Document:

Form of stock option agreement in Longs Drug Stores Corporation

 Exhibit 10.2 
  
 LONGS DRUG STORES CORPORATION 
  

1995 LONG TERM INCENTIVE PLAN STOCK OPTION AGREEMENT 
  
 THIS AGREEMENT, made as of the [    ] day of
[                    ] 200     (the “Grant Date”), by and between LONGS DRUG STORES CORPORATION, having
its principal office at 141 North Civic Drive, Walnut Creek, California 94596 (the “Company”) and [                    ], (the
“Optionee”) an employee of Longs Drug Stores California, Inc. (the “Subsidiary”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Committee”) is of the opinion that the interests of
the Company will be advanced by granting an incentive to employees of the Subsidiary and the Board is also of the opinion that the interests of the Company will be advanced by granting an incentive to members of the Board by making it possible for
each of them to purchase shares of the Company’s common stock on terms which will give them a direct and continuing interest in the future success of the Company’s business; and 
  
 WHEREAS, the Company previously adopted the Longs Drug Stores Corporation 1995 Long-Term Incentive Plan (the
“Plan”); 
  
 NOW, THEREFORE, in consideration of
the foregoing and other good and valuable consideration, the parties agree as follows: 
  
 1. Grant of Options. Subject and pursuant to all terms and conditions of the Plan, the Company agrees to and does hereby grant to Optionee the right and option (the “Options”) to purchase up to
[                    ] shares of common stock of the Company. The purchase price for exercise of the Options shall be
$[        .        ] per share. The Options granted under this Agreement are intended to be nonqualified stock options. 
  
 2. Exercise of Option. The Options will become exercisable in
installments as set forth in the table below: 
  

			
	 Completed
 Years of Vesting

from the Grant Date

	 	 Percentage of Total
 Shares Exercisable

	 Less than 1
	 	- 0 -
	 1, but less than 2
	 	25%
	 2, but less than 3
	 	50%
	 3, but less than 4
	 	75%
	 4 or more
	 	100%

 For purposes of this Section 2, 
  

“Completed Year of Vesting” shall mean 365 days of active Service as may be further modified by Section 9 of this Agreement. 
  
 In the event there is a Termination of Optionee as a result of death, disability, resignation
or otherwise, Optionee’s vested interest in the Option shall be determined as of the date his/her Termination. Notwithstanding the foregoing, in the event of (i) the Termination of Optionee at or after and on account of Normal Retirement, (ii)
the Termination of Optionee other than for Cause by the Company or any Subsidiary (and other than by reason of death) within two years after the date of a Change in Corporate Control, or (iii) Optionee’s voluntary Termination during the period
commencing on the date of a Change in Corporate Control and ending on the date One Hundred and Eighty (180) days after the date of a Change in Corporate Control, provided such Termination was preceded by a material and detrimental alteration of
Optionee’s position, responsibilities, compensation or benefits from those in effect immediately prior to the Change in Corporate Control, or (iv) Optionee’s voluntary Termination during the period commencing on the date One Hundred and
Eighty (180) days after the date of a Change in Corporate Control and ending on the date two years after the date of a Change in Corporate Control, then the Options immediately shall become fully vested and exercisable as of the date of his/her
Termination. 
  
 3. Term. The Options may not be exercised
beyond the day immediately preceding the tenth (10th) anniversary of the Grant Date (the “Expiration Date”) and may be exercised during such term only in accordance with the terms and provisions of the Plan and this Agreement. In the event
of Optionee’s Termination, Optionee shall have the right to exercise the Option for the following periods after such Termination, but only to the extent that the Option was exercisable at the date of such Termination and it is exercised prior
to the Expiration Date. 
  
 (a) In the event of Termination at or
after and on account of Normal Retirement, the vested Options shall be exercisable for a period of three years after the date of his/her Termination. 
  
 (b) In the event of Optionee’s voluntary Termination or Termination by the Company or the Subsidiary without Cause, the vested Options shall be
exercisable for a period of ninety days after the date of his/her Termination. 
  
 (c) In the event of Optionee’s Termination by the Company or the Subsidiary with Cause, the vested Options shall cease to be exercisable on the date of his/her Termination. 
  
 (d) In the event of Optionee’s death while the Options are exercisable,
the vested Options shall be exercisable for a period of one year after the date of his/her death. 
  
