THE
ANNTAYLOR STORES CORPORATION
2002 STOCK OPTION AND RESTRICTED
STOCK AND UNIT AWARD PLAN
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Table of Contents
Section Page
1. Purpose....................................................1
2. Definitions................................................1
3. Administration.............................................3
4. Eligibility................................................4
5. Stock......................................................4
6. Terms and Conditions of Options............................5
7. Terms and Conditions of Restricted Stock Awards and
Restricted Unit Awards.....................................9
8. Withholding Taxes.........................................11
9. Term of Plan..............................................12
10. Amendment and Termination of the Plan....................12
11. Effective Date...........................................12
12. Miscellaneous............................................12
13. Governing Law............................................13
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List of Defined Terms
Term Section
Acceleration Event.....................................6(i)(2)
Board........................................................3
Cause........................................................2
Code.........................................................1
Committee ...................................................3
Common Stock.................................................2
Corporation..................................................1
Disability ..................................................2
Exchange Act ................................................3
Executive Officers...........................................3
Fair Market Value ...........................................2
Grantee......................................................2
Grants.......................................................3
Incentive Stock Option.......................................1
Nonqualified Stock Options...................................1
Option Agreements ...........................................3
Option Price.................................................3
Optionee ....................................................4
Option ......................................................2
Plan ........................................................1
Restricted Award Agreement ..................................3
Restricted Period ........................................7(b)
Restricted Share ............................................2
Restricted Stock Award ..................................... 3
Restricted Unit .............................................2
Restricted Unit Award .......................................3
Rule 16b-3 ..................................................3
Subsidiary Corporation ......................................2
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THE ANNTAYLOR STORES CORPORATION
2002 STOCK OPTION
AND RESTRICTED STOCK AND UNIT AWARD PLAN
1. Purpose.
This 2002 Stock Option and Restricted Stock and Unit Award Plan (the
"Plan"), is intended to encourage stock ownership by employees of AnnTaylor
Stores Corporation (the "Corporation"), its divisions and Subsidiary
Corporations, so that they may acquire or increase their proprietary interest
in the Corporation, and to encourage such employees to remain in the employ
of the Corporation, its divisions and Subsidiary Corporations, and to put
forth maximum efforts for the success of the business. The Plan is also
intended to encourage directors of the Corporation who are not employees or
officers of the Corporation or its Subsidiary Corporations ("Eligible
Directors") to acquire or increase a proprietary interest in the Corporation,
to further promote and strengthen the interest of such Eligible Directors in
the development and financial success of the Corporation, and to assist the
Corporation in attracting and retaining highly qualified directors by
providing such directors options to purchase shares of Common Stock. It is
further intended that no Option granted pursuant to this Plan shall
constitute an "incentive stock option" ("Incentive Stock Option") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), and all Options so granted shall constitute "nonqualified stock
options" ("Nonqualified Stock Options").
2. Definitions.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "CAUSE" used in connection with the termination of employment or
service of a Grantee, shall mean a termination of employment or
service of the Grantee by the Corporation or a division or Subsidiary
Corporation due to (i) the Grantee's failure to render services in
accordance with the terms of such Grantee's employment or service,
which failure amounts to a material neglect of such Grantee's duties,
(ii) the commission by the Grantee of an act of fraud,
misappropriation (including the unauthorized disclosure of
confidential or proprietary information) or embezzlement, or (iii) a
conviction of or guilty plea or confession to any felony.
(b) "COMMON STOCK" shall mean shares of the Corporation's Common Stock,
par value $.0068 per share.
(c) "DISABILITY" shall mean a Grantee's inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death
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or that has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.
