EXHIBIT 4(e)
9/8/94
COMBINATION TIME-BASED AND
PERFORMANCE-BASED VESTING
NON-INSIDER FORM
FIRST BRANDS CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 9th day of August, 1994, by and between
FIRST BRANDS CORPORATION (the 'Company'), a Delaware corporation having its
headquarters in Danbury, Connecticut,
and
, an employee of the Company
('Optionee').
ARTICLE 1
RECITALS
1.1 Optionee is an employee of the Company, and the Company desires to
provide Optionee with an increased incentive to achieve long-range corporate
objectives and to participate in the long-term growth and financial success of
the Company.
1.2 In order to provide such an increased incentive to its employees, the
Company has adopted the First Brands Corporation 1994 Performance Stock Option
and Incentive Plan (the 'Plan').
1.3 The Company desires to grant to Optionee under the Plan stock options
that do not qualify as 'incentive stock options' within the meaning of Section
422 or any successor provision of the Internal Revenue Code of 1986, as amended
(the 'Code').
1.4 The terms of the Plan are incorporated by reference herein in their
entirety, and capitalized terms used in this Agreement, unless otherwise defined
herein, shall have the respective meanings given to such terms in the Plan.
ARTICLE 2
OPTION GRANT
2.1 Grant. The Company hereby grants to Optionee, subject to the provisions
of this Agreement, the right and option to
purchase up to, but not exceeding in the aggregate, shares of the
Common Stock of the Company, par value $.01 per share (the 'Common Stock'), for
the period beginning on August 9, 1994 and ending on August 8, 2004 (the 'Option
Term'), at the option price of $32.750 per share.
2.2 Nonqualified Options. The options granted hereunder (the 'Options')
shall be Nonqualified Options and are not intended to qualify as 'incentive
stock options' within the meaning of Section 422 of the Code.
ARTICLE 3
EXERCISE AND WITHHOLDING
3.1 (a) Vesting. The Options shall consist of two portions, a time-based
portion in respect of shares of Common Stock (the 'Time-Based
Portion') and a performance-based portion in respect of the remaining
shares of Common Stock (the 'Performance-Based Portion'). The
Time-Based Portion shall become exercisable ('vest') on August 8, 1996. The
Performance-Based Portion shall vest upon the earlier of (i) the last day of the
first period of ten consecutive trading days following the date hereof during
which the Fair Market Value per share exceeds $42.00 or (ii) August 8, 2003.
There will not be any partial vesting of either the Time-Based Portion or the
Performance-Based Portion prior to the respective vesting dates set forth above.
(b) Acceleration of Vesting. All Options shall become immediately
exercisable (i) upon the death, Disability or Retirement of Optionee, and (ii)
upon the occurrence of a Change of Control of the Company.
(c) Exercise. Once Options have vested, they may be exercised at any time
and from time to time during the Option Term (except as set forth in Article 4
hereof).
3.2 Method of Exercise. Options shall be exercised by Optionee by
delivering to the Company a Notice in the form set forth as Exhibit A hereto,
together with a check payable to the order of the Company and/or shares of
Common Stock, with a stock power executed in blank, equal in value to the option
price of the shares being purchased. Shares of Common Stock surrendered in
exercise of all of any portion of the Option shall be valued at their Fair
Market Value on the date of exercise. Active employees may also use the
'Cashless Exercise Program' which was announced to Optionees on June 11, 1991. A
copy is attached as Exhibit B to this Agreement.
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3.3 Compliance with Securities Laws. Optionee shall deliver to the Company
at the time all or any portion of the Options is exercised any additional
evidence as the Company may deem necessary to establish that such exercise is in
compliance with all applicable securities laws.
3.4 (a) Tax Withholding. The Company shall notify Optionee of the amount of
withholding tax, if any, which must be paid under federal and, where applicable,
state and local law upon exercise of Options. The Company shall have the right
to require Optionee to pay such withholding taxes in either of the following two
ways:
(i) Cash. Such payment may be made in cash, through withholding from
Optionee's salary or otherwise, or
(ii) Common Stock. At the election of Optionee, subject to the
approval of the Compensation Committee of the Board of Directors of the
Company (the 'Committee'), such payment may be made, in whole or in part,
in shares of Common Stock.