 (e) Notwithstanding the foregoing, in the event of (i) Optionee’s Termination other than for Cause by the Company or any Subsidiary (and other than
by reason of death) within two years after the date of a Change in Corporate Control, or (ii) voluntary Termination by Optionee within two years after the date of a Change in Corporate Control, provided such Termination was preceded by a material
and detrimental alteration of Optionee’s position, responsibilities, compensation or benefits from those in effect immediately prior to the Change in Corporate Control, then the vested Options shall be exercisable for a period of one year after
the date of Termination. 
  

 -2- 

 4. Payment of Purchase Price Upon Exercise. The Options granted under this Agreement may be
exercised in whole or in part by Optionee delivering or mailing to the Company at its principal office, or such other place as the Company may designate, written notice of exercise in the form prescribed by the Committee, and duly signed by
Optionee. Options may be exercised only for whole shares. Such exercise shall be effective upon (a) receipt of such written notice by the Company and (b) payment to the Company of the full purchase price in cash, in shares of Common Stock or, at the
discretion of the Committee, any other form permitted under the Plan (including, to the extent permitted by the Committee, by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board). In the event Optionee desires to pay the exercise price with shares of Common Stock, Optionee shall deliver already-owned shares of Common Stock that either have been held for the period required to avoid a charge to the
Company’s reported earnings (generally six months) or were not acquired, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at fair market value
on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Committee at the time the option is exercised, shall include delivery to the Company of Optionee’s attestation of ownership of such shares of Common
Stock in a form approved by the Committee. Notwithstanding the foregoing, the Options may not be exercised by tender to the Company of Common Stock to the extent such tender would constitute a violation of the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock. 
  
 5. Issuance and Delivery. Optionee’s written notice to the Company shall state the number of shares of Common Stock with respect to which the Options are being exercised and specify a date, consistent with the option exercise
rules established by the Committee, on which the shares of Common Stock will be taken and payment made therefor. On the date specified in the notice of exercise, the Company shall deliver, or cause to be delivered to Optionee (or his/her personal
representative, as the case may be) stock certificates for the number of shares of Common Stock with respect to which the Options are being exercised, against receipt of payment therefor in full and delivery of, if required by the Committee, (i) a
written certificate of Optionee (or his personal representative, as the case may be) to the effect that he/she is purchasing such shares for investment and not with a view to the sale or distribution of any such shares. Certificates evidencing
shares of Common Stock issued upon exercise of the Options may contain such legends reflecting any restrictions upon transfer of the shares evidenced thereby as in the opinion of counsel to the Company may be necessary for the lawful and proper
issuance of such certificates. Delivery of the shares of Common Stock may be made at the office of the Company or at the office of a transfer agent appointed for the transfer of shares of Common Stock. The Option may not be exercised if the issuance
of shares of Common Stock upon such exercise would constitute a violation of any applicable Federal or State securities or other law or regulation. 
  
 6. Withholding Obligations. (a) At the time the Options are exercised, in whole or in part, or at any time thereafter as requested by the Company,
Optionee hereby authorizes withholding from payroll and any other amounts payable to him/her, and otherwise 
  

 -3- 

 agree to make adequate provision for (including, to the extent permitted by the Committee, by means of a “same day
sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or the Subsidiary which arise
in connection with exercise of the Options. 
  
 (b) Upon request
of Optionee and subject to approval by the Committee in its sole discretion, and in compliance with any applicable conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to Optionee
upon the exercise of the Options a number of shares having a fair market value, determined by the Committee as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law. If the date of determination of any
tax withholding obligation is deferred to a date later than the date of exercise of the Options, share withholding pursuant to the preceding sentence shall not be permitted. Shares shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of the Options that are otherwise issuable to Optionee upon such exercise. Any adverse consequences to Optionee arising in connection with such share withholding procedure shall be Optionee’s sole
responsibility. 
  
 (c) The Options are not exercisable unless the
tax withholding obligations of the Company and/or the Subsidiary are satisfied. Accordingly, Optionee may not be able to exercise the Options when desired even though the Options are vested, and the Company shall have no obligation to issue a
certificate of such shares. 
  
 7. Transferability. The
Options shall not be transferable otherwise than by will or by the laws of descent and distribution. The Options shall not be subject, in whole or in part, to attachment, execution or levy of any kind. 
  
