Exhibit 10.31
Stock Option
Agreement
, 20
This is a Stock Option Agreement
between Saks Incorporated (the “ Company
”) and the individual who has executed this Stock Option
Agreement above the signature line “Signature of
Optionee”) (the “ Optionee
”).
Preliminary
Statement
This Agreement is made pursuant to
the Company’s 2004 Long-Term Incentive Plan (the “
Plan ”). Capitalized terms used but not defined
in this Agreement are defined in the Plan as of, and without giving
effect to any amendment after, the date of this
Agreement.
Terms and
Conditions
The Company and the Optionee agree
as follows:
1. Options
Covered.
a. This Agreement is an agreement
referred to in paragraph 6 of the Plan. For each of the
Company’s stock option grants to the Optionee pursuant to the
Plan (each an “ Option Grant ”), this
Agreement, the Plan, and each document given to the Optionee
reflecting the amount, exercisability, and other terms of the
Option Grant (“ Grant Document ”) govern.
Each Grant Document is incorporated by reference into, and made a
part of, this Agreement. In this Agreement the words
(i) “ Common Stock ” mean the
Company’s Common Stock, par value $.10 per share,
(ii) “ Option ” and “
Options ” mean the right and option to purchase
all or any part of the number of shares of Common Stock subject to
an Option Grant, (iii) “ exercise of the
Options ” and similar words used in this Agreement
mean the purchase of shares of Common Stock subject to an Option
Grant in accordance with this Agreement, (iv) “
Exercise Price ” mean the price the Optionee
must pay to the Company to exercise an option as specified by the
Company in a Grant Document. The Optionee is not required to
exercise the Options. The Options are not “incentive stock
options” as those terms are used in Section 422 of the
Internal Revenue Code of 1986.
b. No Option may be exercised after
the date that is the seventh anniversary of the Option’s date
of grant and will terminate on that date (the “ Option
Termination Date ”).
2. Exercisability of
Options .
a. Except as the Grant Document may
otherwise specify for an Option Grant and (i) subject to the
other Sections of this Agreement and the Plan, and (ii) unless
the Options have terminated or have been forfeited in accordance
with this Agreement or the Plan, the Optionee on or before the
Option Termination Date may purchase shares of Common Stock subject
to an Option Grant as follows:
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Percent Of Number Of Shares Specified In The Option Grant That May Be Purchased
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Date After Which Shares May Be
Purchased
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25%
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First
anniversary of date of grant
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50%
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Second
anniversary of date of grant
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75%
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Third
anniversary of date of grant
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100%
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Fourth
anniversary of date of grant
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The above vesting schedule applies
only if the Grant Document is silent as to vesting.
3 . Exercising the
Options.
a. The Optionee may exercise Options
that are exercisable in accordance with Section 2 and that
have not terminated or been forfeited in accordance with this
Agreement or the Plan. To exercise Options included as part of an
Option Grant, the Optionee must, on or prior to the Option
Termination Date for the Option Grant, notify the Company
(attention: Senior Stock Plan Administrator) of the number of whole
shares of Common Stock the Optionee intends to purchase. The
Optionee may not purchase less than 100 shares of Common Stock upon
any exercise unless the number of shares of Common Stock subject to
the Options at the time of exercise is less than that number.
Unless otherwise directed by the Company and subject to
Section 10, the Optionee must include payment of the Exercise
Price times the number of shares of Common Stock to be purchased
(the “ Purchase Price ”). The date on
which the Optionee delivers the written notice to the Company in
accordance with this subsection a. is referred to in this Agreement
as the “ Exercise Date. ” Any fraction of
a share of Common Stock that would be required to pay the Purchase
Price will be disregarded and the remaining amount due will be paid
in cash by the Optionee.
b. The Optionee must pay the
Purchase Price (1) in cash, (2) by delivery (either
actual delivery or by attestation procedures established by the
Company) of shares of Common Stock having an aggregate fair market
value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of the exercise,
(3) except as may be prohibited by applicable law, in cash by
a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise, or (4) by
combination of (1) and (2).
c. When the Optionee complies with
the requirements of this Section 3 and is otherwise in
compliance with this Agreement and the Plan, in each case to the
reasonable satisfaction of the Committee, the Company will promptly
deliver to the Optionee one or more stock certificates that
together represent, or at the Company’s election deliver to
the Optionee other appropriate evidence of, the shares of Common
Stock that the Optionee has purchased.
4. Termination of
Employment .
a. Except as provided in this
Section 4 and in Section 5, the Optionee may not exercise
Options unless the Optionee is then in the employ of the Company or
an affiliated corporation, and the Optionee has remained
continuously so employed since the date of grant of the
Options.
b. If the Optionee’s
employment terminates (other than by reason of disability,
retirement from employment with the Company at age 65, or death),
the Optionee may, for a period of three months from the date of
termination, exercise all Options that are exercisable in
accordance with Section 2 (determined in accordance with
subsection d. of this Section 4) an