(b) Payment in Shares of Common Stock. Payment of withholding taxes in
shares of Common Stock may be made in any of the following three ways, at the
election of Optionee, subject to the approval of the Committee, and compliance
with such limitations, conditions and restrictions as the Committee may impose,
or by a combination of any of such ways:
(i) Surrender of Options. Optionee may have shares withheld from
shares otherwise issuable to Optionee in connection with the exercise of
all or any portion of the Options;
(ii) Previously Acquired Shares. Optionee may deliver previously
acquired shares to the Company prior to transfer to Optionee of shares
issuable in connection with the exercise of all or any portion of the
Options; or
(iii) Tender Back of Shares. Optionee may tender back shares to the
Company from shares issued to Optionee in connection with the exercise of
all or any portion of the Options.
(c) Valuation. Shares so withheld, delivered or tendered back shall be
valued at their Fair Market Value on the date on which the amount of tax to be
withheld is determined (the 'Tax Date'). The tax withholding obligations that
may be paid by such withholding of shares otherwise issuable in connection with
the exercise of all or any portion of the Options or the delivery of shares held
less than six months may not exceed the minimum withholding requirements imposed
by law. The tax withholding
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obligations that may be paid by the delivery or tender back of shares held by
the Optionee for six months or longer may exceed the Optionee's tax obligations
associated with the transaction, including any related FICA obligations,
determined based upon the Optionee's maximum marginal tax rate. Solely for the
purposes of this Section 3.4(c), the six-month period with respect to any
restricted stock granted under the Plan or the Company's 1989 Long-Term
Incentive Plan and used by Optionee to pay a tax withholding obligation shall
begin upon the lapse of the applicable restrictions.
(d) Election. Optionee's election to have withheld shares of Common stock that
are otherwise issuable, or to deliver or tender back shares, shall be in
writing, shall be irrevocable and shall be delivered to the Company prior to the
Tax Date. Such election shall be subject to the approval of the Committee.
ARTICLE 4
TERMINATION OF EMPLOYMENT
4.1 Termination for Reasons Other than Disability, Retirement or Death. If
Optionee's employment by the Company shall terminate for any reason other than
Disability or Retirement, or death, all Options which are unexercised on the
date of termination of employment shall expire and cease to be exercisable on
the earlier of (i) sixty days following the date of such termination of
employment, or (ii) the expiration of the Option Term. The Committee, in its
sole discretion, may notify Optionee prior to the date of expiration of such
Options that any or all of such Options shall remain exercisable for a
particular period of time following such date.
4.2 Retirement. Upon Optionee's Retirement, all Options may be exercised at
any time and from time to time for a period ending on the earlier of (i) two
years following the date of Optionee's Retirement or (ii) the expiration of the
Option Term.
4.3 Death. Upon Optionee's death, Optionee's executors, administrators, or
any person or persons to whom Options have been transferred by will or by the
laws of descent and distribution, shall have the right at any time and from time
to time to exercise such Options for a period ending on the earlier of (i) two
years following the date of Optionee's death or (ii) the expiration of the
Option Term.
4.4 Disability. Upon Optionee's Disability, all Options may be exercised at
any time and from time to time by Optionee or his guardian or legal
representative for a period ending on the earlier of (i) two years from the date
such Disability occurred, or (ii) the expiration of the Option Term.
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ARTICLE 5
MISCELLANEOUS
5.1 Change in Common Stock. In the event of any change in the outstanding
shares of the Common Stock of the Company by reason of any stock split, stock
dividend, recapitalization, reclassification, spin-off, merger, consolidation,
combination or exchange of shares or other similar corporate change, or in the
event of any special distribution to stockholders (other than a normal cash
dividend), then the Committee shall make such adjustment or substitution in the
kind and number of shares and prices per share applicable to the Options as the
Committee determines to be equitable and appropriate.
5.2 No Rights as Stockholder. Nothing contained in this Agreement or in the
Plan shall be deemed to confer upon Optionee any right to prevent or to approve
or vote upon any of the corporate actions described in this Article 6. The
existence of the Options shall not affect in any way the right or the power of
the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise. Optionee shall not be deemed for any purpose to
be a stockholder of the Company in respect of any shares as to which Options
shall not have been exercised as herein provided, and until such shares have
been issued to Optionee by the Company hereunder.
5.3 Optionee. Whenever the word 'Optionee' is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
options may be transferred by will or by the laws of descent and distribution,
the word 'Optionee' shall be deemed to include such person or persons.
