Document:

exv10w2

 

Exhibit 10.2

NONQUALIFIED STOCK OPTION AGREEMENT

UNDER

BAKERS FOOTWEAR GROUP, INC.

2003 STOCK OPTION PLAN

          THIS AGREEMENT (“Agreement”), made this       day of                     , 2          , by and between BAKERS
FOOTWEAR GROUP, INC., a Missouri corporation (hereinafter called the “Company”), and
                                         (hereinafter called “Optionee”);

          WITNESSETH THAT:

          WHEREAS, the Board of Directors of the Company (“Board of Directors”) has adopted the Bakers
Footwear Group, Inc. 2003 Stock Option Plan (the “Plan”) pursuant to which options covering an
aggregate of Six Hundred Thousand (600,000) shares of the Common Stock of the Company may be
granted, not including shares described in paragraph 20 of the Plan; and

          WHEREAS, the Company desires to grant to Optionee the option to purchase certain shares of its
stock under the terms of the Plan, which option is not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(hereinafter referred to as an “Incentive Stock Option”); and

          WHEREAS, Optionee agrees and acknowledges that the grant of said option is valuable
consideration;

          NOW, THEREFORE, in consideration of the premises, and of the mutual agreements hereinafter set
forth, it is covenanted and agreed as follows:

          1. Grant Subject to Plan. This option is granted under and is expressly subject to,
all the terms and provisions of the Plan, which terms are incorporated herein by reference. The
Compensation Committee (“Committee”) of the Board of Directors has been appointed by the Board of
Directors, and designated by it, as the Committee to make grants of options. The Compensation
Committee may, in its discretion, authorize and delegate to the Chief Executive Officer (“CEO”) of
the Company the authority to grant certain options in accordance with and subject to the conditions
set forth in the Plan; provided, however, that the CEO shall not grant such options to employees of
the Company who are subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended.

          2. Grant and Terms of Option. Pursuant to action of the Committee or the CEO under
delegated authority, the Company hereby grants to Optionee the option to purchase all or any part
of                      (          ) shares of the Common Stock of the Company, par value of $0.0001 per share
(“Common Stock”) for a period of ten (10) years from the date hereof, at the purchase price of
$[option price must not be less than 100% of fair market value or par value] per share; provided,
however, that the right to exercise such option shall be, and is hereby, restricted so that no
shares may be purchased during the first year of the term hereof; that at

 

 

any time during the term
of this option after the end of the first year of the term hereof Optionee may purchase up to
[one-third] [20%] of the total number of shares to which this option relates; that at any time
during the term of this option after the end of the second year of the term hereof
Optionee may purchase up to an additional [one-third] [20%] of the total number of shares to
which this option relates; [that at any time during the term of this option after the end of the
third year of the term hereof Optionee may purchase up to an additional 20% of the total number of
shares to which this option relates; that at any time during the term of this option after the end
of the fourth year of the term hereof Optionee may purchase up to an additional 20% of the total
number of shares to which this option relates;] and that at any time during the term of this option
after the end of the [third] [fifth] year of the term hereof Optionee may purchase up to an
additional [one-third] [20%] of the total number of shares to which this option relates; so that
upon expiration of the [third] [fifth] year of the term of this option, and thereafter during the
term hereof, Optionee will have become eligible to purchase the entire number of shares to which
this option relates. The foregoing right to exercise is subject to the provisions of Sections 6
and 7 hereof. Notwithstanding the foregoing, in the event of a Change of Control (as defined in
the Plan) Optionee may purchase 100% of the total number of shares to which this option relates.
In no event may this option or any part thereof be exercised after the expiration of ten (10) years
from the date hereof. The purchase price of the shares subject to the option must be in cash. The
Optionee is required to pay any applicable amounts to the Company in cash for federal and state
taxes or otherwise in satisfaction of withholding obligations in accordance with Paragraph 7 of the
Plan.

          3. Anti-Dilution Provisions. In the event that, during the term of this Agreement,
there is any change in the number of shares of outstanding Common Stock by reason of stock
dividends, recapitalizations, mergers, consolidations, split-offs, split-ups, combinations or
exchanges of shares and the like, the number of shares covered by this option agreement and the
price thereof shall be appropriately adjusted, as determined by the Committee in its discretion,
which determination shall be conclusive.

