NYFIX, INC. MODEL NON-QUALIFIED STOCK OPTION AGREEMENT (Senior Executive Version)
NYFIX,
INC.
2007
OMNIBUS EQUITY COMPENSATION PLAN
MODEL
(Senior
Executive Version)
Non-Qualified
Stock Option Agreement (this “Agreement”),
dated
as of __________________, between NYFIX, Inc. (“NYFIX”)
and
_________________ (the “Participant”).
BACKGROUND
Pursuant
to the terms of the NYFIX, Inc. 2007 Omnibus Equity Compensation Plan (the
“Plan”),
and
subject to the approval of the Plan by the stockholders of NYFIX, NYFIX desires
to (i) provide an incentive to the Participant, (ii) encourage the Participant
to contribute materially to the growth of NYFIX and its subsidiaries
(collectively, the “Company”)
and
(iii) more closely align the Participant’s economic interests with those of
NYFIX stockholders by means of a Nonqualified Stock Option Grant. Whenever
capitalized terms are used in this Agreement, they shall have the meanings
set
forth in this Agreement or, if not defined in this Agreement, as set forth
in
the Plan.
The
Plan
allows the Company to provide rewards and incentives to certain employees of
the
Company by, among other things, granting them opportunities to purchase shares
of Stock. The Board or the Committee has determined that it would be in the
best
interest of the Company and its stockholders to grant the Options to the
Participant under the Plan.
In
consideration of the covenants and agreements set forth in this Agreement,
and
intending to be legally bound hereby upon the approval of the Plan by the
stockholders of NYFIX, the Participant and NYFIX hereby agree as
follows:
ARTICLE
1
GRANT
OF OPTIONS
1.1 Grant
of Options.
The
Participant is hereby granted Nonqualified Stock Options representing the right
to purchase _________ shares of Stock subject to the restrictions and conditions
set forth in this Agreement and subject to the approval of the Plan by the
stockholders of NYFIX. References in this Agreement to “Option”
and
“Options”
mean
the options granted hereby, individually and in the aggregate.
1.2 Option
Price.
The
Option Price of the Options is $________ per share, which is the same as the
Fair Market Value of a share of Stock on the Date of Grant.
1.3 Grant
Information.
The
Options have been granted under the Plan. The Board or the Committee authorized
the grant of the Options on ________________.
ARTICLE
2
EXERCISABILITY
OF OPTIONS
All
of
the Options are unvested on the Date of Grant. Options shall vest upon, but
only
upon, the earliest to occur of the events described in Section 2.1, 2.2 or
2.3
and shall become exercisable as described in Section 2.4, in each case subject
to the limitations set forth in Section 2.5. All unvested Options shall be
forfeitable as set forth in Section 2.5 and shall be non-transferable as set
forth in Section 5.2. All shares of Stock issued upon exercise of Options shall
be transferable, although:
(a) transferability
may be subject to pre-clearance, blackout, registration and other requirements
and restrictions under the Company’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and other compliance
policies and procedures; and
(b) transfers
by executive officers should be reviewed in advance to determine if there would
be any potential liability for short-swing profits under Section 16(b) of the
Securities Exchange Act of 1934.
2.1 Time
Vesting.
If not
sooner vested and unless previously forfeited pursuant to Section 2.5, all
of
the Options shall vest based on the passage of time as follows:
(i) 25%
of
the Options shall vest on March 10, 2008; and
(ii) the
remaining 75% of the Options shall vest ratably on the 10th
day of
each month over the next 36 months such that 100% of the Options are vested
on
March 10, 2011.1
If
a
partial Option would vest on any date, the total number of Options vesting
on
such date shall be rounded up to the nearest whole Option.
2.2 Accelerated
and Continued Vesting.
If not
sooner vested and exercisable, and unless previously cancelled pursuant to
Section 2.5 or 4.2,
(i) all
of
the Options shall vest and become immediately exercisable upon a termination
of
the Participant’s employment (a) by the Company without Cause (as defined in
Section 5.1) or (b) by the Participant for Good Reason (as defined in Section
5.1), in either case within one year following a Change in Control;
and
(ii) following
a termination of the Participant’s employment (a) by the Company without Cause
or (b) by the Participant for Good Reason, in either case prior to or more
than
one year following a Change in Control, the Participant’s Options that would
have vested through the month that includes the last day of the period for
which
the Participant receives severance, if any, following such termination (the
“Severance Period”), shall immediately vest.
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This
model reflects the time-based vesting schedule for persons who
were
employees prior to March 10, 2007. For employees hired on or after
March
10, 2007, options vest over a 48-month period as follows: (1) 25%
vest on
the first anniversary of the employee’s start date, and (2) the remaining
75% vest ratably each month over the next 36 months such that 100%
of the
Options are vested on the 48-month anniversary of the start date.
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2.3 Discretionary
Vesting and Exercisability.
The
Committee or the Board may accelerate the vesting of any or all of the Options
at any time and for any reason.
2.4 Exercise;
Restriction on Exercise.
