EXHIBIT 10.2
THE LIMITED, INC.
1996 STOCK PLAN FOR NON-ASSOCIATE DIRECTORS
1. Purpose
The purpose of The Limited, Inc. 1996 Stock Plan for Non-Associate
Directors (the "Plan") is to promote the interests of The Limited, Inc. (the
"Company") and its stockholders by increasing the proprietary interest of non-
associate directors in the growth and performance of the Company by granting
such directors options to purchase shares of common stock (the "Shares") of the
Company and by awarding Shares to such directors in respect of a portion of the
Retainer (as defined in Section 6(b)) payable to such directors.
2. Administration
The Plan shall be administered by the Company's Board of Directors (the
"Board"). Subject to the provisions of the Plan, the Board shall be authorized
to interpret the Plan, to establish, amend, and rescind any rules and
regulations relating to the Plan and to make all other determinations necessary
or advisable for the administration of the Plan; provided, however, that the
Board shall have no discretion with respect to the selection of directors to
receive options, the number of Shares subject to any such options, the purchase
price thereunder or the timing of grants of options under the Plan. The
determinations of the Board in the administration of the Plan, as described
herein, shall be final and conclusive. The Secretary of the Company shall be
authorized to implement the Plan in accordance with its terms and to take such
actions of a ministerial nature as shall be necessary to effectuate the intent
and purposes thereof. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware.
3. Eligibility
The class of individuals eligible to receive grants of options and awards
of Shares in respect of the Retainer under the Plan shall be directors of the
Company who are not associates of the Company or its affiliates ("Eligible
Directors"). Any holder of an option or Shares granted hereunder shall
hereinafter be referred to as a "Participant".
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 7, an aggregate of 100,000
Shares shall be available for issuance under the Plan. The Shares deliverable
upon the exercise of options or in respect of the Retainer may be made available
from authorized but unissued Shares or treasury Shares. If any option granted
under the Plan shall terminate for any reason without having been exercised, the
Shares subject to, but not delivered under, such option shall be available for
issuance under the Plan.
5. Grant, Terms and Conditions of Options
(a) Subject to the approval by the Company's shareholders of this Plan,
each Eligible Director on the date of such approval will be granted on such date
an option to purchase 1,000 Shares.
(b) Each Eligible Director on the first business day of a fiscal year of
the Company beginning thereafter, will be granted on such a day an option to
purchase 1,000 Shares.
(c) The options granted will be nonstatutory stock options not intended to
qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and shall have the following terms and conditions:
(i) Price. The purchase price per Share deliverable upon the
exercise of each option shall be 100% of the Fair Market Value per Share on
the date the option is granted. For purposes of the Plan, Fair Market
Value shall be the closing price of the Shares as reported on the principal
exchange on which the shares are listed for the date in question, or if
there were no sales on such date, the most recent prior date on which there
were sales.
(ii) Payment. Options may be exercised only upon payment of the
purchase price thereof in full. Such payment shall be made in cash.
(iii) Exercisability and Term of Options. Options shall become
exercisable in four equal annual installments commencing on the first
anniversary of the date of grant, provided the holder of such Option is an
Eligible Director on such anniversary, and shall be exercisable until the
earlier of ten years from the date of grant and the expiration of the one
year period provided in paragraph (iv) below.
(iv) Termination of Service as Eligible Director. Upon termination
of a Participant's service as a director of the Company for any reason, all
outstanding options held by such Eligible Director, to the extent then
exercisable, shall be exercisable in whole or in part for a period of one
year
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from the date upon which the Participant ceases to be a Director, provided
that in no event shall the options be exercisable beyond the period
provided for in paragraph (iii) above.
(v) Nontransferability of Options. No option may be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered
by a Participant otherwise than by will or the laws of descent and
distribution, and during the lifetime of the Participant to whom an option
is granted it may be exercised only by the Participant or by the
Participant's guardian or legal representative. Notwithstanding the
foregoing, options may be transferred pursuant to a qualified domestic
relations order.
(vi) Option Agreement. Each option granted hereunder shall be
evidenced by an agreement with the Company which shall contain the terms
and provisions set forth herein and shall otherwise be consistent with the
provisions of the Plan.
6. Grant of Shares
(a) From and after the approval of the Plan by the Company's
shareholders, 50% of the Retainer of each Eligible Director shall be paid in a
number of Shares equal to the quotient of (i) 50% of the Retainer divided by
(ii) the Fair Market Value on the Retainer Payment Date. Cash shall be paid to
an Eligible Director in lieu of a fractional Share.
(b) For purposes of this Plan "Retainer" shall mean the annual
retainer payable to an Eligible Director (as defined in Section 3) for any
fiscal quarter of the Company, the amount of which Retainer may not be changed
for purposes of this Plan more often than once every six months and
"Retainer Payment Date" shall mean the first business day of the
Company's calendar quarter.
7. Adjustment of and Changes in Shares
In the event of a stock split, stock dividend, extraordinary cash
dividend, subdivision or combination of the Shares or other change in corporate
structure affecting the Shares, the number of Shares authorized by the Plan
shall be increased or decreased proportionately, as the case may be, and the
number of Shares subject to any outstanding option shall be increased or
decreased proportionately, as the case may be, with appropriate corresponding
adjustment in the purchase price per Share thereunder.
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8. No Rights of Shareholders
Neither a Participant nor a Participant's legal representative shall
be, or have any of the rights and privileges of, a shareholder of the Company in
respect of any Shares purchasable upon the exercise of any option, in whole or
in part, unless and until certificates for such Shares shall have been issued.
9. Plan Amendments
The Plan may be amended by the Board as it shall deem advisable or to
conform to any change in any law or regulation applicable thereto; provided,
that the Board may not, without the authorization and approval of shareholders
of the Company: (i) increase the number of Shares which may be purchased
pursuant to options hereunder, either individually or in the aggregate, except
as permitted by Section 7, (ii) change the requirement of Section 5(b) that
option grants be priced at Fair Market Value, except as permitted by Section 7,
(iii) modify in any respect the class of individuals who constitute Eligible
Directors or (iv) materially increase the benefits accruing to Participants
hereunder. The provisions of Sections 3, 5 and/or 6 may not be amended more
often than once every six months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended, or the
rules under either such statute.
10. Listing and Registration
Each Share shall be subject to the requirement that if at any time the
Board shall determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the granting of
such Shares, no such Share may be disposed of unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Board.
11. Effective Date and Duration of Plan
The Plan shall become effective on the date the Company's shareholders
approve the Plan. The Plan shall terminate the day following the tenth Annual
Shareholders Meeting at which Directors are elected succeeding such approval,
unless the Plan is extended or terminated at an earlier date by Shareholders or
is terminated by exhaustion of the Shares available for issuance hereunder.
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