Form of Nonqualified Stock
Option Agreement
THIRD AMENDED AND RESTATED REVLON,
INC. STOCK PLAN
STOCK OPTION
AGREEMENT, dated as of _________ (the “Agreement”),
between Revlon, Inc., a Delaware corporation, or its Affiliate
executing this Agreement (“Revlon” and, together with
its Affiliates, the “Company”), and the individual
whose name appears on the signature page hereof (the
“Optionee”).
Revlon’s
Compensation and Stock Plan Committee (the “Committee”)
has determined that the objectives of the Third Amended and
Restated Revlon, Inc. Stock Plan, as amended (the
“Plan”), will be furthered by granting to the Optionee
an option pursuant to the Plan.
In consideration
of the foregoing and of the mutual undertakings set forth in this
Agreement, the Company and the Optionee agree as
follows:
SECTION 1
. Grant of Option . Subject to Section 11 of this
Agreement, the Company hereby grants to the Optionee a
“nonqualified” stock option to purchase the number of
shares of Common Stock (as defined in the Plan) set forth on
Schedule 1 hereto at a purchase price per share set
forth on Schedule 1 hereto.
SECTION 2
. Exercisability .
(a) For so
long as the option shall not be cancelled or otherwise remains
exercisable pursuant to the terms of the Plan and this Agreement,
the option shall be exercisable as set forth on
Schedule 1 hereto and in accordance with this
Section 2. The option shall not be exercisable prior to
_________, and shall become cumulatively exercisable on the dates
and at the percentages of shares of Common Stock subject thereto,
rounded down to the next lower full share, as set forth on
Schedule 1 hereto, becoming 100% exercisable on
_________, and, except to the extent otherwise provided herein or
in the Plan, shall remain 100% exercisable until the day prior to
the seventh anniversary of the date of grant and shall terminate
and cease to be exercisable on the seventh anniversary of the date
of grant. Notwithstanding the foregoing, the option shall be fully
exercisable upon a “Change of Control,” as defined in
Schedule 2 hereto.
SECTION 3
. Method of Option Exercise; Involuntary Option Cash-Out;
Replacement Option .
(a) The
option or any part thereof may be exercised only by giving to the
Company and to Smith Barney Stock Plan Services, a division of
Citigroup Global Markets Inc. (“SSB”) in its capacity
as external Plan administrator, or such other external Plan
administrator as the Company may designate from time to time,
written notice of exercise by such means as the Company may
determine from time to time. Full payment of the purchase price
shall be made on or before the option exercise date by any
combination of the following: (i) by certified or official
bank check or, in the Committee’s discretion, by personal
check (subject to collection) payable to the Company; (ii) by
the assignment of proceeds from the sale of Common Stock in the
manner provided in the Plan; or (iii) by delivery of shares of
Common Stock already owned by the Optionee for at least six months
prior to the option exercise date, subject to the terms and
conditions set forth in the Plan.
(b) The
Optionee shall have no right to receive shares of Common Stock with
respect to an option exercise prior to the option exercise date.
For purposes of this Agreement, unless the Committee otherwise
determines, the option exercise date shall be the later of:
(i) the sixth business day immediately following the date
written notice of exercise is received by the Company and SSB in
its capacity as external Plan administrator, or such other Plan
administrator as the Company may designate from time to time, if
any; and (ii) the date payment with respect to such option
exercise is received.
(c) At any
time prior to the issuance of shares of Common Stock with respect
to the option exercise, the Committee, in its sole discretion,
shall have the right, by written notice to the Optionee, to cancel
such option or any part thereof if the Committee, in its sole
judgment, determines that legal or contractual restrictions and/or
blockage and/or other market considerations would make the
Company’s acquisition of Common Stock from the public
markets, the Company’s issuance of Common Stock to the
Optionee, the Optionee’s acquisition of Common Stock from the
Company and/or the Optionee’s sale of Common Stock to the
public markets illegal, impracticable or inadvisable. If the
Committee so determines to cancel the option or any part thereof
subject to the written notice of exercise, the Company shall pay to
the Optionee an amount equal to the excess of (i) the
aggregate fair market value of the shares of Common Stock subject
to the option or part thereof canceled (determined as of the option
exercise date), over (ii) the aggregate option exercise price
of the option or part thereof canceled. Such amount shall be
delivered to the Optionee as soon as practicable after such option
or part thereof is canceled.
SECTION 4.
Termination of Employment .
(a) Except to
the extent otherwise provided in accordance with this
Section 4, the portions of this option that are exercisable as
of the date of the Optionee’s termination of employment with
the Company and its affiliates may continue to be exercised for a
period of ninety days from and including the date of termination of
employment, but no additional portions of this option shall become
exercisable following the date of such termination of employment
and such unexercisable portions shall be canceled on the date of
such termination of employment.
