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EXHIBIT 10.1
CPI CORP. NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT (the
“Agreement”) is made effective as of _____________,
2008 (the “Grant Date”), between CPI Corp., a Delaware
corporation (the “Company”), and ____________ (the
“Employee”), pursuant to the CPI Corp. Omnibus
Incentive Plan (the “Plan”). Capitalized
terms not otherwise defined herein shall have the meaning assigned
to such terms in the Plan. In consideration of the premises,
mutual covenants and agreements herein, the Company and the
Employee agree as follows: 1. Grant of
Option. The Company hereby grants to Employee an option
(the “Option”) to purchase all or any part of an
aggregate of __________ Shares on the terms and conditions set
forth herein. The Option shall not constitute an
“incentive stock option” within the meaning of Section
422 of the Code. 2. Option Price. The
purchase (exercise) price for each Share issuable upon exercise of
the Option shall be $ __________, being 100% of the Fair Market
Value per Share on the Grant Date. 3. Vesting.
(a) Subject
to Section 5 hereof, the Option shall vest and become exercisable
upon the occurrence of the conditions set forth below:
(i) This
Option shall become vested with respect to one-third (1/3) of the
total number of Shares described in Section 1 hereof on the first
anniversary of the Grant Date and thereafter shall become
exercisable upon the achievement of the First Target Stock Price
(for the avoidance of doubt, if the First Target Stock Price is
achieved after the Grant Date but before the first anniversary of
the Grant Date, such one-third of the Option shall become
immediately exercisable upon the first anniversary of the Grant
Date);
(ii) This
Option shall become vested with respect to an additional one-third
(1/3) of the total number of Shares described in Section 1 hereof
on the second anniversary of the Grant Date and thereafter shall
become exercisable upon the achievement of the Second Target Stock
Price (for the avoidance of doubt, if the Second Target Stock Price
is achieved after the Grant Date but before the second anniversary
of the Grant Date, such additional one-third of the Option shall
become immediately exercisable upon the second anniversary of the
Grant Date); and
(iii) This
Option shall become vested with respect to the final one-third
(1/3) of the total number of Shares described in Section 1 hereof
on the third anniversary of the Grant Date and thereafter shall
become exercisable upon the achievement of the Third Target Stock
Price (for the avoidance of doubt, if the Third Target Stock Price
is achieved after the Grant Date but before the third
anniversary of the Grant Date, such final one-third of the
Option shall become immediately exercisable upon the third
anniversary of the Grant Date).
(b) Notwithstanding the vesting
schedule set forth in Section 3(a), this Option shall become
immediately vested and exercisable as to any Shares that have not
otherwise vested as of a Change of Control
of the Company
(as defined below).
(c) For purposes of this Option, the
following terms shall have the following meanings:
“Cause”
shall mean (i) conduct or activity of the Employee materially
detrimental to the Company’s or any Subsidiary’s
reputation or business (including financial) operations;
(ii) gross or habitual neglect
or breach of duty or misconduct of the Employee in discharging the
duties of his or her position; (iii) repeated unfitness or
unavailability for service, disregard of the
Company’s rules or policies
after reasonable notice and opportunity to cure, or engaging
in conduct not becoming of a senior manager of the Company; or (iv)
prolonged absence by the Employee from his or her duties
(other
than on account of illness or disability) without the consent
of the Company.
“Change
of Control” shall mean a change in control of a nature that
would be required to be reported in response to Item 5.01 of the
Current Report on Form 8-K, as in effect on the date hereof,
pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (“Exchange Act”) or would have been required to
be so reported but for the fact that such event had been
“previously
reported”
as that term is defined in Rule 12b-2 of Regulation 12B of the
Exchange Act unless the transactions that give rise to the Change
in Control are approved or ratified by a majority of the members of
the
Incumbent Board who are not participants in the Plan; provided
that, without limitation, notwithstanding anything herein to the
contrary, a Change in Control shall be deemed to have occurred if
(i) any
Person
is or becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company representing more than 40% of the combined voting power of
the
Company’s then outstanding securities ordinarily (apart from
rights accruing under special circumstances) having the right to
vote at elections of directors (“Voting Securities”),
(ii) individuals who
constitute
the Incumbent Board cease for any reason to constitute at least a
majority thereof, or (iii) the stockholders of the Company approve
a reorganization, merger or consolidation with respect to which
persons
who were the stockholders of the Company immediately prior to such
reorganization
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