          4. Investment Purpose. If the shares subject to the Plan are not registered under the
Securities Act of 1933, Optionee acknowledges that a restrictive legend, in substantially the
following form, will be printed on the certificates representing the shares acquired by Optionee on
exercise of all or any part of this option:

“The shares represented by this certificate have not been registered
under the Securities Act of 1933, but have been issued or
transferred to the registered owner pursuant to the exemption
afforded by Section 4(2) of said Act. No transfer or assignment of
these shares by the registered owner shall be valid or effective,
and the issuer of these shares shall not be required to give any
effect to any transfer or attempted transfer of these shares,
including without limitation, a transfer by operation of law, unless
(a) the issuer shall have received an opinion of its counsel that
the shares may be transferred without requirement of registration
under said Act, or (b) there shall have been delivered to the issuer
a ‘no-action’ letter from the staff of the Securities and Exchange
Commission, or (c) the shares are registered under said Act.”

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          5. Non-Transferability. Neither the option hereby granted nor any rights thereunder
or under this Agreement may be assigned, transferred or in any manner encumbered
except by will or the laws of descent and distribution, and any attempted assignment,
transfer, mortgage, pledge or encumbrance except as herein authorized, shall be void and of no
effect. The option may be exercised during Optionee’s lifetime only by Optionee. Notwithstanding
the foregoing, the Committee may, in its sole discretion permit Optionee to transfer this option to
any one or more of the following: a descendant of Optionee, Optionee’s spouse, a descendant of
Optionee’s spouse, a spouse of any of the foregoing, a trust established primarily for the benefit
of any of the foregoing or of Optionee, or an entity which is a corporation, partnership, or
limited liability company (or any such similar entity) the owners of which are primarily the
aforementioned persons or trusts. In the event of any such transfer, the option shall still be
subject to the provisions of Paragraph 6 hereof and Paragraph 10 of the Plan concerning the
exercisability during Optionee’s employment.

          6. Termination of Employment. Any option issued pursuant to this Agreement and
according to the terms of the Plan must be exercised prior to the Optionee’s termination of
employment (or the Optionee’s capacity as a director or consultant) with the Company, a subsidiary
or any affiliate, except that if the employment (or engagement as a director or consultant) of an
Optionee terminates with the consent and approval of the Optionee’s employer (or, in the case of a
director or consultant, the Company), the Committee in its absolute discretion may permit the
Optionee to exercise the option, to the extent that the Optionee was entitled to exercise it at the
date of such termination of employment (or capacity as a director or consultant), at any time
within three (3) months after such termination, but not after ten (10) years from the date of the
granting thereof. In addition, in the event the Company, a subsidiary or an affiliate divests
itself of all its interest in a subsidiary or an affiliate, all outstanding options held by an
Optionee employed by (or engaged as a director or consultant by) such divested subsidiary or
affiliate may be exercised by such Optionee at any time within three (3) months after such
divestiture, but not after ten (10) years from the date on which such options were granted.
Furthermore, all outstanding options held by an Optionee who terminates employment (or capacity as
a director or consultant) on account of retirement (as determined by the Committee) shall be fully
exercisable at any time within one (1) year after such retirement, but not after ten (10) years
from the date on which such options were granted. If the Optionee terminates employment (or
capacity as a director or consultant) on account of disability, as defined in Section 10 of the
Plan, the Optionee may exercise such option, to the extent the Optionee was entitled to exercise it
at the date of such termination, at any time within one (1) year of the termination of employment
(or the termination of the Optionee’s capacity as a director or consultant) but not after ten (10)
years from the date of the granting thereof. The effect of approved leaves of absence shall be
determined by the Committee in its sole and absolute discretion.

          7. Death of Optionee. In the event of the death of an Optionee while he or she is
employed (or engaged as a director or consultant) by the Company (or a subsidiary or affiliate of
the Company), the options held by the Optionee at death shall become fully vested immediately and
may be exercised by a legatee or legatees under the Optionee’s last will, or by personal
representatives or distributees, at any time within a period of one (1) year after death, but not
after ten (10) years from the date of granting thereof. In the event of the death of an Optionee
within three months after termination of employment (or the Optionee’s capacity as a

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director or
consultant) (or one (1) year in the case of the termination of an Optionee who is disabled as
above provided or one (1) year in the case of termination of employment (or
termination of the Optionee’s capacity as a director or consultant) on account of retirement,
as provided in Paragraph 6 above) the option theretofore granted may be exercised, to the extent
exercisable at the date of death, by a legatee or legatees under the Optionee’s last will, or by
personal representatives or distributees, at any time within a period of one (1) year after death,
but not after ten (10) years from the date of granting thereof.