(d) "FAIR MARKET VALUE" per share as of a particular date shall mean (i)
the closing sales price per share of Common Stock as reported on the
New York Stock Exchange (or if the shares of Common Stock are not then
traded on such exchange, on the principal national securities exchange
on which they are then traded) for the last preceding date on which
there was a sale of such Common Stock on such exchange, or (ii) if the
shares of Common Stock are not then traded on a national securities
exchange but are traded on an over-the-counter market, the average of
the closing bid and asked prices for the shares of Common Stock in
such over- the-counter market for the last preceding date on which
there was a sale of such Common Stock in such market, or (iii) if the
shares of Common Stock are not then listed on a national securities
exchange or traded in an over-the-counter market, such value as the
Committee in its discretion may determine.
(e) "GRANTEE" shall mean a person to whom an Option, Restricted Stock
Award or Restricted Unit Award has been granted.
(f) "OPTION" shall mean the right, granted to a Grantee pursuant to
Section 3, to purchase a specified number of shares of Common Stock,
on the terms and subject to the restrictions set forth in this Plan
and by the Committee upon the grant of the Option to the Grantee.
(g) "RESTRICTED SHARE" shall mean a share of Common Stock, awarded to a
Grantee pursuant to Section 3, that is subject to the terms and
restrictions set forth in this Plan and by the Committee upon the
award of the Restricted Share to the Grantee.
(h) "RESTRICTED UNIT" shall mean the right, awarded to a Grantee pursuant
to Section 3, to receive an amount in cash equal to the Fair Market
Value of one share of Common Stock, on the terms and subject to the
restrictions set forth in this Plan and by the Committee upon the
award of the Restricted Unit to the Grantee.
(i) "RETIREMENT" shall have such meaning as the Committee shall determine
from time to time.
(j) "SUBSIDIARY CORPORATION" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
employer corporation if, at the time of granting an Option, Restricted
Stock Award or Restricted Unit Award, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing
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fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
3. Administration.
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Corporation (the "Board"). The
Committee shall consist of two or more members of the Board, each of whom
shall be both an "outside director" within the meaning of Section 162(m) of
the Code and a "nonemployee director" within the meaning of Rule 16b-3, as
from time to time amended ("Rule 16b-3"), promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically
granted to it under the Plan or necessary or advisable in the administration
of the Plan, including, without limitation, the authority to grant Options
and make awards of Restricted Shares and Restricted Units ("Restricted Stock
Awards" and "Restricted Unit Awards", respectively, and sometimes
collectively with the grant of Options, "Grants"); to determine the purchase
price of the shares of Common Stock covered by each Option (the "Option
Price"); to determine the persons to whom, and the time or times at which,
Options, Restricted Stock Awards and Restricted Unit Awards shall be granted;
to determine the number of shares to be covered by each Option, and to
determine the number of Restricted Shares and Restricted Units to be covered
by each Restricted Stock Award and Restricted Unit Award; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the agreements (which need not
be identical) entered into in connection with grants of Options ("Option
Agreements") and Restricted Stock Awards and Restricted Unit Awards
("Restricted Award Agreements"); and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
The determinations of the Committee shall be binding and conclusive on
all parties. The Committee may delegate to one or more of its members or to
one or more agents such administrative duties as it may deem advisable, and
the Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee shall have the authority in its discretion to delegate to specified
officers of the Corporation the power to make Grants, including to determine
the terms of such Grants, and the power to extend the exercisability of
Options pursuant to Section 6(f) or 6(g) hereof, in each case consistent with
the terms of this Plan and subject to such restrictions, if any, as the
Committee may specify when making such delegation; provided that the
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delegates shall not have authority to make Grants to, or extend the
exercisability of Options held by, such delegates or any Executive Officer
(as defined below in this Section 3).
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The Board shall fill all vacancies, however caused, in the Committee.
The Board may from time to time appoint additional members to the Committee,
and may at any time remove one or more Committee members and substitute
others. One member of the Committee shall be selected by the Board as
chairman. The Committee shall hold its meetings at such times and places
as it shall deem advisable. All determinations of the Committee shall be
made by a majority of its members either present in person or participating
by conference telephone at any meeting or by written consent, except that,
with respect to Grantees who are executive officers of the Corporation within
the meaning of Rule 3-b7 promulgated under Section 3 of the Exchange Act
("Executive Officers"), all action of the Committee shall be taken solely by
those members of the Committee who are "outside directors" and "nonemployee
directors" as defined above, even if less than a majority of the Committee.
