specified herein, this Option shall terminate.

     7. Permanent and Total Disability of the Optionee. Notwithstanding the provisions of
Section 6 above, in the event the Optionee is unable to continue to perform
Services for the Company or any of its Subsidiaries as a result of the Optionee’s Permanent and
Total Disability, the Optionee may exercise this Option in whole or in part notwithstanding that
this Option may not be fully exercisable, but only until the earlier of the date (a) this Option
expires, or (b) twelve (12) months from the date of termination of Services due to such Permanent
and Total Disability. Payment of the Exercise Price shall be by cash or certified check only. To
the extent the Optionee is not entitled to exercise this Option on such date or if the Optionee
does not exercise it within the time specified in this Section 7, this Option shall
terminate.

     8. Death of the Optionee. Upon the death of the Optionee, this Option shall terminate
and be of no further effect; provided, however, notwithstanding the provisions of Section
6 above, in the event the Optionee’s death occurs during the term of this Option and, at
the time of death, the Optionee was an

106

 

Employee, this Option may be exercised in whole or in part notwithstanding that this Option
may not have been fully exercisable on the date of the Optionee’s death, but only until the earlier
of the date (a) this Option expires, or (b) twelve (12) months from the date of the Optionee’s
death, by the Optionee’s estate or by a person who acquired the right to exercise this Option by
bequest or inheritance. The Exercise Price paid in connection with the exercise of this Option
under this Section 8 shall be by cash or certified check only. To the extent this Option
is not entitled to be exercised on such date or if this Option is not exercised within the time
specified herein, this Option shall terminate.

     9. Non-Transferability of Option. This Option may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules thereunder, and is not
assignable by operation of law or subject to execution, attachment or similar process. Except as
otherwise provided herein, this Option may be exercised during the Optionee’s lifetime only by the
Optionee. Any attempted sale, pledge, assignment, hypothecation or other transfer of this Option
contrary to the provisions hereof and the levy of any execution, attachment or similar process upon
this Option shall be null and void and without force or effect. No transfer of this Option by will
or by the laws of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an authenticated copy of the will
and/or such other evidence as the Board may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and conditions of this
Agreement with respect to this Option. The terms of this Option shall be binding upon the
executors, administrators, heirs and successors of the Optionee.

     10. Confidentiality and Non-Competition. By accepting this Option and as a condition
to the exercise of this Option and the enjoyment of benefits of the Plan, the Optionee agrees:

          (a) Confidentiality. During the period the Optionee provides Services (or the
Optionee’s engaging in any other activity with or for the Company) and for a two year period
thereafter, the Optionee shall treat and safeguard as confidential and secret all Confidential
Information received by the Optionee at any time. Without the prior written consent of the
Company, except as required by law, the Optionee will not disclose or reveal any Confidential
Information to any third party whatsoever or use the same in any manner except in connection with
the businesses of the Company and its Subsidiaries. In the event that the Optionee is requested or
required (by oral questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or other process) to disclose (i) any Confidential Information or (ii)
any information relating to his opinion, judgment or recommendations concerning the Company or its
Subsidiaries as developed from the Confidential Information, the Optionee will provide the Company
with prompt written notice of any such request or requirement so that the Company may seek an
appropriate protective order or waive compliance with the provisions contained herein. If, failing
the entry of a protective order or the receipt of a waiver hereunder, the Optionee is, in the
reasonable opinion of his counsel, compelled to disclose Confidential Information, the Optionee
shall disclose only that portion and will exercise best efforts to obtain assurances that
confidential treatment will be accorded such Confidential Information.

          (b) Non-Competition. During the period that the Optionee provides Services to the
Company or its Subsidiaries, and for a two-year period thereafter, the Optionee shall not, without
prior written consent of the Committee, do, directly or indirectly, any of the following:

     (i) own, manage, control or participate in the ownership, management, or
control of, or be employed or engaged by or otherwise affiliated or associated with,
any

107

 

other corporation, partnership, proprietorship, firm, association or other
business entity, or otherwise engage in any business which competes with the
business of the Company or any of its Subsidiaries (as such business is conducted
during the term the Optionee provides Services to the Company or its Subsidiaries)
in the geographical regions in which such business is conducted; provided, however,
that the ownership of a maximum of one percent of the outstanding stock of any
publicly traded corporation shall not violate this covenant; or

     (ii) employ, solicit for employment or assist in employing or soliciting
for employment any present, former or future employee, officer or agent of the
Company or any of its Subsidiaries.

