Exhibit 99.2
Xxxxx'x Corporation
Stock Option Award Agreement
Dear Participant:
Congratulations on your selection as a participant in the Denny's stock option
program. You have been granted the right to purchase from Denny's Corporation
(the "Company") shares of its common stock, $.01 par value, pursuant to the
provisions of the Xxxxx'x Corporation 2004 Omnibus Incentive Plan ("the Plan")
and to the terms and conditions set forth in this Agreement.
Terms used in this Agreement that are defined in the Plan shall have the initial
letter of the word capitalized and shall have the meanings ascribed to them in
the Plan. If there is any inconsistency between the terms of this Agreement and
the terms of the Plan, the Plan's terms shall supersede and replace the
conflicting terms of this Agreement.
The options granted to you under this Agreement are nonqualified stock options.
Overview of Your Stock Option
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1. Number of Options Granted: ___________
2. Date of Grant: ___________
3. Exercise Price: ___________
4. Option Term: The Options have been granted for a period of ten (10) years
from the Date of Grant (the "Option Term").
5. Vesting and Exercise: Options do not provide you with any rights or interests
until they vest and become exercisable. Unless vesting is accelerated in
accordance with the Plan or in the discretion of the Committee, the Options
shall vest subject to the conditions set forth in Section 6 as shown below:
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Percentage of Date on Which percentage of Option
Option That Vests, Assuming You Remain Employed
Vests On The Applicable Date
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6. Conditions to Vesting: The following conditions must be satisfied for the
Options to vest and become exercisable in accordance with Section 5 above:
(a) The Options have been designated as Qualified Performance-Based
Award(s) and as such will vest and become exercisable in
accordance with Section 5 only if the Company achieves an increase
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in same store sales (on a percentage basis) for the Fourth Quarter
of the 2004 fiscal year; and
(b) A participant must receive a performance rating of a "1" or a "2"
on either his/her 2004 mid-year employee performance evaluation or
his 2004 year-end employee performance evaluation for his/her
Options to vest and become exercisable in accordance with Section
5.
7. How to Exercise: The Options hereby granted shall be exercised by
(1) contacting the Company's Stock Option Coordinator (currently, Xxxxx Land) at
(864/597-8671), (2) submitting a written notice (in the form required by the
Company on the date of exercise) specifying the number of shares you then desire
to purchase. Unless the exercise is a broker-assisted "cashless exercise" as
described below, such written notice must be accompanied by full payment in
cash, shares of stock of the Company previously acquired by you (which shares
may be delivered by attestation or actual delivery of one or more certificates),
or any combination thereof, for the applicable Exercise Price, plus any
applicable tax withholding amount; provided, however, that if shares of stock
are used for this purpose, such shares must have been held by you for at least
such period of time, if any, as necessary to avoid the recognition of an expense
under generally accepted accounting principles as a result of the exercise of
the Options. The fair market value of the surrendered shares of stock as of the
last trading day immediately prior to the exercise date shall be used in valuing
and shares used in payment of the Option Price or applicable tax withholding
amounts. To the extent permitted under Regulation T of the Federal Reserve
Board, and subject to applicable securities laws and at the discretion of
Compensation and Incentives Committee of the Board of Directors of the Company,
the Option may be exercised through a broker in a so-called "cashless exercise"
whereby the broker sells the Option shares and delivers cash sales proceeds to
the Company in payment of the Exercise Price. In such case, the date of exercise
shall be deemed to be the date on which notice of exercise is received by the
Company and the exercise price shall be delivered to the Company on the
settlement date.)
Notwithstanding the above, the Company has the authority and the right to deduct
or withhold an amount sufficient to satisfy federal, state, and local taxes
(including any FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of the exercise of the Option. Such
withholding requirement may be satisfied, in whole or in part, at the election
of the Company, by withholding Option shares having a fair market value on the
date of withholding equal to the minimum amount (and not any greater amount)
required to be withheld for tax purposes, all in accordance with such procedures
as the Committee establishes.
As soon as practicable after receipt of such written notification and payment
and satisfaction of applicable tax withholding requirements, the Company shall
issue or transfer to you, when applicable, the number of Shares with respect to
which such Options shall be so exercised and shall deliver to you either a
certificate or certificates for such shares or evidence of book entry of such
Shares registered in your name.
8. Impact of Termination of Employment: The vesting and term of your options
will change if you terminate employment during the Option Term, according to the
following table (but in no event shall the term of an Option be extended beyond
the original Option Term:
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Employment Event Impact of Exercise Period for Vested
Termination Options ollowing Termination
on Vesting (After Which the Options Shall
Lapse)
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lEAVE OF ABSENCE < 90 DAYS Continue Vesting No change
Death Vest fully 1 year
Disability 1 Continue vesting 1 year
until lapse
Retirement 2 Continue vesting 1 year
until lapse
Voluntary resignation Vesting stops 60 days
Involuntary termination other than for Vesting stops 60 days
Cause3
Involuntary termination for Cause3 Vesting stops None. Must exercise prior to
termination
Involuntary termination within 24 months Vest fully 5 years
of a Change in Control4
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1 Disability means any physical or mental condition which would
qualify a Participant for a disability benefit under the long-term
disability plan maintained by the Company and applicable to that
particular Participant.
2 Retirement means the voluntary termination of employment from the
Company or an Affiliate for any reason other than a leave of absence,
death or disability on or after attainment of the age of fifty-five.