 8. Exercisability. During the lifetime of the Optionee, the Options
(to the extent Optionee’s rights are vested) shall be exercisable only by him/her and only while employed by the Company or as provided in Section 3. 
  
 9. Leave of Absence. For purposes of this Agreement, whether an authorized leave of absence or absence for military or governmental service shall
constitute a Termination shall be determined by the Committee. For purposes of determining Optionee’s Completed Years of Vesting from the Grant Date for calculating the percentage of Options exercisable in accordance with Section 2 above, no
Service will be credited toward a Completed Year of Vesting while you are on an unpaid leave of absence unless (a) the Company is required by law to give credit for such period of time or (b) the crediting of Service under the Plan during such leave
of absence is approved by the written consent of the President or Senior Vice President, Human Resources of the Company. 
  
 For purposes of this Section 9, 
  
 “Completed Year of Vesting” shall mean 365 days of active Service. 
  

 -4- 

 10. Rights as a Shareholder. Neither Optionee nor his/her beneficiary or legal representative
shall be, or have any of the rights or privileges of, a shareholder of the Company in respect of any of the shares of Common Stock issuable upon the exercise of the Options, unless and until certificates representing such shares shall have been
issued and delivered to the Optionee (or his/her legal representative). 
  
 11. Recapitalization. In the event of any change in the outstanding Common Stock by reason of stock dividends, special dividends, recapitalizations, reorganizations, mergers, consolidation, split-up, combinations or exchanges of
shares and the like, the number and kind of shares under this Agreement and the purchase price per share hereof shall be appropriately adjusted consistent with such change. The determination of the Committee as to any adjustment shall be final,
binding and conclusive. 
  
 12. Continued Service. Neither
this Agreement nor the Options granted hereunder shall (a) confer upon Optionee any right to continue in the employ of the Company or the Subsidiary or to serve on the board of directors of the Company or the Subsidiary, or (b) limit in any respect
the right of the Company or the Subsidiary to terminate the Service of Optionee at any time. 
  
 13. Optionee Bound by Plan. Optionee hereby acknowledges receipt of a copy of the Plan and the Plan prospectus and agrees to be bound by all the terms and provisions in the Plan, including the terms and
provisions adopted after the granting of these Options but prior to the complete exercise hereof. If there is a conflict between the terms of this Agreement and the terms of the Plan, the Plan shall control. The Committee’s interpretation of
the Plan or this Agreement and all decisions and determinations by the Committee with respect to the Plan or this Agreement shall be final, binding and conclusive on all parties. 
  
 14. Notices. Any notice hereunder to the Company shall be addressed to it at its offices, 141 North Civic Drive,
Walnut Creek, CA 94596, Attn: Corporate Secretary and any notice hereunder to Optionee shall be addressed to him/her at the address indicated in the Subsidiary’s personnel records, subject to the right of either party at any time hereafter to
designate in writing some other address. 
  
 15.
Miscellaneous. This Agreement and the Plan contain the entire understanding and agreement between the parties relating to the Options, except as otherwise referred to herein, and supersedes any prior agreement between the parties, whether
written or oral, regarding the Options. Neither this Agreement nor any provision hereof may be waived, modified, amended, changed, discharged or terminated, except by an agreement in writing signed by the party against whom enforcement of any
waiver, modification, change, amendment, discharge or termination is sought. Without the written agreement of the Optionee, this Agreement may not be modified or amended to the Optionee’s detriment. To the extent that any one or more of the
provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any manner be affected or impaired thereby. Terms not defined
herein shall have the meaning specified in the Plan. This Agreement shall be governed by the laws of the State of California, without reference to the choice of law rules thereof. 
  
 *        *        *        * 
  

 -5- 

 IN WITNESS WHEREOF, the parties agree to the terms and conditions stated herein by signing and
returning to the Company the attached copy hereof. 
  