The Committee may appoint a secretary and make such rules and regulations for
the conduct of its business as it shall deem advisable, and shall keep
minutes of its meetings.
No member of the Board or Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any Grant
made hereunder.
4. Eligibility.
Options, Restricted Stock Awards and Restricted Unit Awards may be
granted to employees (including, without limitation, officers who are
employees) of the Corporation or its present or future divisions and
Subsidiary Corporations, and to directors (whether or not employees) of the
Corporation or its present or future divisions and Subsidiary Corporations.
In determining the persons to whom Options, Restricted Stock Awards and
Restricted Unit Awards shall be granted and the number of shares to be
covered by each Option, and the number of Restricted Shares and Restricted
Units to be covered by each Restricted Stock Award and Restricted Unit Award,
the Committee shall take into account the duties of the respective persons,
their present and potential contributions to the success of the Corporation
and such other factors as the Committee shall deem relevant in connection
with accomplishing the purpose of the Plan. A person to whom an Option has
been granted hereunder is sometimes referred to herein as an "Optionee".
A Grantee shall be eligible to receive more than one Grant during the
term of the Plan, but only on the terms and subject to the restrictions
hereinafter set forth.
5. Stock.
The shares of Common Stock subject to Options and Restricted Stock
Awards hereunder shall be shares of the Corporation that are held by the
Corporation as treasury shares. Subject to the next sentence, the aggregate
number of shares of Common Stock as to which Options may be granted from time
to time under this Plan shall not exceed 1,650,000; the aggregate number of
shares of Common Stock as to which Restricted Stock Awards may be granted
from time to time shall not exceed 350,000; and the number of Restricted
Units that may be granted from time to time shall not exceed 50,000. The
limitations established by the preceding sentence shall be subject to
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adjustment as provided in Section 6(i) hereof. No single employee may be
granted Options covering more than 400,000 shares of Common Stock, or
Restricted Stock Awards or Restricted Unit Awards (constituting performance
based compensation within the meaning of Section 162(m) of the Code) covering
more than 100,000 shares of Common Stock, (subject to any adjustments
pursuant to Section 6(i) below) during any fiscal year of the Company.
If any shares subject to an Option Grant or Restricted Stock Award are
forfeited, canceled, exchanged or surrendered or if a Grant otherwise
terminates or expires without a distribution of shares to the Grantee, the
shares of Common Stock with respect to such Grant shall, to the extent of any
such forfeiture, cancellation, exchange, surrender, termination or
expiration, again be available for Grants under the Plan. If any Restricted
Units are forfeited, canceled, exchanged or surrendered or if a Restricted
Unit Award otherwise terminates or expires without any payment being required
to be made with respect to any of the Restricted Units subject thereto, then
such Restricted Units shall, to the extent of any such forfeiture,
cancellation, exchange, surrender, termination or expiration, again be
available for Grants under the Plan.
6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be evidenced by a written
Option Agreement between the Corporation and the Optionee, which agreement
shall comply with and be subject to the following terms and conditions (and
with such other terms and conditions not inconsistent with the terms of this
Plan as the Committee, in its discretion, shall establish):
(a) NUMBER OF SHARES. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) TYPE OF OPTION. Each Option Agreement shall specifically state that no
portion of the Option constitutes an Incentive Stock Option and the
entire Option constitutes a Nonqualified Stock Option.
(c) OPTION PRICE. Each Option Agreement shall state the Option Price,
which shall be not less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock of the Corporation on the
date of grant of the Option. The Option Price shall be subject to
adjustment as provided in Section 6(i) hereof. The date on which the
Committee adopts a resolution expressly granting an Option shall be
considered the day on which such Option is granted, unless such
resolution expressly provides for a specific later date.
