EXHIBIT 99.2
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FORM OF
STOCK OPTION AGREEMENT FOR ANNUAL STOCK OPTIONS
UNDER
THE XXXXX XXXXXX COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN (THE "PLAN")
This STOCK OPTION AGREEMENT provides for the granting of Stock
Options ("Options") by The Xxxxx Xxxxxx Companies Inc., a Delaware corporation
(the "Company"), to the participant, a Non-Employee Director of the Company (a
"Non-Employee Director"), to purchase shares of the Company's Class A Common
Stock, par value $0.01 (the "Shares"), on the terms and subject to the
conditions hereinafter provided. The Stock Options described herein are being
granted pursuant to Section 6(a) of the Company's Non-Employee Director Share
Incentive Plan, as may be amended or restated from time to time (the "Plan"),
and are subject in all respects to the provisions of the Plan. The Stock Options
granted hereunder are not Incentive Stock Options (as defined in Section 422(b)
of the Internal Revenue Code of 1986, as amended (the "Code")). This Stock
Option Agreement incorporates and is subject to all terms, conditions,
limitations and restrictions contained in the Plan, which shall be controlling
in the event of any conflicting or inconsistent provisions. Capitalized terms
not defined herein shall have the meanings ascribed thereto in the Plan.
The name of the "Non-Employee Director", the "Grant Date", the aggregate number
of Shares that may be purchased pursuant to this agreement, and the "Exercise
Price" per Share are stated in the attached "Notice of Grant", and incorporated
herein by reference. The other terms and conditions of the Options are stated in
this agreement and in the Plan.
1. PAYMENT OF EXERCISE PRICE. The Company will provide and communicate
to the Non-Employee Director various methods of exercise. These methods may
include the ability to receive Shares of Class A Common Stock of the Company or
cash at exercise. To facilitate exercise, the Company may enter into agreements
for coordinated procedures with one or more brokerage firms or financial
institutions.
2. EXERCISE PERIOD.
(i). General. Each Stock Option granted to a Non-Employee
Director hereunder shall become exercisable beginning on the first anniversary
of the date of grant provided that the Non-Employee Director continues to serve
as a director of the Company on such anniversary date; provided, however, any
such Stock Option granted to a Non-Employee Director shall become immediately
exercisable in the event of (A) a Change in Control of the Company or (B) the
death of the Non-Employee Director. Each Stock Option shall terminate on the
tenth anniversary of the date of grant unless terminated earlier pursuant to the
Plan. If a Non-Employee Director ceases to serve as a director of the Company
for any reason other than as a result of a Change in Control or his or her
death, each Stock Option granted to such person less than one year prior to
cessation of service shall immediately terminate and become null and void upon
such cessation of service.
(ii). Termination of Directorship. If a Non-Employee Director
ceases to serve as a director of the Company, any exercisable outstanding Stock
Option previously granted to such Non-Employee Director shall, to the extent not
theretofore exercised, remain exercisable at any time up to and including a date
that is five years after the date of such cessation of service, at which time
such Stock Option shall terminate and become null and void; provided, however,
that no Stock Option shall be exercisable later than ten years after the date of
grant; and provided, further, however, if the service of a Non-Employee Director
ceases by reason other than (A) death, (B) disability (as described in Section
22(e)(3) of the Code), (C) voluntary retirement from service as a director of
the Company, or (D) the failure of the Company to nominate for re-election such
Non-Employee Director who is otherwise eligible, unless such failure to nominate
for re-election is due to any act of (1) fraud or intentional misrepresentation
or (2) embezzlement, misappropriation or conversion of assets or opportunities
of the Company or any subsidiary, in which case such Stock Option shall
immediately terminate and become null and void.
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3. POST-DIRECTORSHIP EXERCISES. The exercise of any Stock Option after
a Non-Employee Director ceases to serve as a director shall be subject to
satisfaction of the conditions precedent that the former Non-Employee Director
neither (i) competes with, or takes employment with or renders services as a
director or in any other capacity to a competitor of, the Company, its
subsidiaries or affiliates without the written consent of the Company, nor (ii)
conducts himself or herself in a manner adversely affecting the Company. If a
Stock Option shall be exercised by the legal or personal representative of a
deceased Non-Employee Director or former Non-Employee Director, or by a person
who acquired a Stock Option granted hereunder by bequest or inheritance or by
reason of the death of any Non-Employee Director or former Non-Employee
Director, written notice of such exercise shall be accompanied by a certified
copy of letters testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Stock Option.