(b) If the
Optionee resigns employment otherwise than for “good
reason,” “cause” or any like term as defined
under any employment agreement between the Company and the Optionee
(which terms specify the Optionee’s right to terminate the
term of such employment agreement), or the Company terminates the
Optionee’s employment for “good reason” as
defined in the Revlon Executive Severance Policy as in effect from
time to time, a copy of which is available from the Company’s
Chief Legal Officer (or for “cause” or any like term in
any applicable employment agreement), then this option shall cease
to be exercisable and shall automatically be canceled on the date
of such termination of employment.
(c) If the
Optionee voluntarily retires with Company consent or the
Optionee’s employment is terminated due to permanent
disability (in each case as determined by the Committee), the
portions of this option that are exercisable as of the date of the
Optionee’s voluntary retirement or termination of employment
with the Company may continue to be exercised for a period of one
year from and including such date of voluntary retirement or
termination of employment, but no additional portions of this
option shall become exercisable following such date of such
voluntary retirement or termination of employment and such
unexercisable portions shall be canceled on the date of such
voluntary retirement or termination of employment. Notwithstanding
the foregoing, the Committee may in its sole discretion provide for
a longer or shorter period for exercise of this option or may
permit the Optionee to continue vesting under this option if the
Optionee’s employment terminates solely because the
Optionee’s employer ceases to be an Affiliate of the Company
or because the Optionee transfers employment with the
Company’s consent to a purchaser of a business disposed of by
the Company.
(d) If the
Optionee’s employment terminates by reason of death, or if
the Optionee’s employment terminates under circumstances
providing for continued exercisability under subsection (a) or
(c) and the Optionee dies within the period described in
subsection (a) or (c), the portions of this option that are
exercisable as of the date of the Optionee’s death may
continue to be exercised by the person to whom this option has
passed, under the Optionee’s will (or if applicable, pursuant
to the laws of descent and distribution), for a period of one year
from and including the date of death, but no additional portions of
this option shall become exercisable either following the date of
such death as respects an Optionee whose employment or services
terminates by reason of death, or the date provided in subsection
(a) or (c) as respects an Optionee whose death occurs
during the period of continued exercisability provided in
subsection (a) or (c), and such unexercisable portions shall
be canceled either on the date of such death as respects an
Optionee whose
2
employment or
services terminates by reason of death, or the date provided in
subsection (a) or (c) as respects an Optionee whose death
occurs during the period of continued exercisability provided in
subsection (a) or (c).
(e) Nothing
in the Plan or this Agreement shall confer upon the Optionee or any
other person the right to continue in the employment of the Company
or any of its Affiliates or affect any right which the Company or
any of its Affiliates may have to terminate the employment of the
Optionee or any other person.
(f) If the
Optionee ceases employment with the Company and accepts employment
with a competitor in violation of the Company’s Employee
Agreement as to Confidentiality and Non-Competition, as in effect
from time to time (a copy of which is available upon request from
the Company’s Chief Legal Officer), or any other
non-competition agreement or covenant executed by the Optionee,
then profits realized from exercise of any portion of the option
during the 12-month period prior to the date of termination shall
be repaid by the Optionee to the Company, in cash, within ten
(10) days of such acceptance of employment and the Company is
hereby authorized to deduct such amount from any other amounts
otherwise due the Optionee.
SECTION 5.
Withholding Tax Requirements . The Optionee shall be
responsible for paying to the Company promptly upon request, and in
any event at the time the Optionee recognizes taxable income in
respect of this option (which would include the date when any
portion of the option is exercised hereunder), an amount equal to
the taxes, if any, the Company determines it is required to
withhold under applicable tax laws with respect to this option, in
the manner of payment prescribed by the Company. Notwithstanding
the foregoing, unless and until the Company, in its discretion,
allows or prescribes an alternate method of tax withholding upon
notice to the Optionee prior to any issuance of shares of Common
Stock upon exercise of this option, the Company shall satisfy its
applicable tax withholding obligations associated with this option
by withholding from delivery upon the exercise of this option
shares of Common Stock having a fair market value (determined as of
the date as to which the amount of tax to be withheld is
determined) equal to the amount of taxes which the Company
determines it is required to withhold under applicable tax laws.
The Optionee further agrees and acknowledges that all other taxes,
duties and fees related to the option must be paid directly by the
Optionee to the appropriate authorities, and that the Company may
offset against any future compensation, earnings, bonus, expense
reimbursements or incentive compensation of any kind amounts
necessary to cover any tax withholding obligations of the Company
associated with the option which have not been accounted for in a
manner satisfactory to the Company.
SECTION 6.
Plan Provisions to Prevail . This Agreement shall be subject
to all of the terms and provisions of the Plan, which are
incorporated herein and made a part hereof, including, without
limitation, the provisions of Section 2.9(c) of the Plan
(generally prohibiting the sale of shares not owned or immediately
issuable and failure to duly deliver shares in settlement),
Section 3.2 of the Plan (generally relating to consents
required by securities and other laws), Section 3.5 of the
Plan (relating to changes in capitalization) and Section 3.11
of the Plan (generally relating to the effects of certain
reorganizations and other extraordinary transact
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