(d) MEDIUM AND TIME OF PAYMENT. The Option Price shall be paid in full, at
the time of exercise, (i) in cash, (ii) in shares of Common Stock
having a Fair Market Value equal to such Option Price provided that
such shares have been held by the Grantee for at least six (6) months
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prior to such exercise, or (iii) in a combination of cash and shares
provided that such shares have been held by the Grantee for at least
six (6) months prior to such exercise, or (iv) in the sole discretion
of the Committee, through a cashless exercise procedure involving a
broker; provided, however, that such method and time for payment shall
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be permitted by and be in compliance with applicable law.
(e) TERM AND EXERCISE OF OPTIONS. Except as provided in Section 6(i)
hereof or unless otherwise determined by the Committee, the shares
covered by an Option shall become exercisable over such period, in
cumulative installments or otherwise, or upon the satisfaction of such
performance goals or other conditions, as the Committee shall
determine; provided, however, that the Committee shall have the
authority to accelerate the exercisability of all or any portion of
any outstanding Option at such time and under such circumstances as
it, in its sole discretion, deems appropriate, and provided further,
however, that such exercise period shall not exceed ten (10) years
from the date of grant of such Option. The exercise period shall be
subject to earlier termination as provided in Sections 6(f) and 6(g)
hereof. An Option may be exercised, as to any or all full shares of
Common Stock as to which the Option has become exercisable, by giving
written notice of such exercise to the Committee; provided, however,
that an Option may not be exercised at any one time as to fewer than
100 shares (or such number of shares as to which the Option is then
exercisable if such number of shares is less than 100).
(f) TERMINATION. Except as provided in this Section 6(f) and in Section
6(g) hereof, an Option may not be exercised unless the Optionee is
then in the employ or service of the Corporation or one of its
divisions or Subsidiary Corporations, and unless the Optionee has
remained continuously so employed or in service since the date of
grant of the Option. In the event that the employment or service of an
Optionee shall terminate or cease other than by reason of death,
Disability or Retirement, all Options theretofore granted to such
Optionee shall, to the extent not theretofore exercised or canceled,
terminate immediately upon such separation of employment or cessation
of service, as applicable; provided, however, that the Committee may
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in its discretion extend the period for exercise of Options that were
exercisable at the time of separation of employment or cessation of
service to a date later than such separation or cessation date, but in
any event not beyond the date on which the Option would otherwise
expire pursuant to Section 6(e) hereof. Nothing in the Plan or in any
Option granted pursuant hereto shall confer upon an individual any
right to continue in the employ or service of the Corporation or any
of its divisions or Subsidiary Corporations or interfere in any way
with the right of the Corporation or any such division or Subsidiary
Corporation to terminate such employment.
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(g) DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die
while employed by or in service to the Corporation or a Subsidiary
Corporation, or if the Optionee's employment or service shall
terminate or cease by reason of Disability or Retirement, all Options
theretofore granted to such Optionee, to the extent exercisable on the
date of death or separation, may be exercised by the Optionee or by
the Optionee's estate or by a person who acquired the right to
exercise such Option by bequest or inheritance or otherwise by reason
of the death or Disability of the Optionee, at any time within three
(3) years after the date of death or termination by reason of
Disability or Retirement, or at such later time as the Committee may
in its discretion determine, but in any event not beyond the date on
which the Option would otherwise expire pursuant to Section 6(e)
hereof.
(h) NONTRANSFERABILITY OF OPTIONS. Options granted under the Plan shall
not be transferable except (i) by will or the laws of descent and
distribution, or (ii) as specifically provided below in this Section
(6)(h). Any Optionee may transfer Nonstatutory Stock Options to
members of his or her Immediate Family (as defined below) if (x) the
option agreement pursuant to which the Option was granted so provides,
(y) such agreement was approved by the Board or the Committee, and (z)
the Optionee does not receive any consideration for the transfer.
"Immediate Family" means children, grandchildren, and spouse of the
Optionee or one or more trusts for the benefit of such family members
or partnerships in which such family members are the only partners.