			
	LONGS DRUG STORES CORPORATION
		
	 By:
	 	  

		
	 By:
	 	  

	
	OPTIONEE
		
	 By:
	 	  

  

 -6-Form of restricted stock award agreement

 Exhibit 10.3 
  
 LONGS DRUG STORES CORPORATION 
 1995 LONG-TERM INCENTIVE PLAN 
 RESTRICTED STOCK AWARD AGREEMENT 
  
 Longs Drug Stores Corporation (the “Company”) desiring to provide
you, <<Name>>, with a proprietary interest in the success of the Company and its subsidiaries, and an incentive to continue to perform services with the Company or a Subsidiary thereof, hereby grants, as of <<Date>>, and you
hereby accept, subject to all the terms and conditions of this Agreement, <<Shares>> restricted shares of the Common Shares of the Company (the “Award”). This Award is subject to the Longs Drug Stores Corporation 1995 Long-Term
Incentive Plan, which is incorporated herein by this reference, and the following terms and conditions: 
  
 A. Retention and Delivery of Share Certificates 
  
 1. The shares subject to this Award shall be retained by the Company, or a party selected by the Company, while they remain subject to any restrictions.
These shares will become available to you in installments over a four (4) year period from the date of this Award (the “Restriction Period”) provided you continue to render Service during the Restriction Period and subject to satisfaction
of the Performance Goals (if any) established by the Committee for this Award. For this Award, the time-based restrictions will lapse in installments, and the shares will become available to you, as follows: 
  

			
	 Completed Years of Vesting
 From Date of
Award

	 	 Percentage of Total
 Shares for which Restrictions Lapse

	 Less than 1
	 	0%
	 1, but less than 2
	 	25%
	 2, but less than 3
	 	50%
	 3, but less than 4
	 	75%
	 4 or more
	 	100%

  
 For purposes of this
Paragraph A.1, a “Completed Year of Vesting” shall mean 365 days of active Service as may be modified by Paragraph D.3. 
  
 2. You shall not be entitled to the delivery of any certificate representing shares subject to this Award unless and until all restrictions with respect
to the shares have lapsed and any other applicable terms and conditions of the Award (with respect to such shares) have been satisfied. The release of any vested restricted stock to you shall be effected within ninety (90) days following the
applicable date(s) of vesting of shares pursuant to this Agreement. 
  
 3. Generally, you will realize taxable income each time restrictions lapse on shares. You must make arrangements to satisfy such tax obligations acceptable to the Company or the shares will be forfeited. 

 4. You have the right to make an election to be taxed on the Award in the year the Award is made (under
Section 83(b) of the Code). If you choose to make this election, you must provide the Company with a copy of the election filed with the Internal Revenue Service within thirty (30) days from the date of grant of this Award. You must make
arrangements to satisfy applicable tax obligations acceptable to the Company or the shares will be forfeited. 
  
 B. Dividends 
  
 1. You shall not be entitled to the payment of dividends on the shares subject to this Award until all restrictions have lapsed with respect to such
shares and any other applicable terms and conditions of the Award (with respect to such shares) have been satisfied. No dividends shall be paid on any shares which have been forfeited. 
  
 2. During the Restriction Period, prior to the lapse of restrictions on shares, dividends on the shares subject to this
Award, including cash dividends on stock dividends, will be paid into an interest bearing account. On the lapse of restrictions on each installment during the Restriction Period, all accumulated dividends together with interest thereon, which are
attributable to the shares for which the restrictions have lapsed shall be paid to you. Payment of any accumulated dividends and interest on the shares subject to this Award is conditioned upon your timely payment of all state, local, federal, or
other taxes which the Company shall deem necessary or appropriate to withhold. 
  
 3. In the event a stock dividend is declared upon the shares subject to this Award, or in the event of a stock split, the number of shares then subject to this Award shall be adjusted proportionately. The shares
provided by such stock dividend or stock split shall be subject to the Restriction Period as if they were part of the original Award. 
  
 C. Shareholder Rights 
  
 Except as provided herein, you shall have all rights of shareholders of the class of shares subject to this Award during the Restriction Period.

  
 D. Proration and Forfeiture of Shares 
  
 1. If your Termination occurs during the Restriction Period by reason of
Normal Retirement, death or “disability” (as defined in the Plan), then the restrictions will lapse on a portion of additional shares subject to the Award, including all accumulated dividends and interest thereon, as follows. In such
event, the restrictions will lapse on a number shares equal to the difference between (a) the number of shares subject to the Award times a fraction where the numerator of the fraction is the total number of days from the date of this Award until
the date of such termination, and the denominator of the fraction is the total number of days from the date of this Award until the last day of the Restriction Period, and (b) the number of shares (if any) with respect to which the restrictions have
lapsed pursuant to Paragraph A.1. Notwithstanding the previous sentence, in no event shall restrictions on more than the total number of shares subject to the Award lapse. 

