2005 NON-QUALIFIED STOCK
OPTION AGREEMENT
Ralcorp
Holdings, Inc. (the "Company"), effective February 2, 2005, grants
this Non-Qualified Stock Option to __________ ("Optionee") to
purchase a total of ____ shares of its $.01 par value Common Stock
(the "Common Stock") at a price of $45.25 per share pursuant to the
Ralcorp Holdings, Inc. 2002 Incentive Stock Plan (the "Plan").
Subject to the provisions of the Plan and the following terms,
Optionee may exercise this option from time to time by tendering to
the Company (or its designated agent), written notice of exercise
together with the purchase price in either cash, or in shares of
Common Stock of the Company at their fair market value as
determined by the Corporate Governance and Compensation Committee
of the Company's Board of Directors (the "Committee"), or in both
cash and such shares.
NOW
THEREFORE , the
Company and Optionee agree, for and in consideration of the terms
hereof, as follows:
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Normal
Exercise - This Option
becomes exercisable at the rate of 33 1/3% of the total shares on
each of February 2, 2008, 2009 and 2010. This Option remains
exercisable through February 2, 2012, unless Optionee is no longer
employed by the Company, in which case the Option is exercisable
only if permitted by, and in accordance with, the provisions of
paragraph 2 below.
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Accelerated
Exercise -
Notwithstanding the above, this Option shall become exercisable
before the normal exercise dates set forth in paragraph 1
above upon the occurrence of any of the events set forth below
while Optionee is employed by the Company (hereinafter referred to
as an "Accelerating Event"). This Option shall become exercisable
in full on the date of such Accelerating Event (except in the case
of "a." below), as set forth below, and shall remain exercisable
for the periods also set forth below or until February 2, 2012,
whichever occurs first. Thereafter, the unexercised portion of this
Option is forfeited and may not be exercised. An Accelerating Event
may be any of the following:
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Stock Price; at
any time after February 2, 2005, the closing price of the Common
Stock on the New York Stock Exchange (the "NYSE") is at least
$55.00 per share for five (5) consecutive trading days, the Option
shall accelerate as described in the following sentences. Upon the
occurrence of this Accelerating Event, the Option shall become
immediately exercisable on February 2, 2008 (if the Accelerating
Event occurred earlier) or immediately after the occurrence of the
Accelerating Event (if the Accelerating Event occurs after February
2, 2008) and shall remain exercisable through February 2, 2012. In
the event the Common Stock no longer trades on the NYSE, the
Committee shall have the discretion to designate another trading
market or other valuation method for purposes of determining
whether this Acceleration Event has occurred.
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Death of
Optionee; exercisable for three years.
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Declaration of
Optionee's total and permanent disability; exercisable for three
years.
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Voluntary
termination of Optionee's employment at or after attainment of age
62; exercisable for three years.
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Involuntary
termination of employment of Optionee, other than a Termination for
Cause; exercisable for six months.
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Occurrence of a
Change in Control; exercisable for six months after the Optionee's
voluntary or involuntary termination of employment following the
Change in Control.
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Forfeiture - This paragraph sets forth the circumstances
under which this Option will be forfeited. All shares not
exercisable shall be forfeited upon the occurrence of any of the
following events (any of which is referred to as a "Forfeiture
Event"):
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a. Optionee is Terminated for
Cause;
b. Optionee voluntarily terminates
prior to age 62;
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