3 Cause as a reason for a Participant's termination of employment
shall have the meaning assigned such term in the employment agreement, if
any, between such Participant and the Company or an Affiliate, provided,
however that if there is no such employment agreement in which such term
is defined, and unless otherwise defined in the applicable Award
Certificate, "Cause" shall mean any of the following acts by the
Participant, as determined by the Board: gross neglect of duty, prolonged
absence from duty without the consent of the Company, intentionally
engaging in any activity that is in conflict with or adverse to the
business or other interests of the Company, or willful misconduct,
misfeasance or malfeasance of duty which is reasonably determined to be
detrimental to the Company.
4 Please see the definition of Change in Control in the Plan.
9. Restrictions on Transfer and Pledge: No right or interest in the Options may
be pledged, encumbered, or hypothecated to or in favor of any party other than
the Company, or shall be subject to any lien, obligation, or liability to any
other party other than the Company. The Options are not assignable or
transferable by you other than by will or the laws of descent and distribution
or pursuant to a domestic relations order that would satisfy Section
414(p)(1)(A) of the Code if such Section applied to an Option under the Plan;
provided, however, that the Committee may (but need not) permit other transfers.
The Options may be exercised during your lifetime only by you or any permitted
transferee.
10. Beneficiary Designation: You may, in the manner determined by the Committee,
designate a beneficiary to exercise your rights hereunder and to receive any
distribution with respect to the Options upon your death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights hereunder is
subject to all terms and conditions of this Agreement and the Plan, and to any
additional restrictions deemed necessary or appropriate by the Committee. If no
beneficiary has been designated or survives you, the Options may be exercised by
the legal representative of your estate, and payment shall be made to your
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estate. Subject to the foregoing, a beneficiary designation may be changed or
revoked by you at any time provided the change or revocation is filed with the
Company.
11. Limitation of Rights: The Options do not confer to you any rights of a
shareholder of the Company unless and until Shares are in fact issued in
connection with the exercise of the Options. Nothing in this Agreement shall
interfere with or limit in any way the right of the Company to terminate your
service at any time, nor confer upon you any right to continue in the service of
the Company.
12. Covenants: Without the prior written consent of the Company, which may be
granted or withheld in the Company's sole and absolute discretion, during the
term of your employment with the Company, and for a period of twelve (12)
calendar months thereafter, you hereby agree that you shall not, directly or
indirectly:
(a) Disclosure of Information. Use, attempt to use, disclose, or otherwise
make known to any person (other than in the course of employment with the
Company or any Subsidiaries or Affiliate thereof) any knowledge or information
of a confidential or proprietary nature (including all unpublished matters)
relating to, without limitation, the business, strategy, plans, properties,
accounting, books and records, trade secrets, or memoranda of the Company or its
Affiliates.
(b) Solicitation. Whether for your own account or for the account of any
other Person, solicit, employ, or retain (or arrange to have any other Person to
solicit, employ, or retain) or otherwise participate in the employment or
retention of any individual who is or has been within one (1) year an employee
or consultant of the Company or any of its Subsidiaries.
13. Requirements of Law: The granting of Options and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
14. Restrictions on Issuance of Shares: If at any time the Committee shall
determine in its discretion, that registration, listing or qualification of the
Shares covered by the Options upon any Exchange or under any foreign, federal,
or local law or practice, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to the exercise of the
Options, the Options may not be exercised in whole or in part unless and until
such registration, listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
15. Applicable Laws and Consent to Jurisdiction: The validity, construction,
interpretation, and enforceability of this Agreement shall be determined and
governed by the laws of the state of Delaware without giving effect to the
principles of conflicts of law. For the purpose of litigating any dispute that
arises under this Agreement, the parties hereby consent to exclusive
jurisdiction and agree that such litigation shall be conducted in the federal or
state courts of the state of Delaware, county of New Castle.
16. Successors: This Agreement shall be binding upon any successor of the
Company, in accordance with the terms of this Agreement and the Plan.
17. Plan Controls: The terms contained in the Plan are incorporated into and
made a part of this Agreement and this Agreement shall be governed by and
construed in accordance with the Plan. In the event of any actual or alleged
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conflict between the provisions of the Plan and the provisions of this
Agreement, the provisions of the Plan shall be controlling and determinative.
18. Severability: If any one or more of the provision contained in the Agreement
is invalid, illegal or unenforceable, the other provision of this Agreement will
be construed and enforced as if the invalid, illegal or unenforceable provision
had never been included.
19. Notice: Notices and communications under this Agreement must be in writing
and either personally delivered or sent by registered or certified United States
mail, return receipt requested, postage prepaid. Notices to the Company must be
addressed to:
Xxxxx'x Corporation
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0001
Attn: Secretary
or any other address designated by the Company in a written notice to you.
Notices to you will be directed to your address then currently on file with the
Company, or at any other address given by you in a written notice to the
Company.
Please refer any questions you may have regarding your stock options to the
Stock Option Coordinator (currently, Xxxxx Xxxx) of the Legal Department at
(864/597-8671). Once again, congratulations on receipt of your stock option.
Sincerely,
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Please acknowledge your agreement to participate in the Plan and this Agreement,
and to abide by all of the governing terms and provisions, by signing the
following representation:
Agreement to Participate
By signing a copy of this Agreement and returning it to the Stock Option
Coordinator of the Legal Department of Denny's Corporation. I acknowledge that I
have read the Plan, and that I fully understand all of my rights under the Plan,
as well as all of the terms and conditions which may limit my eligibility to
exercise this Option.
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Participant
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