EXHIBIT 99.2
STOCK OPTION AGREEMENT
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
STOCK OPTION AGREEMENT, made as of the 1st day of May, 2000
between ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Financial Services, Inc. ("RPM") and [Name] (the
"Participant"), residing at ________________________.
W I T N E S S E T H:
RPM hereby grants to the Participant as of May 1, 2000 (the
"Award Date") options to purchase ________ shares of RPM's common stock, $.10
par value per share ("Common Stock"), at an exercise price of $1,350 (the
"Exercise Price") per share (the "Options"), subject to the following terms and
conditions:
1. TAX STATUS OF OPTIONS. It is intended that the Options
awarded hereunder shall not constitute an "incentive stock option" as defined in
Section 422 of the Internal Revenue Code.
2. "VESTING. Options are not exercisable until vested. Options
shall vest in accordance with the following schedule:
Anniversary of Participant is vested in:
Award Date -------------------------
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1st 20% of the Options
2nd 40% of the Options
3rd 60% of the Options
4th 80% of the Options
5th 100% of the Options;
provided, however, that upon (i) the death or Disability (as hereinafter
defined) of Participant or (ii) the consummation of any transaction described in
Section 5 (so that Participant can exercise the Options), all of the Options
shall become fully vested. Upon the termination of Participant's employment with
RPM and its subsidiaries and affiliates (collectively, the "Company") for any
reason other than his death, all Options which have not vested on or before the
date of such termination shall be forfeited and cancelled. If the Participant is
employed by a subsidiary or affiliate of RPM, the Participant shall be deemed to
have ceased employment with such subsidiary or affiliate at such time as RPM
owns, either directly or indirectly, less than 50% of the total combined voting
power of all classes of stock of such subsidiary or affiliate."
3. EXERCISE OF OPTIONS. (a) Except as otherwise provided in
paragraph 5(a), vested Options must be exercised on or prior to 5:00 p.m. New
York, New York time on the earliest to occur of the following dates (the
"Expiration Date"):
(i) The 90th day following the date of the Participant's
death; or
(ii) The 30th day following the date of the termination of
Participant's employment with the Company for any
other reason.
Any vested Options not exercised on or prior to such earliest date shall be
forfeited and cancelled.
(b) The Options shall be exercised by giving written notice
of exercise in the form of Appendix I hereto, which notice shall be accompanied
by payment to RPM, in immediately available funds, of the Exercise Price for the
number of shares of Common Stock specified in such notice.
(c) Upon giving such notice and making such payment, RPM
shall promptly issue to the Participant the shares of Common Stock to which the
Participant is entitled hereunder.
(d) If the Options should be exercised in part only, RPM
shall, upon surrender of this Agreement, simultaneously execute and deliver a
new Agreement evidencing the rights of the Participant to purchase the balance
of the shares of Common Stock purchasable hereunder. Upon proper exercise of the
Options (including payment), the Participant shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of RPM shall then be closed or
that certificates representing such shares of Common Stock shall not then be
actually delivered to the Participant. RPM shall pay all expenses, and any and
all United States federal, state and local stock transfer taxes that may be
payable in connection with the preparation, issue and delivery of stock
certificates in the name of the Participant.
(e) Anything herein to the contrary notwithstanding, no
exercise of the Options may be made with respect to fewer than the lesser of (i)
100 shares of Common Stock or (ii) all remaining shares of Common Stock subject
to the Participant's Options.
(f) The Options may not be transferred other than by will
or by the laws of descent and distribution, and during the Participant's
lifetime the Options may be exercised only by him. If the Participant dies prior
to the Expiration Date, the Options may be exercised by his executor or
administrator, or by the person or persons to whom the Options are transferred
by will or the applicable laws of descent and distribution, in accordance with
subparagraph (a) of this paragraph 3. If the Options are exercised by the
executor or administrator of the Participant, or by the person or persons to
whom the Options have been transferred by the Participant's will or the
applicable laws of descent and distribution, RPM shall be under no obligation to
deliver stock pursuant to such exercise until RPM is satisfied as to the
authority of the person or persons exercising the Options.
4. PUT AND CALL RIGHTS. (a) RPM shall have the right, at any
time and for any reason, to purchase all or any portion (in multiples of Options
to purchase 100 shares of Common Stock) of a Participant's vested Options (a
"call"), and a Participant shall have the right, at any time and for any reason,
to require RPM to purchase all or any portion (in multiples of Options to
purchase 100 shares of Common Stock) of a Participant's vested Options (a
"put"), upon thirty (30) days prior written notice to the Participant or RPM, as
the case may be, at a purchase price equal to the difference between the
Exercise Price and the book value per share of Common Stock, determined in
accordance with the provisions of Section 8 of Article FIFTH of the Restated
Certificate of Incorporation of RPM. The net book value per share of Common
Stock shall be determined as of the close of the regular monthly accounting
period next preceding the date on which the Participant or RPM exercised his or
its put or call, as the case may be, and shall be determined in good faith by
RPM's Board of Directors, which determination shall be binding upon the
Participant.
