Exhibit 10-K(b)
STOCK INCENTIVE AGREEMENT
COLGATE-PALMOLIVE COMPANY
NON-QUALIFIED STOCK OPTION
Dated: November 7, 1997
Mr. Xxxxxx Xxxx
Colgate-Palmolive Company
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Mr. Xxxx:
This will confirm the following Agreement made as of the above date
between you and the Colgate-Palmolive Company (the "Company") pursuant to the
Company's 1997 Stock Option Plan, as amended (the "Plan"). If you have not
received copies of the Plan and the Plan Prospectus, they are available from the
Company at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xx. Xxxxxx X. Xxxxxx,
Senior Vice President, General Counsel and Secretary.
The Company hereby grants you non-qualified options (the "Options") to
purchase from the Company a total of two million, six hundred thousand
(2,600,000) shares of common stock of the Company in the amounts, at the
exercise prices and on the other terms and conditions set forth below.
The Options will vest and become exercisable on the dates and in the
amounts set forth below at the following prices:
Number
of Shares Exercise Price
Tranche Optioned Per Share Vesting Schedule
------- --------- -------------- -----------------------
1 260,000 10% above FMV 50% immediately
50% on November 7, 1998
2 260,000 20% above FMV 50% immediately
50% on November 7, 1999
3 260,000 30% above FMV 50% immediately
50% on November 7, 2000
Number
of Shares Exercise Price
Tranche Optioned Per Share Vesting Schedule
------- --------- -------------- -----------------------
4 260,000 40% above FMV 50% immediately
50% on November 7, 2001
5 260,000 50% above FMV 50% immediately
50% on November 7, 2002
6 1,300,000 70% above FMV 50% immediately
50% on November 7, 2002
For the purposes of the above table, Fair Market Value ("FMV") means
the FMV on November 7, 1997, which equaled $62 3/8 per share of common stock.
The Options shall expire at 11:59 p.m. (Eastern Standard Time) on
November 6, 2007, except as otherwise provided for herein or, if not so
provided, in accordance with the Plan.
To encourage you further to promote the growth of the Company and,
consequently, more rapid growth in the value of the common stock of the Company,
the Options may expire prior to November 6, 2007 on either of the following
dates:
(a) If the closing price per share of common stock of the Company
shall not have equaled or exceeded $93.5625 (the "50% Hurdle") at
least once prior to November 7, 2002, then the term of the
Options, to the extent then unexercised, shall automatically
expire at 12:01 a.m. (Eastern Standard Time) on November 7, 2002,
without any further action on your part or the part of the
Company.
(b) If the closing price per share of common stock of the Company
shall not have equaled or exceeded $106.0375 (the "70% Hurdle")
at least once prior to November 7, 2004, then the term of the
Options, to the extent then unexercised, shall automatically
expire at 12:01 a.m. (Eastern Standard Time) on November 7, 2004,
without any further action on your part or the part of the
Company.
For the purpose of determining the 50% Hurdle and the 70% Hurdle, closing price
shall mean the daily closing price, as reported by the New York Stock Exchange
Composite Transactions or other reporting system acceptable to the Personnel and
Organization Committee of the Board of Directors of the Company.
Furthermore, in accordance with the determination of the Committee, as
permitted under Paragraphs (f), (g) and (h) of Section 5 of the Plan, and
anything in those Paragraphs to the contrary notwithstanding, (a) if your
employment with the Company and its affiliates shall be involuntarily
terminated, including without limitation involuntary retirement, death or
Disability, the Options shall continue to vest and be exercisable in
accordance with the provisions of this Agreement for the term provided for
above; and (b) if you voluntarily terminate your employment with or voluntarily
retire from the Company and its affiliates, only those Options which had vested
on or prior to the date of such termination or retirement shall continue to be
exercisable in accordance with the provisions of this Agreement and such
exercisable Options shall continue to be exercisable for the term provided for
above.
In the event of any stock split, recapitalization or any other event
referred to in the last paragraph of Section 3 of the Plan, (a) the number and
kind of shares and the exercise price per share subject to the Options shall be
subject to adjustment as provided in the Plan, and (b) the Committee shall make
an appropriate adjustment to the 50% Hurdle and the 70% Hurdle to reflect the
effect of such transaction on the market price of the common stock of the
Company.
This Agreement and the Options are subject to all the terms,
conditions, limitations and restrictions contained in the Plan, except as
expressly provided for herein, and may not be assigned or transferred in whole
or in part except as therein provided. For example, the Options may be
transferred, in whole or in part, under guidelines approved by the Personnel and
Organization Committee in accordance with the Plan, to immediate family members,
or trusts, partnerships or other legal entities set up for the benefit of
immediate family members. All terms which are not defined herein, but which are
defined in the Plan, shall have the meanings attributed to them in the Plan.
You shall not have any of the rights of a shareholder with respect to any of the
shares which are the subject of this Agreement until such shares are actually
issued to you.
To confirm the foregoing, kindly sign and return one copy of this
Agreement as soon as possible.
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By: _____________________________
Xxxx X. Xxxxxx, Chair
Personnel and Organization
Committee
CONFIRMED:
________________________________ By: _____________________________
Xxxxxx X. Xxxxxx
Senior Vice President, General
Counsel and Secretary