Any Nonstatutory Stock Option agreement may be amended to provided for
the transferability feature as outlined above, provided that such
amendment is approved by the Board or the Committee. Any Option not
granted pursuant to an option agreement expressly permitting its
transfer shall not be transferable. During the lifetime of the
Optionee, Options may be exercised only by the Optionee, the guardian
or legal representative of the Optionee, or the transferee as
permitted under this Section 6(h).
(i) EFFECT OF CERTAIN CHANGES. (1) If there is any change in the shares of
Common Stock through the declaration of stock dividends, distributions
made with respect to shares of Common Stock, recapitalizations,
restructurings, stock splits, or combinations or exchanges of such
shares, or the like, then the number of shares of Common Stock or
other securities available for Options, the kind and amount of shares
and other securities covered by outstanding Options, and/or the Option
Price, as appropriate, shall be adjusted as necessary to reflect
equitably such change in the shares of Common Stock; provided,
however, that any fractional shares resulting from such adjustment
shall be eliminated.
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(2) If an Acceleration Event (as defined below) shall occur while
unexercisable Options remain outstanding under the Plan, such Options not
therefore exercisable by their terms shall become exercisable in full. An
"Acceleration Event" shall occur if:
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than any person who on the date hereof is a
director or officer of the Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation, or
any corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions as their ownership of
stock of the Corporation, is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the combined
voting power of the Corporation's then outstanding securities;
(B) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with the Corporation to effect a transaction described in clause (A) or (C)
of this Section 6(i)(2) whose election by the Board or nomination for
election by the Corporation's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority thereof; or
(C) there is consummated a merger or consolidation of the Corporation
with any other entity other than a merger or consolidation which would
result in the voting securities of the Corporation outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) more
than 80% of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such
merger or consolidation; or
(D) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition
by the Corporation of all or substantially all of the Corporation's assets.
Following the Acceleration Event, the Committee shall provide for the
cancellation of all Options then outstanding. Upon such cancellation, the
Corporation shall make, in exchange therefor, a cash payment for each such
Option in an amount per share equal to the difference between the per share
exercise price of such Option and the Fair Market Value of a share of Common
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Stock on the date during the prior sixty-day period that produces the highest
Fair Market Value.
(3) In the event of a change in the Common Stock of the Corporation as
presently constituted which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par
value or without par value, the shares resulting from any such change shall
be deemed to be the Common Stock within the meaning of the Plan.
(4) The foregoing adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
(5) Except as hereinbefore expressly provided in this Section 6(i), the
Optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or
by reason of any dissolution, liquidation, merger, or consolidation or
spin-off of assets or stock of another corporation; and any issue by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to the Option. The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or part of its business or assets.
(j) RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares
covered by the Option until the date of the issuance of a stock
certificate for such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distribution of other rights for which the record date is
prior to the date such stock certificate is issued, except as provided
in Section 6(i) hereof.
(k) OTHER PROVISIONS. The Option Agreements authorized under the Plan may
contain such other provisions, including without limitation the
imposition of (1) restrictions upon the exercise of an Option and (2)
provisions that will result in the forfeiture of an Option and/or the
shares acquired thereunder in the event the Optionee breaches
covenants relating to non-competition, confidentiality and
non-solicitation of employees and customers, as the Committee shall
deem advisable.
7. Terms and Conditions of Restricted Stock Awards and Restricted Unit
Awards.
Each Restricted Stock Award and Restricted Unit Award granted under the
Plan shall be evidenced by a written Restricted Award Agreement between the
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Corporation and the Grantee, which agreement shall comply with, and be
subject to, the following terms and conditions (and with such other terms and
conditions not inconsistent with the terms of this Plan as the Committee, in
its discretion, shall establish):
(a) NUMBER OF SHARES AND UNITS. The Committee shall determine the number
of Restricted Shares to be awarded to a Grantee pursuant to the
Restricted Stock Award and the number of Restricted Units to be
awarded to a Grantee pursuant to a Restricted Unit Award.