4. WITHHOLDING. All payments or distributions made hereunder of Shares
covered by Stock Options shall be net of any amounts required to be withheld
pursuant to applicable federal, national, state and local tax withholding
requirements imposed by each taxing authority having jurisdiction. The Company
may require the Non-Employee Director to remit to it an amount sufficient to
satisfy such tax withholding requirements prior to the delivery of any
certificates for such Shares. The Company may, in its discretion and subject to
such rules as it may adopt (including any as may be required to satisfy
applicable tax and/or non-tax regulatory requirements), permit the Non-Employee
Director pay the minimum amount of the federal, national, state and local
withholding taxes arising in connection with any Stock Option by electing to
have the Company withhold Shares of Class A Common Stock having a Market Value
equal to the amount to be withheld.
5. NONTRANSFERABILITY. The Stock Options granted hereby are not
transferable except by will or the laws of descent and distribution.
Notwithstanding the preceding sentence, the Stock Options granted hereby may be
transferred by the Non-Employee Director for no consideration, upon ten business
days prior written notice to the Company, solely to the Non-Employee Director's
spouse, siblings, parents, children and/or grandchildren, or to trusts for the
benefit of such persons, or to partnerships, corporations, limited liability
companies or other entities owned solely by such persons, including trusts for
such persons, subject to all restrictions included in this Stock Option
Agreement and subject to the Non-Employee Director and permitted transferee
executing an agreement of transfer satisfactory to the Board in its sole
discretion.
6. TENURE. A Non-Employee Director's right, if any, to continue to
serve as a director of the Company or any of its subsidiaries or affiliates
shall not be enlarged or otherwise affected by his or her designation as a
participant under this Plan.
7. NOTICES. Any notice required or permitted under this Stock Option
Agreement shall be deemed to have been duly given if delivered, telecopied or
mailed, certified or registered mail, return receipt requested (a) to the
Non-Employee Director at such address as the Company shall maintain for the
Non-Employee Director and (b) to the Company's General Counsel or Secretary at
the Company's principal executive office.
8. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to
enforce at any time any provision of this Stock Option Agreement shall in no
manner be construed to be a waiver of such provision or of any other provision
hereof.
9. GOVERNING LAW. The Stock Option Agreement shall be governed by and
construed according to the laws of the State of New York, applicable to
agreements made and performed in that state.
10. PARTIAL INVALIDITY. The invalidity or illegality of any provision
herein shall not be deemed to affect the validity of any other provision.
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The Xxxxx Xxxxxx Companies Inc.
By:________________________
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NOTICE OF GRANT FOR ANNUAL STOCK OPTIONS
UNDER
THE XXXXX XXXXXX COMPANIES INC.
NON-EMPLOYEE DIRECTOR SHARE INCENTIVE PLAN (THE "PLAN")
This is to confirm that you were awarded options to purchase shares of Class A
Common Stock of The Xxxxx Xxxxxx Companies Inc. (the "Shares") in accordance
with the Plan. These options are granted under and governed by the terms and
conditions of the Plan and the Stock Option Agreement (the "Agreement") attached
hereto and made part hereof. A Summary Plan Description is also attached. Please
read these documents and keep them for future reference. The specific terms of
your award are as follows:
Non-Employee Director:
SSN or Tax ID: XXX-XX-
Grant Date:
Type of Award: NON-QUALIFIED STOCK OPTIONS
Exercise Price per Share: $
Aggregate number of Shares subject to your options:
Exercise Period: YOUR OPTIONS SHALL BECOME EXERCISABLE ON THE FOLLOWING DATES
(OR IN THE EVENT OF A "CHANGE IN CONTROL" OF THE COMPANY OR UPON DEATH,
DISABILITY, IF THESE OCCURRENCES ARE EARLIER), BUT ARE SUBJECT TO TERMINATION OR
FORFEITURE AS PER THE AGREEMENT:
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NUMBER OF SHARES DATE EXERCISABLE EXPIRATION DATE
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Questions regarding the stock option program can be directed to ______________
(____) _________ or _____________ at (___) ____-______. If you wish to accept
this grant, PLEASE SIGN THIS NOTICE AND RETURN WITHIN THE NEXT TWO WEEKS TO:
Compensation Department
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
The undersigned hereby accepts, and agrees to, all terms and provisions of the
Agreement, including those contained in this Notice of Grant.
By_________________________ Date__________
Enclosures:
Stock Option Agreement
Summary Plan Description
