EXHIBIT 99.2
FORM OF OPTION ASSUMPTION AGREEMENT
XXXXX.XXX, INC.
STOCK OPTION ASSUMPTION AGREEMENT
[TARGET]
__________ STOCK PLAN
Optionee: <> <>,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the ______ day of
_______________, _______ by Xxxxx.xxx, Inc., a __________ corporation
("Xxxxx.xxx").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of [Target], a
__________ corporation ("[Target]"), which were granted to Optionee under the
[Target] __________ Stock Plan (the "Plan") and are each evidenced by a Stock
Option Agreement (the "Option Agreement").
WHEREAS, [Target] has been acquired by Xxxxx.xxx through the merger
of [Target] with and into Xxxxx.xxx (the "Merger") pursuant to the Agreement and
Plan of Reorganization, by and between Xxxxx.xxx and [Target] (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require Xxxxx.xxx to
assume all obligations of [Target] under all outstanding options under the Plan
at the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is ______________
shares of Xxxxx.xxx common stock ("Xxxxx.xxx Stock") for each outstanding share
of [Target] common stock ("[Target] Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by Xxxxx.xxx in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of [Target] Stock subject to the options
held by Optionee immediately prior to the Effective Time (the "[Target]
Options") and the exercise price payable per share are set forth below.
Xxxxx.xxx hereby assumes, as of the Effective Time, all the duties and
obligations of [Target] under each of the [Target] Options. In connection with
such assumption, the number of shares of Xxxxx.xxx Stock purchasable under each
[Target] Option hereby assumed and the exercise price payable thereunder have
been adjusted to reflect the Exchange Ratio. Accordingly, the number of shares
of Xxxxx.xxx Stock subject to each [Target] Option hereby assumed shall be as
specified for that option below, and the adjusted
exercise price payable per share of Xxxxx.xxx Stock under the assumed [Target]
Option shall also be as indicated for that option below.
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[TARGET] STOCK OPTIONS XXXXX.XXX ASSUMED OPTIONS
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# of Shares of Exercise Price # of Shares of Adjusted
[Target] Common per Share Xxxxx.xxx Common Exercise Price
Stock Stock per Share
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<<[Target]_Shares>> $<<[Target]_Price>> <> $<>
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2. The intent of the foregoing adjustments to each assumed [Target]
Option is to assure that the spread between the aggregate fair market value of
the shares of Xxxxx.xxx Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be not less than the spread
which existed, immediately prior to the Merger, between the then aggregate fair
market value of the [Target] Stock subject to the [Target] Option and the
aggregate exercise price in effect at such time under the Option Agreement. Such
adjustments are also intended to preserve, immediately after the Merger, on a
per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the [Target] Option immediately prior
to the Merger.
3. The following provisions shall govern each [Target] Option hereby
assumed by Xxxxx.xxx:
(a) Unless the context otherwise requires, all
references in each Option Agreement and, if applicable, in the Plan
(as incorporated into such Option Agreement) (i) to the "Company"
shall mean Xxxxx.xxx, (ii) to "Share" shall mean share of Xxxxx.xxx
Stock, (iii) to the "Board" shall mean the Board of Directors of
Xxxxx.xxx and (iv) to the "Committee" shall mean the Compensation
Committee of the Xxxxx.xxx Board of Directors.
(b) The grant date and the expiration date of each
assumed [Target] Option and all other provisions which govern either
the exercise or the termination of the assumed [Target] Option shall
remain the same as set forth in the Option Agreement applicable to
that option, and the provisions of the Option Agreement shall
accordingly govern and control Optionee's rights under this
Agreement to purchase Xxxxx.xxx Stock.
(c) Your options assumed by Xxxxx.xxx which were
originally designated on your Notice of Grant as Incentive Options
shall remain Incentive Stock Options to the maximum extent allowed
by law.
(d) Pursuant to the terms of the Option Agreement, none
of your options assumed by Xxxxx.xxx in connection with the
transaction will vest and become exercisable on an accelerated basis
upon the consummation of the
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Merger. Each [Target] Option shall be assumed by Xxxxx.xxx as of the
Effective Time. Each such assumed [Target] Option shall thereafter
continue to vest for any remaining unvested shares of Xxxxx.xxx
Stock subject to that option in accordance with the same installment
vesting schedule in effect under the applicable Option Agreement
immediately prior to the Effective Time; provided, however, that the
number of shares subject to each such installment shall be adjusted
to reflect the Exchange Ratio.
(e) For purposes of applying any and all provisions of
the Option Agreement and/or the Plan relating to Optionee's status
as an employee or a consultant of [Target], Optionee shall be deemed
to continue in such status as an employee or a consultant for so
long as Optionee renders services as an employee or a consultant to
Xxxxx.xxx or any present or future Xxxxx.xxx subsidiary.
Accordingly, the provisions of the Option Agreement governing the
termination of the assumed [Target] Options upon Optionee's
cessation of service as an employee or a consultant of [Target]
shall hereafter be applied on the basis of Optionee's cessation of
employee or consultant status with Xxxxx.xxx and its subsidiaries,
and each assumed [Target] Option shall accordingly terminate, within
the designated time period in effect under the Option Agreement for
that option, generally a three (3) month period, following such
cessation of service as an employee or a consultant of Xxxxx.xxx and
its subsidiaries.
(f) The adjusted exercise price payable for the
Xxxxx.xxx Stock subject to each assumed [Target] Option shall be
payable in any of the forms authorized under the Option Agreement
applicable to that option. For purposes of determining the holding
period of any shares of Xxxxx.xxx Stock delivered in payment of such
adjusted exercise price, the period for which such shares were held
as [Target] Stock prior to the Merger shall be taken into account.
(g) In order to exercise each assumed [Target] Option,
Optionee must deliver to Xxxxx.xxx a written notice of exercise in
which the number of shares of Xxxxx.xxx Stock to be purchased
thereunder must be indicated. The exercise notice must be
accompanied by payment of the adjusted exercise price payable for
the purchased shares of Xxxxx.xxx Stock and should be delivered to
Xxxxx.xxx at the following address:
Xxxxx.xxx, Inc.
_________________________
_________________________
Attention: Stock Administration
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately prior to the Merger shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.
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IN WITNESS WHEREOF, Xxxxx.xxx, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the _______ day of ______________, 2000.
XXXXX.XXX, INC.
By:
_____________________________
Corporate Secretary
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her [Target] Options hereby assumed by Xxxxx.xxx are
as set forth in the Option Agreement, the Plan, as applicable, and such Stock
Option Assumption Agreement.
_____________________________________________
<> <>, OPTIONEE
DATED: __________________, ________
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