Exhibit 99.2
Form of Notice of Grant and Option Agreement.
INITIAL GRANT
THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF OPTION
Notice is hereby given of the following option (the "Option") to
purchase depositary units of The Newhall Land and Farming Company (a
California Limited Partnership) (the "Partnership") which has been
granted pursuant to the Partnership's 1995 Option/Award Plan (the
"Plan"):
OPTIONEE: ________________________________________________
GRANT DATE: ______________________________________________
NUMBER OF OPTIONED DEPOSITARY UNITS: _____________________
GRANT NUMBER: ____________________________________________
EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________
EXPIRATION DATE: _________________________________________
TYPE OF OPTION: ___ Incentive Option
___ Non-Statutory Option
TANDEM OPTION/APPRECIATION RIGHT: ___ Yes
___ No
EXERCISE SCHEDULE: The Option shall become exercisable in
four equal and successive annual installments for twenty-five percent
(25%) of the Optioned Depositary Units upon Optionee's completion of
each year of Service (as defined in the attached Option Agreement
dated _______________________________) measured from the Grant Date.
In no event shall the Option become exercisable for any additional
Optioned Depositary Units following Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms and conditions of the Plan.
Optionee further agrees to be bound by the terms and conditions of
the Option as set forth in the Option Agreement dated
________________________, attached hereto as Exhibit A. Optionee
should keep a copy of the attached Agreement for reference, since no
new Agreement will be distributed with subsequent Notices of Grant
unless the material provisions of the Plan or Agreement change.
1.
SUBSEQUENT GRANT
THE NEWHALL LAND AND FARMING COMPANY
NOTICE OF GRANT OF OPTION
Notice is hereby given of the following option (the "Option") to
purchase depositary units of The Newhall Land and Farming Company (a
California Limited Partnership) (the "Partnership") which has been
granted pursuant to the Partnership's 1995 Option/Award Plan (the
"Plan"):
OPTIONEE: ________________________________________________
GRANT DATE: ______________________________________________
NUMBER OF OPTIONED DEPOSITARY UNITS: _____________________
EXERCISE PRICE PER DEPOSITARY UNIT: $_____________________
EXPIRATION DATE: _________________________________________
TYPE OF OPTION: ___ Incentive Option
___ Non-Statutory Option
TANDEM OPTION/APPRECIATION RIGHT: ___ Yes
___ No
EXERCISE SCHEDULE: The Option shall become exercisable in
four equal and successive annual installments for twenty-five percent
(25%) of the Optioned Depositary Units upon Optionee's completion of
each year of Service (as defined in the Option Agreement dated
______________________) measured from the Grant Date. In no event
shall the Option become exercisable for any additional Optioned
Depositary Units following Optionee's cessation of Service.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the express terms and conditions of the Plan.
Optionee further agrees to be bound by the terms and conditions of
the Option as set forth in the Option Agreement dated
______________________, distributed with the Initial Notice of Grant.
1.
Dated: _______________, _____
THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)
By: _____________________________________
Title: __________________________________
__________________________________________
OPTIONEE
Address: _________________________________
___________________________________________
I designate the following beneficiary(ies):
____________________________________ Relationship: _________________
Address: ___________________________________________________________
___________________________________________________________
2.
EXHIBIT A
THE NEWHALL LAND AND FARMING COMPANY
OPTION AGREEMENT
DATED: _____________________________
A. The Newhall Land and Farming Company ("Partnership") has
implemented The Newhall Land and Farming Company 1995 Option/Award
Plan (the "Plan") for the purpose of attracting and retaining the
services of key employees (including officers) of the Partnership and
any affiliated entities thereof, and non-employee Board members of
the managing general partner of the Partnership, and its managing
general partner.
B. Optionee is an individual who is to render valuable services to
the Partnership or one or more affiliated entities thereof, and this
Agreement is executed pursuant to, and is intended to carry out the
purposes of, the Plan in connection with the Partnership's grant of
an option to Optionee.
C. All capitalized terms shall have the meaning as those terms are
defined in the Plan unless otherwise indicated. "Fair Market Value"
shall have the meaning assigned to that term in Section 2.9 of the
Plan.