(b) NONTRANSFERABILITY. Except as set forth in subsections (f) and (g) of
this Section 7, a Grantee may not sell, assign, transfer, pledge,
hypothecate or otherwise dispose of any Restricted Shares or
Restricted Units awarded to said Grantee under this Plan, or any
interest therein, except by will or the laws of descent and
distribution, until the Restricted Period (as defined below) shall
have elapsed. The Committee may also in its discretion impose such
other restrictions and conditions on Restricted Shares and Units
awarded as it deems appropriate including without limitation, the
imposition of provisions that will result in the forfeiture of
Restricted Shares and Units in the event the Grantee breaches
covenants relating to non-competition, confidentiality and
non-solicitation of employees and customers. In determining the
Restricted Period of an award, the Committee may provide that the
restrictions shall lapse with respect to specified percentages of the
awarded shares or units on successive anniversaries of the date of
such award or upon the satisfaction of such other conditions as the
Committee may impose. In no event shall the Restricted Period end with
respect to a Restricted Stock Award or Restricted Unit Award prior to
the satisfaction by the Grantee of any liability arising under Section
8 hereof. Any attempt to dispose of any Restricted Shares in
contravention of any such restrictions shall be null and void and
without effect. The period during which such restrictions on transfer,
and such other restrictions as the Committee may impose, are in effect
is referred to as the "Restricted Period".
(c) CERTIFICATES REPRESENTING RESTRICTED SHARES. The Corporation shall not
be required to issue stock certificates representing Restricted Shares
awarded to a Grantee until the Restricted Period related to such
shares has lapsed. If any stock certificates representing Restricted
Shares awarded pursuant to a Restricted Stock Award are issued prior
to the lapse of the Restricted Period, such stock certificate shall
bear an appropriate legend referring to such restrictions. Such
certificates may be retained by the Corporation during the Restricted
Period.
(d) TERMINATION. If the Grantee's continuous employment or service with
the Corporation or any of its divisions or Subsidiary Corporations
shall terminate for any reason prior to the expiration of the
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Restricted Period applicable to any Restricted Shares or Restricted
Units granted to such Grantee, or prior to the satisfaction of any
other conditions established by the Committee applicable to such
Grant, any such Restricted Shares or Restricted Units then remaining
subject to restrictions (after taking into account the provisions of
subsections (f) and (g) of this Section 7) shall thereupon be
forfeited by the Grantee and any such Restricted Shares shall be
transferred to, and reacquired by, the Corporation or its Subsidiary
Corporation at no cost to the Corporation or the Subsidiary
Corporation. In such event, the Grantee, or in the event of his death,
his personal representative, shall, with respect to any such shares,
forthwith deliver to the Secretary of the Corporation any stock
certificates in the possession of the Grantee or the Grantee's
representative representing the Restricted Shares remaining subject to
such restrictions, accompanied by such instruments of transfer, if
any, as may reasonably be required by the Secretary of the
Corporation.
(e) RIGHTS AS A STOCKHOLDER. Upon receipt by a Grantee of a Restricted
Stock Award, the Grantee shall possess all incidents of ownership of
the Restricted Shares (subject to subsection (b) of this Section 7),
including the right to receive or reinvest dividends with respect to
such shares and to vote such shares.
(f) EFFECT OF CERTAIN CHANGES. The number of Restricted Shares or
Restricted Units subject to a Grant shall be appropriately adjusted by
the Committee in the event of any change in the shares of Common Stock
set forth in Section 6(i)(1). Upon the occurrence of an Acceleration
Event, as defined in Section 6(i)(2), all restrictions then
outstanding with respect to a Restricted Stock Award and Restricted
Unit Award shall automatically expire and be of no further force and
effect.
(g) OTHER PROVISIONS. The Committee shall have the authority (and the
Restricted Award Agreement may so provide) to cancel all or any
portion of any outstanding restrictions and conditions prior to the
expiration of the Restricted Period with respect to all or part of a
Restricted Stock Award or Restricted Unit Award on such terms and
conditions as the Committee may deem appropriate. The Restricted Award
Agreements authorized under this Plan shall contain such other
provisions not inconsistent with the terms hereof as the Committee
shall deem advisable.