          In the event any court of competent jurisdiction should determine that the foregoing covenant
of non-competition is not enforceable because of the extent of the geographical area or the
duration thereof, then the Company and the Optionee hereby petition such court to modify the
foregoing covenant to the extent, but only to the extent, necessary to create a covenant which is
enforceable in the opinion of such court, with the intention of the parties that the Company shall
be afforded the maximum enforceable covenant of non-competition which may be available under the
circumstances and applicable law.

          (c) Failure to Comply. The Optionee acknowledges that remedies at law for any breach
by him or her of this Section 10 may be inadequate and that the damages resulting
from any such breach are not readily susceptible to being measured in monetary terms. Accordingly,
the Optionee acknowledges that upon his or her violation of any provision of this Section
10, the Company will be entitled to immediate injunctive relief and may obtain an order
restraining any threatened or future breach. The Optionee further agrees, subject to the proviso
at the end of this sentence, that if he or she violates any provisions of this Section
10, the Optionee shall immediately forfeit any rights and benefits under the Plan and shall
return to the Company this Option to the extent unexercised and shall return any Shares held by the
Optionee received upon exercise of this Option together with any proceeds from sales of any Shares
received upon exercise of this Option; provided, however, that upon violation of subsection (b) of
this Section 10, the forfeiture and return provisions contained in this sentence
shall apply only to this Option to the extent this Option has become exercisable, and in any such
case the proceeds of sales therefrom, during the two year period immediately prior to termination
of the Optionee’s Services. Nothing in this Section 10 will be deemed to limit, in
any way, the remedies at law or in equity of the Company, for a breach by the Optionee of any of
the provisions of this Section 10.

          (d) Notice. The Optionee agrees to provide written notice of the provisions of this
Section 10 to any future employer of the Optionee, and the Company expressly
reserves the right to provide such notice to the Optionee’s future employer(s).

          (e) Severability. If any provisions or part of any provision of this Section
10 is held for any reason to be unenforceable, (i) the remainder of this Section
10 shall nevertheless remain in full force and effect and (ii) such provision or part shall
be deemed to be amended in such manner as to render such provision enforceable.

     11. Term of Option. This Option may not be exercised after the expiration date, which
date is set forth on the first page of this Option.

108

 

     12. Subject to Plan. This Option is subject to all of the terms and conditions of the
Plan, and specifically to the powers of the Committee to make interpretations of the Plan and of
options granted thereunder, and of the Committee to alter, amend, suspend or discontinue the Plan
subject to the limitations expressed in the Plan. By acceptance hereof, the Optionee acknowledges
receipt of a copy of the Plan, represents that he or she has read the terms and provisions of the
Plan, and accepts this Option subject to all of the terms and provisions thereof and recognizes and
agrees that all determinations, interpretations or other actions respecting the Plan may be made by
the Committee, and that such determinations, interpretations or other actions are final, conclusive
and binding upon all parties, including the Optionee.

     13. Holding Period. As a condition to the granting of this Option, unless the
Committee otherwise consents in writing, the Optionee shall not sell or otherwise dispose of any
Shares acquired pursuant to the exercise of this Option for a period of six (6) months following
the Date of Grant

109exv10w26

 

EXHIBIT 10.26

HELEN OF TROY LIMITED

INCENTIVE STOCK OPTION AGREEMENT

	 	 	 	 	 	 	 
	Name of Optionee:

	 	 
	 	 
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date of Grant:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date I:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date II:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date III:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date IV:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Vest Date V:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Total Option Shares Granted:

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Exercise Price:

	 	$ 
	 	 	 	 
	 
	 	 	 	 	 	 
	Expiration Date:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Right of Relinquishment
Granted:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Relinquishment Proportion:

	 	
        %
	 	 	 	 
	 
	 	 	 	 	 	 
	Withholding Right:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	Helen of Troy Limited	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

     Optionee acknowledges receipt of a copy of which is annexed hereto, and represents that he or
she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to
all of the terms and provisions thereof. Optionee has reviewed the Plan, this Option and the
Exercise of Stock Option in their entirety and fully understands all provisions of this Option and
the Exercise of Stock Option. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee upon any questions arising under the Plan.