1. GRANT OF OPTION. Subject to and upon the terms and
conditions set forth in this Agreement, the Partnership hereby grants
to Optionee, as of the grant date (the "Grant Date") specified in the
accompanying Notice of Grant of Option (the "Grant Notice"), an
option to purchase up to that number of the Partnership's depositary
units as is specified in the Grant Notice. Such depositary units
shall be purchasable from the Partnership from time to time during
the option term at the option price (the "Exercise Price") specified
in the Grant Notice.
2. TANDEM OPTION/APPRECIATION RIGHTS. The Grant Notice may
reflect that the option is granted in tandem with an appreciation
right, which means that either the option or the appreciation right
may be exercised, but not both. If this option is granted in tandem
with an appreciation right, you will also receive a Notice of Grant
of Appreciation Right and an Appreciation Right Agreement.
3. OPTION TERM. This option shall expire at the close of
business on the expiration date (the "Expiration Date") specified in
the Grant Notice, unless sooner terminated in accordance with
Paragraph 6, 9 or 10.
4. LIMITED TRANSFERABILITY. This option shall be exercisable
only by Optionee during Optionee's lifetime and shall not be
transferable or assignable by Optionee other than by will
1.
or by the laws of descent and distribution following Optionee's
death. However, Optionee may designate a beneficiary who may
exercise the option or receive compensation under the option after
Optionee's death.
5. DATES OF EXERCISE. This option shall become exercisable
for the depositary units in accordance with the Exercise Schedule
specified in the Grant Notice. The option shall remain exercisable
for the accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 6. In no event shall
this option become exercisable for any additional depositary units
following Optionee's cessation of Service.
6. CESSATION OF SERVICE. The option term specified in
Paragraph 3 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the
following provisions:
a. This option shall immediately terminate and cease to
be outstanding for any depositary units for which it is not
exercisable at the time of Optionee's cessation of Service.
b. Should Optionee cease Service for any reason other
than death or retirement while this option is outstanding, then this
option shall be exercisable for all of the depositary units for which
this option is exercisable at the time of such cessation of Service.
Such right shall lapse, and this option shall terminate and cease to
remain outstanding, upon the earlier of (i) the expiration of the
three (3)-month period measured from the date of Optionee's cessation
of Service, or (ii) the Expiration Date.
c. Should Optionee die while this option is outstanding,
or within three (3) months after Optionee ceases Service, then
Optionee's designated beneficiary, or, if no beneficiary has been
designated, Optionee's estate or heirs shall have the right to
exercise the option for any or all of the depositary units for which
this option is exercisable at the time of Optionee's death. Such
right shall lapse, and this option shall terminate and cease to
remain outstanding, upon the earlier of (i) the expiration of the
twelve (12)-month period measured from the date of Optionee's death,
or (ii) the Expiration Date.
d. Should Optionee retire while this option is
outstanding, then this option shall be exercisable for all of the
depositary units for which this option is exercisable at the time of
such "retirement." Such right shall lapse, and this option shall
terminate and cease to remain outstanding, upon the earlier of (i)
the expiration of the thirty-six (36)-month period measured from the
date of Optionee's retirement, or (ii) the Expiration Date. For
purposes of this Paragraph 5, "retirement"
2.
shall mean the Optionee's cessation of Service on or after either of
the following:
(i) the first day of the month coinciding with or
next following Optionee's sixty-fifth (65) birthday.
(ii) the first day of a calendar month after meeting
the age and service requirements for early retirement, which are:
Optionee's years of service for the Partnership or an affiliated
entity meet or exceed ten (10) years of service, and Optionee has
attained age 55.
e. Should (i) Optionee's Service be terminated for
misconduct (including, but not limited to, any act of dishonesty,
willful misconduct, fraud or embezzlement) or (ii) Optionee make any
unauthorized use or disclosure of confidential information or trade
secrets of the Partnership or any parent or subsidiary, then in any
such event this option shall terminate immediately and cease to be
outstanding.
f. For purposes of this Agreement, the following
definitional provisions shall be in effect:
(i) Optionee shall be deemed to remain in SERVICE for
so long as such individual renders services on a periodic basis to
the Partnership (or any subsidiary or other affiliated entity) in the
capacity of an employee or a non-employee member of the Board.