5.4 No Transferability. The Options are not transferable by Optionee
otherwise than by will or the laws of descent and distribution and are
exercisable during Optionee's lifetime only by him or his guardian or legal
representative. No assignment or transfer of the Options, or of the rights
represented thereby, whether voluntary or involuntary, by the operation of law
or otherwise (except by will or the laws of descent and distribution), shall
vest in the assignee or transferee any
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interest or right herein whatsoever, but immediately upon any such assignment or
transfer, the Options shall terminate and become of no further effect.
5.5 No Right to Employment. Nothing in this Agreement or the Plan shall
confer upon Optionee any right to continue in the employ of the Company or shall
affect the right of the Company to terminate the employment of Optionee with or
without cause.
5.6 Registration of Shares Under Plan. The Company shall register the
shares reserved for issuance under the Plan on a Form S-8 or any successor form
promulgated by the Securities and Exchange Commission and shall maintain the
effectiveness of such registration unless the Committee determines that
maintaining such effectiveness would be impracticable or materially adverse to
the interests of the Company.
5.7 Notices. Every notice or other communication relating to this Agreement
shall be in writing and shall be mailed to or delivered to the party for whom it
is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided,
however, that unless and until some other address be so designated, all notices
or communications by Optionee to the Company shall be mailed or delivered to the
Company at its office at 83 Wooster Heights Road, Danbury, Connecticut 06813,
and all notices or communications by the Company to Optionee may be given to
Optionee personally or may be mailed to him.
5.8 Entire Agreement. This Agreement represents the entire agreement of the
parties with respect to the subject matter hereof. The Agreement may be amended
at any time by written agreement of the parties hereto.
5.9 Governing Law. This Agreement and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of
Delaware other than the conflict of laws provisions of such laws.
5.10 Severability. If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with the law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this Agreement, shall to
the full extent consistent with law continue in full force and effect.
5.11 Effect on Other Plans. Income realized by Optionee pursuant to this
Agreement shall not be included in Optionee's
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earnings for the purpose of any benefit plan of the Company in which Optionee
may be enrolled or for which Optionee may become eligible unless otherwise
specifically provided for in such plan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
OPTIONEE: FIRST BRANDS CORPORATION
...................................... By ..............................
Secretary
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EXHIBIT A
EXERCISE OF STOCK OPTION
FIRST BRANDS 1994 PERFORMANCE STOCK OPTION AND INCENTIVE PLAN
Pursuant to the provisions of the Stock Option Agreement entered into as of
August 9, 1994, between First Brands Corporation (the 'Company') and
, Optionee, I hereby exercise the nonqualified stock option
granted under the terms of this Agreement to the extent of shares of
the Common Stock of the Company subject to the Time-Based Portion and/or
shares of Common Stock of the Company subject to the Performance-Based Portion,
for a total of shares (the 'Shares'). I deliver to you herewith the
following in payment for the Shares:
$ in cash
Stock certificates for shares of Common Stock of the Company
Cashless Exercise Program
Date: ................................ ..................................
Optionee
..................................
Address
..................................
Social Security Number
EXHIBIT B
FIRST BRANDS CORPORATION
CASHLESS EXERCISE OF STOCK OPTIONS
Participants in the First Brands Stock Option Programs who are actively
employed may sell option shares without tendering cash or existing shares in
advance for payment of the option price to the Company. In this process,
participants essentially assign the rights to sell their option shares to Lehman
Brothers who in return are required to pay the proceeds to First Brands. The
Company then uses our payroll system to withhold applicable federal, state and
local taxes, brokerage and transaction fees. The option price is deducted from
the proceeds and the optionee receives a check from the Cashier's Department.
To initiate a transaction under this procedure the optionee must execute
two forms (which are available from Lisa Hull, Shareholder Relations
Administrator, in Danbury, extension 2581) by 12:00 noon on the date the option
is to be exercised. Forms received after 12:00 noon will be processed in the
next day's trading. All option shares sold will be at the current market price
at the time of the sale. Proceeds will be paid to the optionee after the funds
have cleared the brokerage accounts and have been wired to the Company.
Brokerage fees charged by Lehman Brothers will be at their discounted rates.
If you have any questions about this procedure or would like to request
exercise forms, please call Lisa Hull in Danbury on extension 2581.