	 	 	 	 	 
	Dated:

	 	 
	 	 
	 

	 	 	 	 
	 

	 	, Optionee     	 	 

110

 

     Helen of Troy Limited, a Bermuda company (the “Company”), hereby grants to the person whose
name is written on the first page hereof (the “Optionee”), an option to purchase the total number
of shares stated on the first page hereof (the “Shares”) of the Company’s common stock (the “Common
Stock”), at the price determined as provided herein, and in all respects subject to the terms and
provisions of the Amended and Restated 1998 Stock Option and Restricted Stock Plan, (as amended,
the “Plan”), adopted by the Company, which Plan is incorporated herein by reference. Terms that
are not defined herein but that are defined in the Plan shall have the same meanings as in the Plan
when used herein.

     1. Nature of the Option. This Option is intended to qualify as an “incentive stock
option” as defined in Section 422(b) of the Code (“ISO”) to the extent that the aggregate Fair
Market Value (determined as of the Date of Grant) of Shares of Common Stock that are exercisable
for the first time by the Optionee during any calendar year does not exceed $100,000. The
remaining Shares covered by this Option, if any, shall be deemed to be non-statutory options.

     2. Exercise Price. The exercise price for each share of Common Stock is set forth on
the first page hereof (the “Exercise Price”), but in no event shall the Exercise Price be less than
100% of the Fair Market Value of the Shares subject to this Option on the Date of Grant (or 110% in
the case the Optionee is a Ten-Percent Shareholder on the Date of Grant).

     3. Exercise of Option. Subject to the terms of Sections 6, 7
and 8 of this Agreement, this Option shall be exercisable during its term as follows:

          (a) Right to Exercise.

     (i) Subject to the restrictions and conditions in this Incentive Stock Option
Agreement (the “Agreement”) and the Plan, this Option may be exercised in whole or
in part but only as to the number of Shares and within the time intervals set forth
on the first page hereof.

     (ii) Notwithstanding Section 3(a)(i) above, in the event of the
dissolution or liquidation of the Company, other than pursuant to a Reorganization
(hereinafter defined), this Option shall terminate as of a date to be fixed by the
Committee, provided that not less than 30 days written notice of the date so fixed
shall be given to the Optionee and the Optionee shall have the right during such
period to exercise this Option as to all or any part of the Shares covered hereby
including Shares as to which this Option would not otherwise be exercisable by
reason of an insufficient lapse of time.

          In the event of a Reorganization in which the Company is not the surviving or
acquiring company, or in which the Company is or becomes a wholly-owned subsidiary
of another company after the effective date of the Reorganization, then:

          (A) if there is no plan or agreement respecting the Reorganization
(“Reorganization Agreement”) or if the Reorganization Agreement does not
specifically provide for the change, conversion or exchange of the Shares under
outstanding unexercised options for securities of another corporation, then the
Committee shall take such action, and this Option shall terminate, as provided
above; or

111

 

          (B) if there is a Reorganization Agreement and if the Reorganization Agreement
specifically provides for the change, conversion or exchange of the shares under
outstanding or unexercised options for securities of another corporation, then the
Committee shall adjust the Shares under this Option in a manner not inconsistent
with the provisions of the Reorganization Agreement for the adjustment, change,
conversion or exchange of such stock and such options.

     The term “Reorganization” as used in this Section 3(a)(ii)
shall mean any statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale, pursuant to an agreement
with the Company, of securities of the Company pursuant to which the Company is or
becomes a wholly-owned subsidiary of another company after the effective date of the
Reorganization.

     Except as provided above in this Section 3(a), and except as
otherwise provided by the Committee in its sole discretion, this Option shall
terminate immediately prior to the consummation of such proposed action.

     (iii) Notwithstanding Section 3(a)(i) and subject to
Section 3(a)(ii) above, in the event there occurs a Change of
Control, the Optionee shall have the right to exercise from and after the date of
the Change in Control this Option in whole or in part notwithstanding that this
Option may not be fully exercisable.

     (iv) This Option may not be exercised for a fraction of a share.