(ii) An entity shall be considered to be a SUBSIDIARY
of the Partnership if it is a member of an unbroken chain of entities
beginning with the Partnership, provided each such entity in the
chain (other than the last entity) owns, at the time of
determination, securities possessing fifty percent (50%) or more of
the total combined voting power of all classes of securities in one
of the other entities in such chain.
(iii) An entity shall be considered to be a PARENT
of the Partnership if it is a member of an unbroken chain ending with
the Partnership, provided each such entity in the chain (other than
the Partnership) owns, at the time of determination, securities
possessing fifty percent (50%) or more of the total combined voting
power of all classes of securities in one of the other entities in
such chain.
7. ADJUSTMENT IN DEPOSITARY UNITS.
a. If any change is made to the depositary units issuable
under the Plan (whether by reason of merger, consolidation,
reorganization, recapitalization, depositary unit distribution,
depositary unit split, combination of depositary units, exchange of
depositary units, or other change in partnership or capital structure
of the Partnership), or if the
3.
Partnership makes a distribution to holders of depositary units which
results from the sale or disposition of a major asset or separate
operating division of the Partnership, which would materially dilute
the rights of option holders', then the Committee shall make
appropriate adjustments to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class of
securities and price per depositary unit in effect under each
outstanding option under the Plan and (iii) the maximum number of
depositary units issuable to one individual pursuant to Paragraph
1.3.D of the Plan. The purpose of these adjustments will be to
preclude the enlargement or dilution of rights and benefits under the
options.
b. If any change is made to the depositary units issuable
under the Plan by reason of a Structural Transaction or a Change in
Control that does not result in the termination of all outstanding
options, the Committee may adjust the maximum number of depositary
units issuable under the Plan, the number of depositary units subject
to options, and the option price, as provided in Paragraph 1.3.C of
the plan.
8. ACCELERATION OF OPTIONS. In the event of a Structural
Transaction or Change in Control, each option will be automatically
accelerated so that each option at the time outstanding under the
Plan and not then otherwise fully exercisable shall become fully
exercisable for up to the total number of depositary units
purchasable or issuable thereunder and may be exercised for all or
any portion of the depositary units for which the option is so
accelerated.
9. NO ACCELERATION OF OPTIONS. In no event shall any such
acceleration or termination of repurchase rights in connection with
a Structural Transaction occur if and to the extent (i) such option
is, in connection with the Structural Transaction, either to be
assumed by the successor entity or affiliate thereof or to be
replaced with a comparable option to purchase or receive securities
of the successor entity or affiliate thereof, (ii) such option is to
be replaced with a cash incentive program of the successor entity
which preserves the depositary unit spread existing at the time of
the Structural Transaction and provides for subsequent payout in
accordance with the same vesting schedule applicable to such option,
or (iii) the acceleration of such option is subject to other
limitations imposed by the Committee at the time of the option grant.
The determination of option comparability under clause (i) above
shall be made by the Committee and its determination shall be final,
binding and conclusive. Upon consummation of a Structural
Transaction, all outstanding options under the Plan shall, to the
extent not previously exercised or paid in full or assumed by the
successor entity or an affiliate, terminate.
10. CANCELLATION OF OPTIONS. Notwithstanding the above, in the
event of any Structural Transaction, the Committee shall have
4.
the discretion to cancel outstanding options in whole or in part,
subject to such conditions as the Committee may determine, upon
payment to optionees with respect to each cancelled option, an amount
in cash not less than the difference between (i) the Fair Market
Value (at the effective date of such Structural Transaction) of the
consideration the optionee would have received if the option had been
exercised immediately prior to the effective date of such Structural
Transaction and (ii) the exercise price of such option.
11. PARTNERSHIP STRUCTURE. The grant of options under the Plan
shall in no way affect the Partnership's right to adjust, reclassify,
reorganize, or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate, or sell or transfer any
part of its business or assets.
12. PRIVILEGE OF UNITHOLDER RIGHTS. The holder of this option
shall not have any of the rights of a unitholder with respect to the
depositary units until such individual shall have exercised the
option and paid the Exercise Price for the purchased depositary
units.