 The portion of the Award vesting pursuant to this section will be distributed to you or, in the case of death, to your
beneficiary as soon as practicable after the Termination and the satisfaction of any applicable tax withholding. The portion of the Award, and any accumulated dividends and interest thereon, which did not vest shall be forfeited upon Termination.

  
 2. If your Termination occurs during the Restriction Period
by voluntary resignation (other than Normal Retirement) or discharge by the Company or any Subsidiary (other than for “disability”), the portion of the Award still subject to restrictions, together with all accumulated dividends and
interest thereon, shall be forfeited. 
  
 3. A leave of absence
approved in writing by the Company or a Subsidiary during the Restriction Period shall not constitute a Termination, provided you return to Service at the end of the leave of absence. Nevertheless, for purposes of determining your Completed Years of
Vesting From Date of Award for calculating the percentage of total shares for which the restrictions lapse in accordance with Paragraph A.1 above, no service will be credited toward a Completed Year of Vesting while you are on an unpaid leave of
absence unless (a) the Company is required by law to give credit for such period of time or (b) the crediting of service under the Plan during such leave of absence is approved by the written consent of the President or Senior Vice President, Human
Resources of the Company. For purposes of this Paragraph D.3, a “Completed Year of Vesting” shall mean 365 days of active Service. 
  
 E. Miscellaneous 
  
 1. Nothing in this Award or Agreement shall confer any right to or guarantee of continued Service with the Company or any Subsidiary, or in any way limit
the right of the Company or any Subsidiary thereof to terminate your Service any time, with or without Cause. 
  
 2. You may not sell, assign, transfer, pledge, exchange, hypothecate, or otherwise dispose of any or all of the shares subject to this Award or the
associated dividends or interest thereon until such shares have been released to you. Any such transfer or disposal shall result in the forfeiture of the Award together with accumulated dividends and interest thereon. 
  
 3. You shall file with the Company a beneficiary designation with respect to
any distributions to be made in the event of your death. In the event no such designation is on file, or if said beneficiary or beneficiaries do not survive you, or if the Committee is in doubt as to the appropriate beneficiary, the Committee may
deliver the shares (together with any accumulated dividends and interest thereon) to the legal representative of your estate and, thereby, be relieved of all liability with respect to distributions payable on account of your death. 
  
 4. This Agreement shall be governed in accordance with the laws of the State
of California, without regard to the choice of law rules thereof. 
  
 5. The headings of this Agreement are for convenience only and are to be ignored if inconsistent with the text. 

 6. This Agreement shall be binding on any successor of the Company. 
  
 7. The Company and Committee shall retain all rights and authority under the
1995 Long-Term Incentive Plan with respect to this Award and all definitions and terms used in this Agreement are qualified in their entirety by reference to said Plan. The Committee’s interpretation of the Plan or this Award and all decisions
and determinations by the Committee with respect to the Plan or this Award shall be final, binding and conclusive on all parties. 
  
 8. Any notice hereunder to the Company shall be addressed to it at its offices, 141 North Civic Drive, Walnut Creek, CA 94596, Attn: Corporate Secretary
and any notice hereunder to you shall be addressed to you at the address indicated in the Company or Subsidiary’s personnel records, subject to the right of either party at any time hereafter to designate in writing some other address.

  
 9. This Agreement and the Plan contain the entire
understanding and agreement between the parties relating to the Award, except as otherwise referred to herein, and supersedes any prior agreement between the parties, whether written or oral, regarding the Award. Neither this Agreement nor any
provision hereof may be waived, discharged or terminated, except by an agreement in writing signed by the party against whom enforcement of any such waiver, discharge or termination is sought. Without your written agreement, this Agreement may not
be modified, changed or amended to your detriment. To the extent that any one or more of the provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any manner be affected or impaired thereby. Terms not defined herein shall have the meaning specified in the Plan. 
  

			
	LONGS DRUG STORES CORPORATION
		
	 By:
	 	  

	 	 	President and CEO
		
	 By:
	 	  

	 	 	Secretary
	
	HOLDER
		
	 By:

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