     (b) Method of Exercise. This Option shall be exercisable at such times and
under such conditions as shall be determined by the Committee, including without limitation
performance criteria with respect to Company and/or the Optionee, and in accordance with the
following terms:

     (i) This Option shall be exercisable from time to time by delivering an
Exercise of Stock Option to the Committee in substantially the form of Exhibit
“A” (the “Notice of Exercise”). The Notice of Exercise shall state the number
of Shares in respect of which this Option is being exercised and shall contain or be
accompanied by such other representations and agreements as to the Optionee’s
investment intent with respect to such Shares as may be required by the Company
pursuant to the provisions of the Plan. Such Notice of Exercise shall be signed by
the Optionee and shall be delivered in person or by certified mail to the Committee.
The Notice of Exercise shall be accompanied by payment of the Exercise Price.

     (ii) No Shares will be issued pursuant to the exercise of this Option unless
such issuance and such exercise shall comply with this Agreement, the Plan, all
relevant provisions of law and the requirements of any stock exchange
upon which the shares may then be listed.

     (iii) The Company may refrain from delivering or transferring Shares issued
hereunder and under the Plan until the Committee has determined that the Optionee
has tendered to the Company any federal, state or local tax owed by the Optionee as
a result

112

 

of exercising this Option, or disposing of any Shares, in the event that the
Company has a legal liability to satisfy such tax.

     (iv) The Company shall not be liable to any person or entity for damages due to
any delay in the delivery or issuance of any stock certificate for any reason
whatsoever.

     (c) Number of Shares Exercisable. Each exercise of this Option shall reduce,
by an equal number, the total number of Shares that may thereafter be purchased under this
Option, but shall not affect the exercise of any other options granted by the Committee and
held by the Optionee.

     4. Method of Payment. Payment of the Exercise Price shall be by any of the following:

     (a) cash or certified check;

     (b) if authorized by the Committee, delivery to the Committee of other Shares of Common
Stock having a Fair Market Value on the date of delivery equal to the aggregate Exercise
Price of the Shares as to which this Option is being exercised; or

     (c) if authorized by the Committee, any combination of the above methods or any other
method of payment as may be permitted under applicable law and the Plan.

     5. Restrictions on Exercise. This Option may not be exercised if the issuance of such
Shares upon such exercise or the method of payment of consideration for such Shares would
constitute a violation of any applicable federal or state securities or other law or regulation.
As a condition to the exercise of this Option, the Committee may require the Optionee to make any
representation and warranty to the Company as may be required by any applicable law or regulation.

     6. Termination of Status as an Employee. Subject to the terms of
Sections 7 and 8 of this Option, the Optionee holding this Option who
ceases to be an Employee of the Company may, but only until the earlier of the date (a) this Option
expires, or (b) thirty (30) days after the date the Optionee ceases to be an Employee, exercise
this Option to the extent that the Optionee was entitled to exercise it on such date; provided,
however, that in the event the Optionee is an Employee and is terminated without cause (as
determined in the sole discretion of the Committee) then the thirty (30) day period described in
this sentence shall be automatically extended to ninety (90) days, unless the Committee further
extends such period in its sole discretion. The Committee shall have the authority to determine
the date the Optionee ceases to be an Employee. The Exercise Price paid in connection with the
exercise of this Option under this Section 6 shall be by cash or certified check
only. To the extent that the Optionee was not entitled to exercise this Option on such date, or if
the Optionee does not exercise it within the time specified herein, this Option shall terminate.

     7. Disability of the Optionee. Notwithstanding the terms of Section 6
above, in the event the Optionee is unable to continue to perform Services for the Company or any
of its Subsidiaries as a result of the Optionee’s Permanent and Total Disability, and at the time
such Permanent and Total Disability begins the Optionee was an Employee and had been an Employee
since the Date of Grant, the Optionee may exercise this Option in whole or in part notwithstanding
that this Option may not be fully exercisable, but only until the earlier of the date (a) this
Option expires, or (b) twelve (12) months from

113

 

the date of termination of Services due to such Permanent and Total Disability. To the extent
the Optionee is not entitled to exercise this Option on such date or if the Optionee does not
exercise it within the time specified herein, this Option shall terminate.