          8. Shares Issued on Exercise of Option. It is the intention of the Company that on
any exercise of this option it will transfer to Optionee shares of its authorized but unissued
stock or transfer Treasury shares, or utilize any combination of Treasury shares and authorized but
unissued shares, to satisfy its obligations to deliver shares on any exercise hereof.

          9. Committee Administration. This option has been granted pursuant to a determination
made by the Committee or the CEO under delegated authority. In accordance with Paragraph 3 of the
Plan, the Committee or any successor or substitute committee authorized by the Board of Directors
or the Board of Directors itself, subject to the express terms of this option, shall have plenary
authority to interpret any provision of this option and to make any determinations necessary or
advisable for the administration of this option and the exercise of the rights herein granted. In
accordance with Paragraph 16 of the Plan, the Committee or any successor or substitute committee
authorized by the Board of Directors or the Board of Directors itself may waive or amend any
provisions hereof in any manner not adversely affecting the rights granted to Optionee by the
express terms hereof.

          10. Option Not An Incentive Stock Option. The option granted hereunder is not
intended to be, and will not be treated as, an Incentive Stock Option.

          11. No Contract of Employment. Nothing contained in this Agreement shall be
considered or construed as creating a contract of employment or a consulting agreement for any
specified period of time. The employment (or consulting or director) relationship shall continue
to be at the will of both parties, either of which may terminate such employment relationship at
any time for any reason.

          12. Severability. Any word, phrase, clause, sentence or other provision hereof which
violates or is prohibited by any applicable law, court decree or public policy shall be modified as
necessary to avoid the violation or prohibition and so as to make this Agreement enforceable as
fully as possible under applicable law, and if such cannot be so modified the same shall be
ineffective to the extent of such violation or prohibition without invalidating or affecting the
remaining provisions hereof.

          13. Governing Law. This agreement is made in and shall be construed and administered
in accordance with the laws of the State of Missouri, without regard to conflicts of law principles
which might otherwise be applied. Any litigation arising out of, in connection with or concerning
any aspect of this agreement shall be conducted exclusively in the State or Federal Courts in the
State of Missouri, and Optionee hereby consents to the jurisdiction of said courts.

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[Remainder of page intentionally left blank. Signatures follow.]

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IN WITNESS WHEREOF, Optionee has signed this Agreement to evidence Optionee’s acceptance of
the option herein granted and of the terms hereof, and the Company has thereafter caused this
Agreement to be executed at its headquarters, on its behalf by an authorized officer, all as of the
date hereof.

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	Optionee
	 
	 	 	 	 
	 	 	BAKERS FOOTWEAR GROUP, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 

6exv10w4

 

Exhibit 10.4

NOTICE OF AWARD

OF PERFORMANCE SHARES

	 	 	 
	To:

	 	[Name]
	 
	 	 
	From:

	 	Compensation Committee of the Board of Directors (“Committee”)

Subject: Bakers Footwear Group, Inc. 2005 Incentive Compensation Plan (“Plan”)- [Award date] Award

1. Award. The Committee has awarded to you [100%] Performance Shares under the terms of
the Plan (the “Target Award” or “Award”). You will have the opportunity to earn up to 200% of the
Target Award as set forth in paragraph 2, below. The Award is subject to all of the terms and
conditions of the Plan, a copy of which has been delivered to you. Defined terms not otherwise
defined herein shall be as defined in the Plan.

2. Terms. The following are the terms of the Award:

     (a) If, at the end of the three fiscal year Period of the Award commencing on [          , 2006]
and ending on [          , 2009], (the “Performance Period”) the [ROAA (defined below)] reaches the
amount set forth in the vertical column and the [CAGR (defined below)] reaches the amount set forth
in the horizontal column you will earn the percentage of the Award indicated in the chart below
provided you comply with the terms of the remainder of this Notice of Award.

