XXXX XXXX XxXXXXX FINANCIAL SERVICES, INC.
00 XXXXX XXXXXX, 0XX XXXXX
XXX XXXX, XXX XXXX 00000
____________, 2001
[Option Holder]
Dear ___________:
Pursuant to Section 2.7(e) of the Agreement and Plan of Merger between
XxXxxxxxx & Co Inc. ("XxXxxxxxx") and XXXX XXXX XxXXXXX Financial Services, Inc.
("RPM"), dated as of January 18, 2001 (the "Merger Agreement"), the outstanding
and unexercised options to purchase shares of RPM Common Stock which you hold
immediately prior to the Effective Time of the Merger (the "RPM Options") shall,
subject to your consent set forth below, be assumed by XxXxxxxxx and shall be
converted at the Effective Time into options to purchase shares of XxXxxxxxx
Common Stock in accordance with the Merger Agreement and the terms set forth
herein (the "XxXxxxxxx Options"). Capitalized terms which are used but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Merger Agreement.
In general, the terms and conditions of the XxXxxxxxx Options shall
continue to be governed by the option agreement (as the same may have been
previously amended) evidencing your RPM Options (the "Option Agreement").
However, the following terms shall apply to your XxXxxxxxx Options and shall
amend and replace any inconsistent terms in the Option Agreement:
1. The XxXxxxxxx Options shall be 100% vested and fully exercisable
immediately following the Effective Time.
2. The XxXxxxxxx Options shall expire at 5:00 p.m. New York, New
York time on the earlier to occur of the following dates: (a) the
90th day following the date of your death, or (b) the 30th day
following the date of the termination of your employment with
XxXxxxxxx and its Subsidiaries for any other reason; provided
that if you (or, in the case of (a), your representatives) are
not permitted to exercise the XxXxxxxxx Options or sell the
underlying securities during such period on account of any
restriction imposed under any company policy of XxXxxxxxx or any
other
restriction imposed on you by XxXxxxxxx, such period shall be
automatically extended by the number of days you were not
permitted to exercise the XxXxxxxxx Options or sell the
underlying securities because of such restriction.
3. The aggregate exercise price of the XxXxxxxxx Options, which
remains the same as that of the RPM Options, may be paid in one
or more of the following forms: (i) cash, (ii) bank or certified
check made payable to XxXxxxxxx, (iii) while the XxXxxxxxx Common
Stock is publicly traded, through a cashless exercise procedure
established and maintained by XxXxxxxxx in accordance with
Regulation T of the Federal Reserve Board and other applicable
law pursuant to which you shall concurrently provide irrevocable
written instructions to: (a) a brokerage firm designated by
XxXxxxxxx to effect the immediate sale of shares of XxXxxxxxx
Common Stock and to remit to XxXxxxxxx, out of the sales proceeds
available on the settlement date, sufficient funds to cover the
aggregate price payable for the portion of the XxXxxxxxx Options
being exercised, plus all applicable federal, state and local
income and employment taxes required to be withheld by XxXxxxxxx
by reason of such exercise, and (b) XxXxxxxxx to deliver directly
to such brokerage firm the certificates for the shares of
XxXxxxxxx Common Stock necessary to complete such sale, and (iv)
pursuant to such other forms as may be permitted by XxXxxxxxx
from time to time.
4. The XxXxxxxxx Options shall not be subject to the put or call
rights applicable to the RPM Options.
5. If XxXxxxxxx requires that shares of XxXxxxxxx Common Stock be
withheld from the exercise of your XxXxxxxxx Options in order to
satisfy applicable federal, state and local withholding tax
requirements, such withholding shall be at a rate that does not
exceed the statutory minimum rate.
6. Upon the effectiveness of a registration statement on Form S-8
with respect to the XxXxxxxxx Common Stock underlying the
XxXxxxxxx Options and during the period of effectiveness of such
registration statement, Section 6 of the Option Agreement shall
not apply.
7. After the Closing, all references to RPM in the Option Agreement
shall be deemed references to XxXxxxxxx (or any successor or
assign thereof).
8. Section 5 of the Option Agreement shall not apply. In the event
of a merger, consolidation, mandatory share exchange or other
similar business combination of XxXxxxxxx with or into any other
entity (a "Successor Entity") or any transaction in which another
person or entity acquires all the issued and outstanding
XxXxxxxxx
Common Stock, or all or substantially all the assets of
XxXxxxxxx, the XxXxxxxxx Options shall be assumed or an
equivalent option shall be substituted by the Successor Entity or
a parent or subsidiary of the Successor Entity.
After the consummation of the Merger, XxXxxxxxx shall send you a
written notice setting forth the number of shares of XxXxxxxxx Common Stock
subject to your XxXxxxxxx Options.
Please indicate your consent to the assumption and conversion of your
RPM Options into XxXxxxxxx Options pursuant to the Merger Agreement and your
agreement to the terms of this letter by countersigning in the space provided
below.
XXXX XXXX XxXXXXX FINANCIAL SERVICES, INC.
By: ______________________________________
Name:
Title:
ACCEPTED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
_____________________________