     8. Death of the Optionee. Upon the death of the Optionee, this Option shall terminate
and be of no further effect; provided, however, notwithstanding the provisions of Section
6 above, in the event the Optionee’s death occurs during the term of this Option and, at
the time of death, the Optionee was an Employee and had been an Employee since the Date of Grant,
this Option may be exercised in whole or in part notwithstanding that this Option may not have been
fully exercisable on the date of the Optionee’s death, but only until the earlier of the date (a)
this Option expires, or (b) twelve (12) months from the date of the Optionee’s death, by the
Optionee’s estate or by a person who acquired the right to exercise this Option by bequest or
inheritance. To the extent this Option is not entitled to be exercised on such date or if this
Option is not exercised within the time specified herein, this Option shall terminate.

     9. Non-Transferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws
of descent and distribution or pursuant to a qualified domestic relations order as defined by the
Code or Title I of the Employee Retirement Income Security Act, or the rules thereunder, and is not
assignable by operation of law or subject to execution, attachment or similar process. Except as
otherwise provided herein, this Option may be exercised during the Optionee’s lifetime only by the
Optionee. Any attempted sale, pledge, assignment, hypothecation or other transfer of this Option
contrary to the provisions hereof and the levy of any execution, attachment or similar process upon
this Option shall be null and void and without force or effect. No transfer of this Option by will
or by the laws of descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an authenticated copy of the will
and/or such other evidence as the Board may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and conditions of this
Agreement with respect to this Option. The terms of this Option shall be binding upon the
executors, administrators, heirs and successors of the Optionee.

     10. Confidentiality and Non-Competition. By accepting this Option and as a condition
to the exercise of this Option and the enjoyment of benefits of the Plan, the Optionee agrees:

          (a) Confidentiality. During the period that the Optionee provides Services (or the
Optionee’s engaging in any other activity with or for the Company) and for a two year period
thereafter, the Optionee shall treat and safeguard as confidential and secret all Confidential
Information received by the Optionee at any time. Without the prior written consent of the
Company, except as required by law, the Optionee will not disclose or reveal any Confidential
Information to any third party whatsoever or use the same in any manner except in connection with
the businesses of the Company and its Subsidiaries. In the event that the Optionee is requested or
required (by oral questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or other process) to disclose (i) any Confidential Information or (ii)
any information relating to his opinion, judgment or recommendations concerning the Company or its
Subsidiaries as developed from the Confidential Information, the Optionee will provide the Company
with prompt written notice of any such request or requirement so that the Company may seek an
appropriate protective order or waive compliance with the provisions contained herein. If, failing
the entry of a protective order or the receipt of a waiver hereunder, the Optionee is, in the
reasonable opinion of his counsel, compelled to disclose Confidential Information, the Optionee
shall disclose only that portion and will exercise best efforts to obtain assurances that
confidential treatment will be accorded such Confidential Information.

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          (b) Non-Competition. During the period that the Optionee provides Services to the
Company or its Subsidiaries, and for a two-year period thereafter, the Optionee shall not, without
prior written consent of the Committee, do, directly or indirectly, any of the following:

               (i) own, manage, control or participate in the ownership, management, or control of, or be
employed or engaged by or otherwise affiliated or associated with, any other corporation,
partnership, proprietorship, firm, association or other business entity, or otherwise engage in any
business which competes with the business of the Company or any of its Subsidiaries (as such
business is conducted during the term the Optionee provides Services to the Company or its
Subsidiaries) in the geographical regions in which such business is conducted; provided, however,
that the ownership of a maximum of one percent of the outstanding stock of any publicly traded
corporation shall not violate this covenant; or

               (ii) employ, solicit for employment or assist in employing or soliciting for employment any
present, former or future employee, officer or agent of the Company or any of its Subsidiaries.

          In the event any court of competent jurisdiction should determine that the foregoing
covenant of non-competition is not enforceable because of the extent of the geographical area or
the duration thereof, then the Company and the Optionee hereby petition such court to modify the
foregoing covenant to the extent, but only to the extent, necessary to create a covenant which is
enforceable in the opinion of such court, with the intention of the parties that the Company shall
be afforded the maximum enforceable covenant of non-competition which may be available under the
circumstances and applicable law.