8. Withholding Taxes.
When a Grantee or other person becomes entitled to receive shares of
Common Stock pursuant to the exercise of an Option or upon the lapse of
restrictions relating to a Restricted Stock Award, or to receive a cash
payment with respect to a Restricted Unit Award upon the lapse of
restrictions relating thereto, the Corporation shall have the right to
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require the Grantee or such other person to remit to the Corporation an
amount sufficient to satisfy any federal, state and local withholding tax
requirements related thereto. Unless otherwise prohibited by the Committee or
by applicable law, satisfaction of the withholding tax obligation may be
accomplished by any of the following methods or by a combination of such
methods: (a) tendering a cash payment, (b) authorizing the Company to
withhold from the shares of Common Stock or cash otherwise payable (1) one or
more of such shares having an aggregate Fair Market Value, determined as of
the date the withholding tax obligation arises, less than or equal to the
amount of the total withholding tax obligation or (2) cash in an amount less
than or equal to the amount of the total withholding tax obligation and (c)
delivering to the Company shares of Common Stock (provided that such shares
shall have been held for at least six (6) months) having an aggregate Fair
Market Value, determined as of the date the withholding tax obligation
arises, less than or equal to the amount of the total withholding tax
obligation.
9. Term of Plan.
Unless terminated earlier by the Board, the term of this Plan shall be
ten (10) years from the date the Plan was adopted. No Option, Restricted
Stock Award or Restricted Unit Award shall be granted pursuant to this Plan
later than January 29, 2012, but Options and Restricted Stock and Unit Awards
theretofore granted may extend beyond that date in accordance with their
terms.
10. Amendment and Termination of the Plan.
The Board may, at any time and from time to time, suspend, terminate,
modify or amend the Plan. Except as provided in Section 6 hereof, no
suspension, termination, modification or amendment of the Plan may adversely
affect any Grant previously made, unless the written consent of the Grantee
is obtained.
11. Effective Date.
The Plan shall take effect on January 29, 2002, the date of its adoption
by the Board of Directors.
12. Miscellaneous.
(a) Effect of Headings. The section and subsection headings contained
herein are for convenience only and shall not affect the construction
hereof.
(b) Compliance with Legal Requirements. The Plan and the other obligations
of the Corporation under the Plan and any agreement shall be subject
to all applicable federal and state laws, rules and regulations, and
to such approvals by any regulatory or governmental agency as may be
required. The Corporation, in its discretion, may postpone the
issuance or delivery of Common Stock under any Grant as the
Corporation may consider appropriate, and may require any Grantee to
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make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of
Common Stock in compliance with applicable laws, rules and
regulations.
(c) No Right To Continued Employment. Nothing in the Plan or in any
agreement entered into pursuant hereto shall confer upon any Grantee
the right to continue in the employ or service of the Corporation or
any of its divisions or Subsidiary Corporations, to be entitled to any
remuneration or benefits not set forth in the Plan or such agreement
or to interfere with or limit in any way the right of the Corporation
or such division or Subsidiary Corporation to terminate such Grantee's
employment.
(d) Grantee Rights. No Grantee shall have any claim to be made any Grant
under the Plan, and there is no obligation for uniformity of treatment
for Grantees. Except as provided specifically herein, a Grantee or a
transferee of a Grant shall have no rights as a stockholder with
respect to any shares covered by any Grant until the date of the
issuance of a stock certificate for such shares.
(e) Beneficiary. A Grantee may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such
designation. If no designated beneficiary survives the Grantee, the
executor or administrator of the Grantee's estate shall be deemed to
be the Grantee's beneficiary.
13. Governing Law.
The Plan shall be construed and administered in accordance with the laws
of the state of Delaware without regard to its principles of conflicts of law.
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2002 Stock Option and Restricted Stock and Unit Award Plan - AnnTaylor Stores Corp.
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