13. WITHHOLDING. The Committee administering the Plan may
require or permit, in its discretion and upon such terms and
conditions as it may deem appropriate (including the applicable
safe-harbor provisions of Rule 16b-3) Grantee to elect to have the
Partnership withhold, from the depositary units otherwise issuable
pursuant to such option, one or more of such depositary units with an
aggregate Fair Market Value equal to the Federal, state and local
employment and income taxes ("Taxes") incurred in connection with the
acquisition of such depositary units. Grantee may also be granted
the right to deliver previously acquired depositary units held for
the requisite period to avoid a charge to earnings in satisfaction of
such Taxes. The withheld or delivered depositary units will be
valued at Fair Market Value on the applicable determination date for
such Taxes.
14. MANNER OF EXERCISING OPTION. In order to exercise this
option with respect to all or any part of the depositary units for
which this option is at the time exercisable, Optionee (or in the
case of exercise after Optionee's death, Optionee's designated
beneficiary, executor, administrator, heir or legatee, as the case
may be) must take the following actions:
a. Deliver to the Secretary of the Partnership an
executed notice of exercise in substantially the form of Exhibit I to
this Agreement (the "Exercise Notice") in which there is specified
the number of depositary units which are to be purchased under the
exercised option.
b. Pay the aggregate Exercise Price for the purchased
depositary units through one or more of the following alternatives:
5.
(i) in cash or cash equivalents made payable to the
Partnership;
(ii) in depositary units valued at their Fair Market
Value as of the Exercise Date (defined below) and held for the
requisite period in order to avoid a charge to earnings (currently
six (6) months, but subject to change);
(iii) through a sale and remittance procedure
under which the optionee delivers a properly executed exercise notice
together with irrevocable instructions to a broker to promptly
deliver to the Partnership the amount of sale proceeds to pay the
option price; or
(iv) such other lawful consideration as the Committee
shall determine.
For purposes of clause (ii) immediately above, the
"Exercise Date" is the date on which written notice of the exercise
of the option is delivered to the Partnership. In all other cases,
the Exercise Date is the date on which written notice and actual
payment is received by the Partnership.
Except to the extent the sale and remittance procedure
specified above is utilized in connection with the option exercise,
payment of the Exercise Price for the purchased depositary units must
accompany the Exercise Notice.
Furnish to the Partnership appropriate documentation that
the person or persons exercising the option (if other than Optionee)
have the right to exercise this option.
As soon as practical after receipt of the Exercise Notice,
the Partnership shall mail or deliver to or on behalf of Optionee (or
any other person or persons exercising this option in accordance
herewith) a depositary receipt representing the purchased depositary
units.
In no event may this option be exercised for any fractional
depositary units.
15. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of California.
16. COUNTERPARTS. The Grant Notice may be executed in
counterparts each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
17. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
option and the issuance of depositary units upon such exercise shall
be subject to compliance by the Partnership and
6.
Optionee with all applicable requirements of law relating thereto and
with all applicable regulations of any stock exchange on which the
Partnership's depositary units may be listed at the time of such
exercise and issuance.
18. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 4, the provisions of this Agreement shall inure
to the benefit of, and be binding upon, the designated beneficiaries,
successors, administrators, heirs and legal representatives of
Optionee and the successors and assigns of the Partnership.
19. LIABILITY OF PARTNERSHIP. The inability of the Partnership
to obtain approval from any regulatory body having authority deemed
by the Partnership to be necessary to the lawful issuance and sale of
any depositary units pursuant to this option shall relieve the
Partnership of any liability with respect to the non-issuance or sale
of the depositary units as to which such approval shall not have been
obtained. The Partnership shall, however, use its best efforts to
obtain all such approvals.
20. NO EMPLOYMENT/SERVICE CONTRACT. Nothing in this Agreement
or in the Plan shall confer upon Optionee any right to continue in
the Service of the Partnership (or any subsidiary or other affiliated
entity employing or retaining Optionee) for any period of specific
duration or interfere with or otherwise restrict in any way the
rights of the Partnership (or any affiliated entity) or Optionee,
which rights are hereby expressly reserved by each party, to
terminate Optionee's Service at any time for any reason whatsoever,
with or without cause.