          (c) Failure to Comply. The Optionee acknowledges that remedies at law for any breach
by him or her of this Section 10 may be inadequate and that the damages resulting
from any such breach are not readily susceptible to being measured in monetary terms. Accordingly,
the Optionee acknowledges that upon his or her violation of any provision of this Section
10, the Company will be entitled to immediate injunctive relief and may obtain an order
restraining any threatened or future breach. The Optionee further agrees, subject to the proviso
at the end of this sentence, that if he or she violates any provisions of this Section
10, the Optionee shall immediately forfeit any rights and benefits under this Plan and
shall return to the Company this Option to the extent unexercised and shall return any Shares held
by the Optionee received upon exercise of this Option together with any proceeds from sales of any
Shares received upon exercise of this Option; provided, however, that upon violation of subsection
(b) of this Section 10, the forfeiture and return provisions contained in this
sentence shall apply only to this Option to the extent it has become exercisable, and in any such
case the proceeds of sales therefrom, during the two year period immediately prior to termination
of the Optionee’s Services. Nothing in this Section 10 will be deemed to limit, in
any way, the remedies at law or in equity of the Company, for a breach by the Optionee of any of
the provisions of this Section 10.

          (d) Notice. The Optionee agrees to provide written notice of the provisions of this
Section 10 to any future employer of the Optionee, and the Company expressly
reserves the right to provide such notice to the Optionee’s future employer(s).

          (e) Severability. If any provisions or part of any provision of this Section
10 is held for any reason to be unenforceable, (i) the remainder of this Section
10 shall nevertheless remain in full

115

 

           force and effect and (ii) such provision or part shall be deemed to be amended in such manner
as to render such provision enforceable.

     11. Term of Option. This Option may not be exercised after the expiration date, which
date is set forth on the first page of this Option.

     12. Subject to Plan. This Option is subject to all of the terms and conditions of the
Plan, and specifically to the powers of the Committee to make interpretations of the Plan and of
options granted thereunder, and of the Committee to alter, amend, suspend or discontinue the Plan
subject to the limitations expressed in the Plan. By acceptance hereof, the Optionee acknowledges
receipt of a copy of the Plan, represents that he or she has read the terms and provisions of the
Plan, and accepts this Option subject to all of the terms and provisions thereof and recognizes and
agrees that all determinations, interpretations or other actions respecting the Plan may be made by
the Committee, and that such determinations, interpretations or other actions are final, conclusive
and binding upon all parties, including the Optionee.

     13. Early Disposition of Stock Subject to ISO. The Optionee understands that if any
Shares received under this Option are disposed of within two (2) years after the date of this
Agreement or within one (1) year after such Shares were transferred to the Optionee, then the
Optionee will be treated for federal income tax purposes as having received ordinary income at the
time of such disposition in an amount equal to the excess of the Fair Market Value of the Shares at
the time such Shares were delivered to the Optionee less the price paid for the Shares. The
Optionee hereby agrees to notify the Committee in writing within ten (10) days after the date of
any such disposition and immediately deliver to the Company any amount of federal income tax
withholding required by law. The Optionee understands that if the Optionee disposes of such Shares
at any time after the expiration of such two-year and one-year holding periods, any gain on such
sale will be taxed at capital gain rates.

     14. Qualification as an Incentive Stock Option. The Optionee understands that,
subject to the terms of Section 2 of this Agreement, this Option is intended to
qualify as an “incentive stock option” within the meaning of section 422(b) of the Code. The
Optionee understands, further, that the Exercise Price for the Shares subject to this Option has
been set by the Committee at a price that the Committee has determined to be not less than 100%
(or, if the Optionee owned at the time of grant more than 10% of the voting securities of the
Company, 110%) of the Fair Market Value of the Shares on the Date of Grant. The Company believes
that the methodology by which the Committee valued the Shares at such time represented a good faith
attempt, as defined in the Code, at reaching an accurate appraisal of the Fair Market Value of the
Shares. The Optionee understands and acknowledges, however, that the Company shall not be
responsible for any additional tax liability incurred by the Optionee in the event that the
Internal Revenue Service is to determine that this Option does not qualify as an incentive stock
option, for any reason, including without limitation a determination that the Committee’s valuation
did not represent a good faith attempt to value the Shares.

     15. Holding Period. As a condition to the granting of this Option, unless the
Committee otherwise consents in writing, the Optionee shall not sell or otherwise dispose of any
Shares acquired pursuant to the exercise of this Option for a period of six (6) months following
the Date of Grant.

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