[CAGR]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	[5.0%	 	7.5%	 	10.0%	 	13.0%	 	16.0%	 	20.0%	 	25.0%]
	 	 	 	 	 	 
	[R
	 	[4.0	%	 	 	[20	%	 	 	35	%	 	 	50	%	 	 	68	%	 	 	86	%	 	 	106	%	 	 	124	%
	O
	 	4.7	%	 	 	31	%	 	 	46	%	 	 	61	%	 	 	79	%	 	 	97	%	 	 	112	%	 	 	130	%
	A
	 	5.3	%	 	 	41	%	 	 	56	%	 	 	71	%	 	 	89	%	 	 	104	%	 	 	119	%	 	 	137	%
	A]
	 	6.0	%	 	 	52	%	 	 	67	%	 	 	82	%	 	 	100	%	 	 	111	%	 	 	125	%	 	 	143	%
	 
	 	8.0	%	 	 	84	%	 	 	99	%	 	 	108	%	 	 	119	%	 	 	130	%	 	 	144	%	 	 	162	%
	 
	 	10.0	%	 	 	109	%	 	 	118	%	 	 	127	%	 	 	138	%	 	 	149	%	 	 	163	%	 	 	181	%
	 
	 	12.0	%]	 	 	128	%	 	 	137	%	 	 	146	%	 	 	157	%	 	 	168	%	 	 	182	%	 	 	200	%]

     (b) If the ROAA and CAGR fall in between the percentages set forth above, you will receive
payment of the Award as determined by the Committee based upon the next lowest level in the above
chart; provided that the Committee may in its discretion award a proportionate percentage of the
Target Award, determined in the discretion of the Committee, for levels of achievement between the
levels specified above. If [ROAA] is less than [4.0%] or [CAGR] is less than [5.0%], then no
performance award shall be paid. Cash will be paid in lieu of fractional shares. You must be
employed at the end of the Performance Period to be entitled to the payment; provided that the
Committee may exercise its discretion to the extent set forth in

 

 

Section 7(d) of the Plan, as may
be modified by Section 10(e) if you are a “covered employee” for purposes of Section 162(m) of the
Code.

     (c) In accordance with the Plan, following determinations by the Committee as to whether the
performance objectives have been met at the end of the Performance Period, payment hereunder will
be within 2-1/2 months after the end of the calendar year in which the Performance Period ends.

     (d) Definitions.

          (1) [CAGR: “CAGR” shall mean the Company’s compound annual growth rate in net sales,
as determined in accordance with U.S. generally accepted accounting principles (“GAAP”), expressed
as a percentage, as follows:

               CAGR = ((Ending Value/Beginning Value)^(1/3)) -1

For this purpose, the Ending Value shall be net sales for fiscal year 2008 and the Beginning Value
shall be net sales for fiscal year 2005.]

          (2) [ROAA: “ROAA” shall mean the Company’s return on average assets, as determined in
accordance with GAAP for the performance period, expressed as a percentage, calculated as the
average of the ratio of net income for each year in the performance period divided by average total
assets for that year, as follows:

               ROAA for any year = (net income for that year)/(total assets at the beginning of that year +
total assets at end of that year)/2

               ROAA for the performance period = sum of the ROAA for each year in the performance period
divided by 3.]

     (e) The Committee shall have plenary authority to interpret and implement the provisions of
the Plan and to calculate CAGR and ROAA, in its sole and absolute discretion, and to make any
adjustments it feels necessary for unusual events, nonrecurring or extraordinary items including
major corporate events.

3. Medium of Payment. Payment will be made hereunder in shares of Common Stock (which may
include stock with restrictions attached), or, if determined by the Committee at the time of
payment, in cash or a combination thereof. The Committee shall direct that any distribution shall
be made in accordance with the terms of the Plan.

4. Tax Withholding; Par Value. Stock or cash shall be withheld to satisfy the Company’s
tax withholding obligations for any award under the Plan. You must pay or have withheld by the
Company an amount of cash equivalent to any applicable par value with respect to any awards of
Common Stock received by you.

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5. Choice of Law. This Agreement shall be construed and administered in accordance with
the laws of the State of Missouri without regard to the principles of conflicts of law which might
otherwise apply. Any litigation concerning any aspect of this Agreement shall be conducted in the
State or Federal Courts in the State of Missouri.

6. Amendment. The Award may be amended by written consent between the Committee and you.

Executed this       day of                     , 2[006].

	 	 	 	 	 	 	 	 	 	 	 
	BAKERS FOOTWEAR GROUP, INC.	 	 	 	          AGREED TO AND ACCEPTED:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	[Chief Executive Officer]	 	 	 	Participant	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	[(Seal)	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Secretary]
	 	 	 	 	 	 

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