21. NOTICES. Any notice required to be given or delivered to
the Partnership under the terms of this Agreement shall be in writing
and addressed to the Partnership in care of the Corporate Secretary
at Newhall Management Corporation, 23823 Valencia Boulevard,
Valencia, CA 91355. Any notice required to be given or delivered to
Optionee shall be in writing and addressed to Optionee at the address
indicated on the Grant Notice. All notices shall be deemed to have
been given or delivered upon personal delivery or upon deposit in the
U.S. mail, by registered or certified mail, postage prepaid and
properly addressed to the party to be notified.
22. CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all
respects limited by and subject to the express terms and provisions
of the Plan. All decisions of the Committee with respect to any
question or issue arising under the Plan or this Agreement shall be
conclusive and binding on all persons having an interest in this
option.
23. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the
event this option is designated an incentive option in the
7.
Grant Notice, the following terms and conditions shall also apply to
the grant:
a. This option shall cease to qualify for favorable tax
treatment as an incentive option under the Federal tax laws if (and
to the extent) this option is exercised for one or more depositary
units: (i) more than three (3) months after the date Optionee ceases
to be an Employee for any reason other than death or (ii) more than
one (1) year after the date Optionee ceases to be an Employee by
reason of death.
b. To the extent that the aggregate Fair Market Value of
depositary units (determined as of the date or dates of grant)
covered by options under the Plan (or any other plan of the
Partnership or any parent or subsidiary or predecessor thereof) which
were granted as Incentive Options, are exercisable for the first time
by Optionee during any calendar year, exceeds the sum of $100,000 (or
such greater amount as may be permitted under the Code), whether by
reason of acceleration or otherwise, such options shall lose their
Incentive Option designation and shall be "nonstatutory" options.
Such options shall be taken into account in the order in which they
were granted.
c. To the extent this option should fail to qualify as an
incentive option under the Federal tax laws, Optionee will recognize
compensation income in connection with the acquisition of one or more
depositary unit hereunder, and Optionee must make appropriate
arrangement for the satisfaction of all Federal, state and local
income and employment tax withholding requirements applicable to such
compensation income.
24. ADDITIONAL TERMS APPLICABLE TO A NONSTATUTORY OPTION. In
the event this option is designated a nonstatutory option in the
Grant Notice, Optionee shall make appropriate arrangements with the
Partnership or any parent, subsidiary or affiliated entity employing
Optionee for the satisfaction of all Federal, state or local income
and employment tax withholding requirements applicable to the
exercise of this option.
25. CANCELLATION AND NEW GRANT OF AWARDS. The Committee shall
have the authority to effect, at any time and from time to time, with
the consent of the affected Optionees, the cancellation of any or all
outstanding options and to grant in substitution therefor new options
under the Plan covering the same or different number and class of
depositary units having a price per depositary unit not less than the
Fair Market Value on the new grant date.
8.
EXHIBIT I
NOTICE OF EXERCISE OF OPTION
I hereby notify The Newhall Land and Farming Company (the
"Partnership") that I elect to purchase ______________________
depositary units of the Partnership (the "Purchased Depositary
Units") at the option exercise price of $__________________ per
depositary unit (the "Exercise Price") pursuant to that certain
option (the "Option") granted to me under the Partnership's 1995
Option/Award Plan on _____________________________.
Concurrently with the delivery of this Exercise Notice to the
Secretary of Newhall Management Corporation, I hereby pay to the
Partnership the Exercise Price for the Purchased Depositary Units in
accordance with the provisions of my Agreement with the Partnership
evidencing the Option and shall deliver whatever additional documents
may be required by such Agreement as a condition for exercise.
Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my Agreement to effect the payment
of the Exercise Price for the Purchased Depositary Units.
____________________, _____
Date
Optionee: ______________________________________
Address: ______________________________________
__________________________________________
Print name in exact manner
it is to appear on the
depositary receipt: _________________________________________________
Address to which depositary receipt
is to be sent, if different
from address above: _________________________________________________
_________________________________________________
Social Security Number: ___________________________________________
9.