(b) With respect to an election by RPM to exercise its
right to call any of Participant's Options pursuant to subparagraph (a) of this
paragraph 4, RPM shall mail by first class registered or certified mail to the
last known address of the Participant a written notice advising of the
Corporation's election to exercise its right to call such Options, stating (i)
the number of Options to be purchased, (ii) the purchase price to be paid and
the net book value of the shares subject to such Options, (iii) the type of
payment (cash or evidence of indebtedness or both), and (iv) the date upon which
payment of the purchase price will be made at the principal place of business of
RPM (the "date of purchase"), which date shall not be more than six months
following the date on which RPM mailed such notice. Participant shall deliver
this Agreement to RPM representing such shares on the date specified in such
notice against payment therefor, and shall acknowledge in writing that the
Options being purchased are cancelled.
(c) With respect to an election by the Participant to
exercise his right to require RPM to purchase any of his Options pursuant to
subparagraph (a) of this paragraph 4, RPM shall mail by first class registered
or certified mail to the Participant, not later than one hundred twenty days
following the date on which RPM receives a notice from the Participant, given
pursuant to subparagraph (a) of this paragraph 4, a written notice stating (i)
the purchase price to be paid and the net book value of the shares subject to
such Options, (ii) the type of payment (cash or evidence of indebtedness or
both), and (iii) the date upon which payment of the purchase price will be made
at the principal place of business of RPM (the "date of purchase"), which date
shall not be more than six months following the date on which RPM received
written notice from the Participant pursuant to subparagraph (a) of this
paragraph 4. The Participant shall deliver this Agreement to RPM on the date of
purchase specified in such notice against payment therefore and shall
acknowledge in writing that the Options being purchased are cancelled.
(d) The purchase price for Options purchased pursuant to
this paragraph 4 shall be paid entirely in cash or partly in cash and partly in
evidences of indebtedness of RPM, in such proportions as RPM may determine;
provided that the cash paid by RPM on the date of purchase shall not be less
than 20% of the purchase price. Indebtedness of RPM included in the purchase
price shall bear interest, payable at the end of each calendar quarter, at an
annual rate not less than one percent over the prime rate then (date of
purchase) printed in the Wall Street Journal, with the maximum interest payable
being at the rate of 10 percent per annum (unless a higher rate of interest
shall be required to avoid imputed interest to the holder of such indebtedness
under Internal Revenue Code Section 483 or Section 1274, in which case such
indebtedness shall bear interest at such higher rate of interest). Such
indebtedness shall provide for payment of principal in four equal annual
installments commencing one year after the date of purchase. RPM shall have the
right, at its option, to prepay the principal of any or all of such
indebtedness, in part or in full at any time, in multiples of Five Hundred
Dollars ($500.00) without premium or penalty. Any such prepayment shall be
accompanied by the interest accrued on the principal amount so prepaid through
the date of prepayment. Such indebtedness may be subordinated, in RPM's
discretion, to other debt of RPM then extant or thereafter incurred.
(e) RPM shall have all rights granted to it under paragraph
10 of this Agreement with respect to any purchase of Options under subparagraph
(a) of this paragraph 4.
(f) Upon failure of the Participant on the date of purchase
to accept payment of the purchase price and acknowledge that the Options being
purchased are cancelled, RPM may cause the purchase price to be paid for such
Options to be deposited with any bank in the City, County and State of New York
with aggregate capital and surplus of not less than
$100,000,000, for a period of six months, to be paid to the Participant by such
bank upon execution of such written acknowledgment. Upon such a deposit of the
purchase price, RPM shall give written notice thereof to the Participant by
mailing the notice by first class registered or certified mail to his last known
address, and upon the mailing of the notice the Participant shall have no
further rights with respect to such Options. If the Participant does not deliver
such written acknowledgement as aforesaid prior to the expiration of said
six-month period, he shall be deemed to have irrevocably consented to the
cancellation of such Options. The purchase price so deposited shall be
transferred to RPM and thereafter the Participant shall look only to RPM for
payment of the purchase price.
5. MERGERS; CONSOLIDATIONS. (a) In the event that (i) the
Board of Directors of RPM proposes to (A) consolidate with or merge into any
Person (as hereinafter defined) and RPM shall not be the continuing or surviving
corporation of such consolidation or merger, (B) permit any Person to merge into
RPM and RPM shall be the continuing or surviving corporation, but, in connection
with such merger, the then outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property or the then outstanding shares of Common Stock shall after
such merger represent less than 50% of the outstanding shares and share
equivalents of the continuing or surviving corporation, or (C) sell or otherwise
transfer all or substantially all of RPM's assets to any Person, then, in each
such event, the Board of Directors shall give written notice of the recommended
or proposed transaction to the Participant not less than 30 days prior to the
anticipated effective date of the recommended or proposed transaction. At any
time prior to a date specified in such notice, which shall not be more than 10
days prior to the anticipated effective date of the recommended or proposed
transaction, the Participant, if he wishes to exercise part or all of his vested
Options, may condition such exercise upon, and provide that such exercise shall
become effective at the time of but immediately prior to, the consummation of
the transaction, and the Participant shall make payment of the Exercise Price
for the shares of Common Stock to be purchased on the date of the Participant's
notice of conditional exercise. If the recommended or proposed transaction is
consummated, the Options, to the extent not exercised prior to the date
specified in RPM's notice, shall terminate on the effective date of such
consummation (which shall thereupon be deemed to be the "Expiration Date" of the
Options for purposes of this Agreement). If the recommended or proposed
transaction is abandoned, the shares of Common Stock with respect to which the
Options are conditionally exercised but which are not purchased shall continue
to be available for purchase in accordance with this Agreement, and any payment
made with the notice of conditional exercise shall be promptly refunded to the
Participant by RPM.
