1
EXHIBIT 10(m) (i)
LIZ CLAIBORNE, INC.
OUTSIDE DIRECTORS' 1991 STOCK OWNERSHIP PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT (the "Agreement"), dated as of
May 16, 1996, between LIZ CLAIBORNE, INC., a Delaware corporation (the
"Company"), and _______________, a non-employee director of the Company (the
"Optionee").
The Company's Outside Directors' 1991 Stock Ownership Plan, as
amended and restated (the "Plan"), provides for the grant, as of the date on
which the Company's stockholders approved the amended and restated Plan, of an
option to purchase 1,000 shares of the Company's Common Stock to each of the
Company's non-employee directors.
The amended and restated Plan was approved by the Company's
stockholders on May 16, 1996.
In consideration of the foregoing and of the mutual undertakings set
forth in this Agreement, the Company and the Optionee hereby agree as follows:
SECTION 1. Grant of Option.
The Company hereby grants to the Optionee a nonqualified stock
option (the "Option") to purchase 1,000 shares of common stock of the Company
("Common Stock") at a purchase price of $36.75 per share, equal to the Fair
Market Value thereof (as defined under the Plan) on the date hereof.
2
SECTION 2. Exercisability.
Subject to the further terms of this Agreement, the Option shall
become exercisable with respect to 25% of the shares of Common Stock initially
subject thereto on the first anniversary of the date of this Agreement and with
respect to an additional 25% and 50% of such shares on the second and third
anniversaries, respectively, of the date of this Agreement, provided that the
Optionee is then a director of the Company. Unless earlier terminated pursuant
to the provisions of the Plan, the unexercised portion of the Option shall
expire and cease to be exercisable at 12:01 a.m. on the tenth anniversary of the
date of this Agreement. The Option may be partially exercised from time to time
up to the amount of shares exercisable at such time as set forth above.
SECTION 3. Method of Exercise.
The Option or any part thereof may be exercised only by the giving
of written notice to the Company on such form and in such manner as the Company
shall prescribe. Such written notice must be accompanied by payment of the full
purchase price for the number of shares with respect to which the Option is
being exercised. Such payment may be made by one or a combination of the
following methods: (a) in cash; (b) by a certified or official bank check (or
the equivalent thereof acceptable to the Company); or (c) by delivery of shares
of Common Stock acquired at least six months prior to the option exercise date
and having a Fair Market Value as of the exercise date equal to all or part of
the option exercise price. The date of exercise of the Option shall be the date
on
2
3
which written notice of exercise is hand delivered to the Company, during normal
business hours, at its address as provided in Section 6 of this Agreement, or,
if mailed, the date on which it is postmarked, provided such notice is actually
received. Promptly after receiving payment of the full option exercise price,
the Company shall deliver to the Optionee a certificate representing the shares
of Common Stock for which the Option has been exercised.
SECTION 4. Termination of Employment; Death.
4.1 Upon termination of the Optionee's membership on the Company's
Board of Directors for any reason, the Option shall terminate and expire except
as provided in Section 4.2 of this Agreement.
4.2 If the Optionee's membership on the Board terminates for any
reason other than removal for cause, the Option shall be exercisable, but only
to the extent it was exercisable on the date of such termination; provided that
such exercise must occur by the first anniversary of termination on the account
of death, by the third anniversary of termination on account of retirement with
at least five years of Board membership or otherwise within ninety (90) days
following the date of such termination. Exercise following the Optionee's death
shall be made only by the Optionee's executor or administrator, unless the
Optionee's will specifically disposes of the Option, in which case exercise
shall be made only by the recipient of such specific disposition.
3
4
SECTION 5. Plan Provisions to Prevail.
This Agreement is subject to all of the terms and provisions of the
Plan. Without limiting the generality of the foregoing, by entering into this
Agreement, the Optionee agrees that neither any employee of the Company nor any
member of the Company's Board of Directors or the Committee (as defined in the
Plan) shall be liable for any action or determination made in good faith with
respect to the Plan or any award thereunder or this Agreement. In the event that
there is any inconsistency between the provisions of this Agreement and of the
Plan, the provisions of the Plan shall govern.
SECTION 6. Notices.
Any notice to be given to the Company hereunder shall be in writing
and shall be addressed to the Senior Vice President, Finance, of the Company at
Liz Claiborne, Inc., One Claiborne Avenue, North Bergen, NJ 07047, or at such
other address as the Company may hereafter designate to the Optionee by notice
as provided in this Section 6. Any notice to be given to the Optionee hereunder
shall be addressed to the Optionee at the address set forth beneath his or her
signature hereto, or at such other address as the Optionee may hereafter
designate to the Company by notice as provided herein. A notice shall be deemed
to have been duly given when personally delivered or mailed by registered or
certified mail to the party entitled to receive it.
4
5
SECTION 7. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and the successors and assigns of the Company and, to the extent
consistent with Section 4 of this Agreement and with the Plan, the heirs and
personal representatives of the Optionee.
SECTION 8. Governing Law.
This Agreement shall be interpreted, construed and administered in
accordance with the laws of the State of Delaware as they apply to contracts
made, delivered and to be wholly performed in the State of Delaware.
5
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first written above.
LIZ CLAIBORNE, INC.
ATTEST:_______________________ By:___________________________
Name: Samuel M. Miller
Title: Senior Vice President-
Finance and Chief Financial
Officer
_______________, Optionee
Name:
Address:_______________________
6