FORM OF STOCK OPTION AGREEMENT
Published on August 22, 2005
Exhibit
10.2
DYNEX
CAPITAL, INC.
DIRECTOR
STOCK OPTION AGREEMENT
THIS
AGREEMENT, dated as of the 17th
day of
June, 2005 between DYNEX CAPITAL, INC. (the “Corporation”), and _____________
(the “Recipient”).
WHEREAS,
pursuant to the DYNEX CAPITAL, INC. 2004 Stock Incentive Plan (the “Plan”), and
pursuant to that certain Action-in-Writing dated April 13, 2005, the Board
wishes to enable the Recipient to participate in its future success and to
associate their interests with those of the Corporation and its shareholders
through the grant of an option to purchase Common Stock of the Corporation
under
the terms outlined below; and
WHEREAS,
the Recipient desires to accept said award in accordance with the terms and
provisions of the Plan and this Agreement.
NOW
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the Corporation and the Recipient agree
as
follows:
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1.
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Grant
of Option.
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Subject
to the terms and conditions of the Plan and subject further to the terms
and
conditions set forth herein, the Corporation granted to the Recipient on
June
17, 2005 (“Date of Grant”) the right and option to purchase from the Company all
or any part of an aggregate of 5,000 shares of Common Stock at the option
price
of $8.46 per share which is 110% of Fair Market Value of Common Stock on
the
Date of Grant. This option is not intended to be an “Incentive Stock Option”
under section 422 of the Code. Such option will be exercisable as hereafter
provided. Capitalized terms not otherwise defined herein have the meanings
given
to them in the Plan.
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2.
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Exercise
of Option.
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This
option shall be exercisable with respect to all of the shares subject to
the
option on the Date of Grant. Once this option has become exercisable in
accordance with the previous sentence it shall continue to be exercisable
until
the termination of Recipient’s rights hereunder pursuant to paragraph 6. A
partial exercise of this option shall not affect Recipient’s right to exercise
this option with respect to the remaining shares, subject to the conditions
of
the Plan and this Agreement.
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3.
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Method
of Exercising and Payment for Shares.
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This
option shall be exercised by delivery of a written Notice of Exercise stating
the number of shares the Recipient desires to exercise. The form of Notice
of
Exercise is attached to this Agreement as Exhibit A. The exercise date shall
be
the later of the date specified in the Notice of Exercise or the date such
notice is received by the Corporation. Notices should be delivered to Dynex
Capital, Inc., at its Corporate headquarters, Attention: Chief
Financial
Officer.
Such notice shall be accompanied by the payment of the option price in full,
in
cash or cash equivalent.
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4.
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Termination.
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This
option shall terminate upon the earliest of the following events:
(a) June
17,
2010.
(b) The
expiration of twelve (12) months after the date the Recipient ceases to be
a
member of the Board, provided, however, that if the Recipient continues to
provide consulting or other material services to the Corporation, the expiration
date will be twelve (12) months from the time that the Recipient no longer
provides consulting or other material services to the Corporation.
(c) The
expiration of twelve (12) months after the date of death of the Recipient
if
death occurs while the Recipient is a member of the Board. During this period,
the Recipient’s estate, personal representative or beneficiary shall have the
right to exercise the option to the extent it is exercisable on the date
of
Recipient’s death.
(d) The
expiration of twelve (12) months after the date the Recipient is terminated
from
service on the Board due to disability. During this period, the Recipient
shall
have the right to exercise the option to the extent it is exercisable on
the
date of termination due to disability.
(e) The
expiration of twelve (12) months after the date of the Recipient’s Retirement.
During this period, the Recipient shall have the right to exercise the option
to
the extent it is exercisable on the date of Retirement. For purposes of this
Agreement, Retirement means termination from the Board in accordance with
the
Corporation’s Corporate Governance Guidelines.
The
Board
shall have absolute discretion to determine whether any termination of Recipient
from the Board or authorized leave of absence or absence due to military
or
government service is to be considered as Retirement for purposes of this
Agreement and whether an authorized leave of absence or absence due to military
or government service shall constitute a termination of service from the
Board
for the purposes of this Agreement. Any determination made by the Board with
respect to any matter referred to in this paragraph 6 shall be final and
conclusive.