No
unvested Options shall be exercisable. All vested Options shall become
exercisable at the time they first vest and shall cease to be exercisable at
the
time they expire and are forfeited as provided in Section 2.5 or Article
4.
2.5 Effect
of Termination of Employment on Vesting; Expiration of Unvested
Options.
All
unvested Options expire upon the earliest to occur of:
(i) the
time
of notification of the termination of the Participant’s employment by the
Company for Cause;
(ii) termination
of the Participant’s employment for any reason other than Cause or, if later,
the expiration of the Severance Period, if applicable; and
(iii) expiration
as provided in Section 4.1.
2.6 Change
in Control.
Except
as otherwise provided in this Agreement, the effect of a Change in Control
on
the Participant’s Options is subject to Section 17 of the Plan.
ARTICLE
3
EXERCISE
OF OPTIONS
3.1 Person
Who Can Exercise.
Exercisable Options may only be exercised by the Participant, except that,
in
the event of the Disability of the Participant, those Options may be exercised
by the Participant’s legal guardian or legal representative and, in the event of
death, those Options may be exercised by the executor or administrator of the
Participant’s estate or the Person or Persons to whom the Participant’s rights
under those Options pass by will or the laws of descent and
distribution.
3.2 Procedure
for Exercise.
Exercisable Options may be exercised in whole or in part with respect to any
portion thereof that is exercisable. To exercise an exercisable Option, the
Participant (or such other Person who shall be permitted to exercise that Option
as set forth in Section 3.1) must complete, sign and deliver to the Company
an
exercise notice in a form to be provided by the Company together with payment
in
full of the Option Price multiplied by the number of shares of Stock with
respect to which that Option is exercised, in accordance with the option
exercise procedures of the Company as in effect from time to time. The right
to
exercise any Option shall be subject to the satisfaction of all conditions
set
forth in such form of exercise notice. Payment of the Option Price shall be
made
in cash (including check, bank draft or money order). The Participant’s right to
exercise the Option shall be subject to the satisfaction of all conditions
set
forth in such exercise notice.
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3.3 Withholding
of Taxes.
(i) The
Company shall withhold or deduct from any or all payments or amounts due to
or
held for the Participant (or such other Person who may be permitted to exercise
Options as set forth in Section 3.1), whether due from the Company or held
in
the account of the Participant (or such other Person) at any broker facilitating
the exercise of Options, or secure payment from the Participant of, an amount
(the “Withholding
Amount”)
equal
to all taxes (including unemployment (including FUTA), social security and
medical (including FICA), and other governmental charges of any kind as well
as
income and other taxes) required under any applicable law to be withheld or
deducted with respect to any and all taxable income and other amounts
attributable to the Options.
(ii) The
Withholding Amount shall be determined by the Company.
(iii) Immediately
upon request by the Company, the Participant agrees to pay all, or a portion
if
so requested by the Company, of the Withholding Amount to the Company in cash.
(iv) The
timing of withholding or deduction from such payments or amounts shall be
determined by the Company.
ARTICLE
4
EXPIRATION
OF OPTIONS
4.1 Expiration.
Vested
and unvested Options shall expire at 5:00 p.m., Eastern Daylight Time on
______.2
4.2 Earlier
Expiration.
Notwithstanding Section 4.1, unless otherwise determined by the Committee,
Options shall be forfeited and shall expire on the earliest to occur of the
following:
(i) all
unvested Options shall expire as provided in Section 2.5;
(ii) upon
the
Participant’s termination of employment by the Company for Cause, all vested
Options shall expire immediately at the time notice of such termination is
given
(unless otherwise determined by the Company in its sole discretion);
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Insert
a date no later than 10 years following the Date of
Grant.
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(iii) upon
the
Participant’s termination of employment by the Company without Cause or the
Participant’s resignation from employment with the Company other than in
connection with death or Disability, all vested Options shall expire upon the
earlier of (a) the ninetieth day following the date of such termination or
(b)
the expiration of the Options under Section 4.1; and
(iv) upon
the
Participant’s termination of employment due to the Participant’s death or
Disability, all vested Options shall expire upon the earlier of (a) the 12-month
anniversary of the date of such termination or (b) the expiration of the Options
under Section 4.1.
4.3 Cancellation.
Vested
and unvested Options which expire unexercised shall be treated as
cancelled.
4.4 Effective
Date.
For
purposes hereof, except as otherwise set forth in Sections 2.5 and 4.2, the
date
of resignation or termination of employment means the last date of actual
employment, even if a different date is used for administrative convenience
in
connection with employee retirement, benefit or welfare plans.