(b) A "Person" shall mean any individual, firm, corporation
or other entity and includes as well any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Securities Exchange Act of 1934.
6. LEGEND; PURCHASE FOR INVESTMENT. The Participant covenants
that he is taking the Options and will be purchasing the shares of Common Stock
for investment and not with a view towards the distribution thereof, that such
Options and/or shares will not be transferred, to the extent permitted
hereunder, except in compliance with applicable federal and state securities law
and that all shares of Common Stock issued hereunder will bear a restrictive
legend with respect thereto, the content of which shall be substantially as
follows:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT
REGISTRATION UNDER OR OTHER COMPLIANCE WITH THAT ACT AND THOSE
LAWS AND THE RULES AND REGULATIONS ADOPTED THEREUNDER. THE
SHARES ARE SUBJECT TO REPURCHASE BY THE COMPANY PURSUANT TO
THE RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY."
7. CERTAIN ADJUSTMENTS. In the event of a recapitalization,
stock split, stock dividend, combination, exchange of shares, merger,
consolidation, rights offering, separation, reorganization, liquidation or other
change in the corporate structure of RPM, the number and kind of shares of
Common Stock subject to the Options and/or the Exercise Price of the Options
shall be adjusted as may be appropriate and equitable in order to protect the
Participant against dilution.
8. RIGHTS AS A STOCKHOLDER. Until the shares of Common Stock
are issued to the Participant upon exercise of the Options in accordance with
this Agreement, the Participant shall have no rights of a stockholder of RPM
including, but not limited to, the right to receive dividends or vote with
respect to the shares.
9. REPRESENTATIONS AND WARRANTIES OF RPM. RPM hereby
represents and warrants to the Participant that it has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, including the issuance of shares of Common
Stock upon the exercise of the Options and that the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
have been duly and validly authorized by RPM.
10. WITHHOLDING TAXES. In order to enable RPM to meet any
applicable federal, state or local withholding tax requirements arising as a
result of the exercise of any of the Options, RPM shall have the right to (i)
make deductions from any payment of any kind otherwise due the Participant,
including the delivery or vesting of shares of capital stock, or require shares
of Common Stock to be withheld from the exercise of any of the Options, in each
case in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law attributable to the exercise of any of the Options,
or (ii) take such other action as may be necessary or appropriate to satisfy any
such withholding obligations.
11. GOVERNMENT REGULATIONS. Notwithstanding anything contained
herein to the contrary, RPM's obligation to issue and deliver certificates
evidencing shares of Common Stock upon the exercise of any of the Options 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.
12. EMPLOYMENT. The grant of the Options hereunder and/or the
existence of this Agreement shall not affect the Company's right to discharge a
Participant or constitute an agreement of employment between the Participant and
the Company.
13. GOVERNING LAW. This Agreement shall be interpreted and
construed in accordance with the laws of the State of New York, without regard
to its conflicts of laws rules or principles.
14. NOTICES. Any notice or other communication required or
permitted under, or given by reason of, this Agreement shall be in writing and
shall be deemed to have been duly given when delivered in person or when mailed,
by certified mail, postage prepaid, addressed as follows (or to such other
address as the party may specify by notice pursuant to this provision, except
that notices of change of address shall be effective only upon receipt);
(a) To the Company:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Financial Services, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(b) To the Executive:
[Name]
[Address]
15. BINDING EFFECT; SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, assigns, heirs, executors
and representatives.
(b) This Agreement may not be modified, amended or changed
except in writing executed by the parties hereto.
16. NO WAIVER. No course of dealing and no delay on the part
of any party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies. No single or partial exercise of any rights, powers
or remedies conferred by this Agreement shall preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed as of the day and year first hereinabove written.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ FINANCIAL SERVICES, INC.
By:
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
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Name
Appendix I
NOTICE OF EXERCISE OF OPTION
TO: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Financial Services, Inc. Dated:______________
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
The undersigned, pursuant to the provisions set forth in the
attached Agreement, hereby exercises its right to purchase ________ shares of
Common Stock of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Financial Services, Inc., pursuant to the
terms and provisions of such Agreement, and is hereby making payment herewith in
full therefor at the price per share provided by such Agreement.
Signature
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Address
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