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5.
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Nontransferability.
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This
option is nontransferable except by will or the laws of descent and
distribution. This option is exercisable during the Recipient’s lifetime only by
the Recipient.
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6.
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Rights
as a Shareholder.
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The
Recipient shall have no rights as a shareholder with respect to any Common
Stock
covered by the option prior to the exercise of the option and the issuance
of
shares of Common Stock.
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7.
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Recapitalization.
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If
the
Corporation shall effect a subdivision or consolidation of shares of Common
Stock, or other capital readjustment, or the payment of a stock dividend,
or
other increase or decrease in the number of shares of Common Stock outstanding,
without receiving compensation therefore, then (a) in the event of any increase
in the number of shares of Common Stock outstanding, the number of shares
of
Common Stock then remaining hereunder shall be proportionately increased
(except
that any fractional share resulting from any such adjustment shall be excluded
from the operation of this Agreement), and the exercise price per share shall
be
proportionately reduced) but not below the par value of such share), and
(b) in
the event of a reduction in the number of shares of Common Stock outstanding,
the number of shares of Common Stock then remaining hereunder shall be
proportionately reduced (except that any fractional share resulting from
any
such adjustments shall be excluded from the operation of this Agreement),
and
the exercise price per share shall be proportionately increased.
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8.
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No
Rights to Continued Service.
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Nothing
in this Agreement or in the Plan shall confer any right to continued service
on
the Board nor restrict the termination of service of the Recipient at any
time.
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9.
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Recipient’s
Agreement.
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Notwithstanding
any other provision of this Agreement, Recipient agrees that Recipient will
not
exercise this option and the Corporation shall not be obligated to issue
any
Common Stock hereunder, if counsel to the Corporation determines such exercise
or issuance would violate any law or regulation of any governmental authority
or
agreement between the Corporation and any securities exchange upon which
the
Common Stock is listed.
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10.
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Resolution
of Disputes.
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Any
dispute or disagreement which shall arise under, or as a result of, or pursuant
to, this Agreement shall be determined by the Board in its absolute discretion,
and any determination by the Board under or pursuant to this Agreement and
any
interpretation by the Board of the terms of this Agreement shall be final,
binding and conclusive on all persons affected thereby.
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11.
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Amendments.
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The
Committee shall have the right, in its absolute discretion, to alter or amend
this Agreement in any manner, and any alteration or amendment of the Agreement
by the Committee shall, upon adoption thereof by the Committee, become and
be
binding and conclusive on all persons affected thereby without written notice
to
the Recipient of any alteration or amendment
of
this
Agreement by the Committee as promptly as practical after the adoption thereof.
Notwithstanding the foregoing provisions of this paragraph 10, no alteration
or
amendment of this Agreement shall be made that would adversely affect the
rights
of the Recipient without the Recipient’s consent.
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12.
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Construction.
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This
Agreement has been entered into in accordance with the terms of the Plan,
and
wherever a conflict may arise between the terms of this Agreement and the
terms
of the Plan, the terms of the Plan shall control.
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13.
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Governing
Law.
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This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the Commonwealth of Virginia.
IN
WITNESS WHEREOF,
the
Corporation has caused this Agreement to be executed by its duly authorized
officer, and the Recipient has hereunto set his hand and seal, all on the
day
and year first above written.
If
this
Agreement is not signed and returned by the Recipient to the Chief Financial
Officer of the Corporation (or other designated person) on or before ________,
this Agreement shall become null and void.
DYNEX
CAPITAL, INC.
By:
Stephen
J. Benedetti
Executive
Vice President
THE
RECIPIENT
Date:
DYNEX
CAPITAL, INC.
2004
Stock Incentive Plan
STOCK
OPTION
NOTICE
OF EXERCISE
Chief
Financial Officer
Dynex
Capital, Inc.
4551
Cox
Road
Suite
300
Glen
Allen, Virginia 23060
Phone:
(804) 217-5800
Telecopy:
(804) 217-5860
I
hereby
exercise ________ options pursuant to the Option Agreement dated _____, ____,
at
an exercise price of $____ per share. Enclosed is a check for the exercise
price
of
$______.
Dated:
Recipient’s
Signature
Recipient’s
Name