ARTICLE
5
MISCELLANEOUS
5.1 Definitions.
(i) “Cause” shall
mean that the Company has “cause” to terminate the Participant’s employment or
service, as defined in any existing employment or other agreement between the
Participant and the Company or, in the absence of such an employment or other
agreement, upon the:
(a) gross
neglect or willful misconduct which is or is reasonably expected to be
materially and demonstrably injurious to the Company or its customers or
vendors; material breach by the Participant of his or her confidentiality,
non-competition or non-solicitation obligations owed to the Company; or willful
and continuing refusal or continuing failure (in either case other than due
to
death or Disability) by the Participant to substantially perform his or her
duties or responsibilities for or owed to the Company; or
(b) conviction
of or plea of guilty or no contest by the Participant to a felony or a crime
of
moral turpitude.3
(ii) “Disability”
shall
mean disability as determined by the Committee in accordance with the standards
and procedures similar to those under the Company’s long-term disability plan,
if any. If at any time that the Company does not maintain a long-term disability
plan, “Disability” shall mean any physical or mental disability which is
determined to be total and permanent by a doctor selected in good faith by
the
Committee.
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To
the extent the Participant has a “cause” definition in an agreement, the
agreement should be accurately referenced and this general definition
deleted.
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(iii) “Good
Reason” shall
mean that the Participant has “good reason” to terminate his or her employment,
as defined in any existing employment or other agreement between the Participant
and the Company or, in the absence of such an employment or other agreement,
upon the occurrence of any of the following events without the Participant’s
prior written consent: (a) a material reduction in the Participant’s base salary
or annual bonus incentive; (b) the assignment of duties materially inconsistent
with the Participant’s position or a material reduction in the Participant's
responsibilities or authority (in each case in this clause b), so long as notice
that Good Reason has occurred is given by the Participant to the Company within
6 months (or such longer period as the Company may allow) after such occurrence
and further provided the Company has not cured the circumstances giving rise
to
the Good Reason within 10 days of receipt of such notice); or (c) the
requirement that the Participant relocate his or her principal place of
employment to a location more than 50 miles from the Participant’s current
location.4
5.2 Options
Not Transferable.
Options
may not be transferred (other than by will or laws of descent and distribution).
Any attempt to effect a transfer of Options that is not permitted by the Plan
or
this Agreement shall be null and void.
5.3 Code
Section 409A.
The
parties recognize that certain provisions of this Agreement may be affected
by
Code Section 409A and agree to negotiate in good faith to amend this Agreement
with respect to any changes necessary or advisable to comply with Code Section
409A.
5.4 Code
Section 162(m).
The
Options were granted in a manner intended to meet the requirements of “qualified
performance based compensation” under Code Section 162(m), including the
requirement that the stockholders of NYFIX approve of the Grant before it can
be
effective.
5.5 Notices.
All
notices, requests and demands to or upon the parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or three days after being deposited in the mail, postage prepaid,
or,
in the case of telecopy or email notice, when received, addressed as follows
to
the Company and the Participant, or to such other address as may be hereafter
notified by the parties hereto:
(i) If
to the
Company, to it at the following address:
NYFIX,
Inc.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
General Counsel
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To
the extent the Participant has a “good reason” definition in an agreement,
the agreement should be accurately referenced and this general
definition
deleted.
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(ii) If
to the
Participant, to his or her most recent primary residential address or business
telecopy or email address as shown on the records of the Company.
5.6 No
Right To Continued Employment.
The
Participant acknowledges and agrees that, notwithstanding the fact that the
vesting of the Options is contingent upon his or her continued employment by
the
Company, this Agreement does not constitute an express or implied promise of
continued employment or confer upon the Participant any rights with respect
to
continued employment by the Company.
5.7 Amendments
and Conflicting Agreements.
This
Agreement may be amended by a written instrument executed by the parties which
specifically states that it is amending this Agreement or by a written
instrument executed by the Company which so states if such amendment is not
adverse to the Participant or relates to administrative matters.
5.8 Governing
Law and Interpretation.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of Delaware applicable to contracts made and to be performed
therein without regard to the conflicts of law principles thereof. Whenever
the
word “including” is used herein, it shall be deemed to be followed by the phrase
“without limitation.” Unless otherwise specified herein, all determinations,
consents, elections and other decisions by the Committee may be made, withheld
or delayed in its sole and absolute discretion.
5.9 Titles.
Titles
are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
5.10 Counterparts.
This
Agreement may be executed in counterparts, which together shall constitute
one
and the same instrument and which will be deemed effective whether received
in
original form or by telecopy or other electronic means. Facsimile signatures
shall be as effective as original signatures.
5.11 Construction.
The
construction of this Agreement is vested in the Committee, and the Committee’s
construction shall be final and conclusive on all Persons.
5.12 Effective
Date of Agreement.
This
Agreement is effective as of the date the stockholders of NYFIX approve the
Plan.
*
*
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IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be executed by a duly authorized
officer.
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NYFIX,
INC.
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By:___________________________________
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Name:_________________________________
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PARTICIPANT’S
ACCEPTANCE
The
Participant acknowledges that he or she has read this Agreement, has received
and read the Plan, and understands the terms and conditions of this Agreement
and the Plan and hereby accepts the foregoing Options and agrees to be bound
by
the terms and conditions of this Agreement and the Plan.
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PARTICIPANT
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Signed
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