Exhibit 10.2
FORM OF
FX REAL ESTATE AND ENTERTAINMENT INC.
2007 EXECUTIVE EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
[                                        ]
Agreement
     1. Grant of Option. FX REAL ESTATE AND ENTERTAINMENT INC. (the “Company”)
hereby grants, as of [                    ] (“Date of Grant”), to
[                    ] (the “Optionee”) an option (the “Option”) to purchase up
to [                    ] shares (the “Shares”) of the Company’s common stock,
$0.01 par value per share (“Common Stock”), at an exercise price per share equal
to $[not less than 100% of the Fair Market Value] (the “Exercise Price”). The
Option shall be subject to the terms and conditions set forth herein. The Option
was issued pursuant to the Company’s 2007 EXECUTIVE EQUITY INCENTIVE PLAN (the
“Plan”), which is incorporated herein for all purposes. The Option is a
Non-Qualified Stock Option, and not an Incentive Stock Option. The Optionee
hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
of the terms and conditions hereof and thereof and all applicable laws and
regulations.
     2. Definitions. Unless otherwise provided herein, terms used herein that
are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
     3. Exercise Schedule. Except as otherwise provided in Sections 6 or 9 of
this Agreement, or in the Plan, the Option is exercisable in installments as
provided below, which shall be cumulative. To the extent that the Option has
become exercisable with respect to a percentage of the Option as provided below,
the Option may thereafter be exercised by the Optionee, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided
herein. The following table indicates each date upon which the percentage of the
Option has vested (the “Vesting Date”) and the date upon which the percentage of
the Option has become exercisable (the “Exercisable Date”), provided that the
Continuous Service of the Optionee continues through and on the applicable
Vesting Date:

          Percentage of Option   Vesting Date   Exercisable Date          

     Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting Date, and
all vesting shall occur only on the appropriate Vesting Date. Upon the
termination of the Optionee’s Continuous Service with the

 

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Company and its Related Entities, any unvested portion of the Option shall
terminate and be null and void.
     4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder’s investment intent with respect to such Shares as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied by payment
of the Exercise Price. This Option shall be deemed to be exercised after both
(a) receipt by the Company of such written notice accompanied by the Exercise
Price and (b) arrangements that are satisfactory to the Committee in its sole
discretion have been made for Optionee’s payment to the Company of the amount,
if any, that is necessary to be withheld in accordance with applicable Federal
or state withholding requirements. No Shares shall be issued pursuant to the
Option unless and until such issuance and such exercise shall comply with all
relevant provisions of applicable law, including the requirements of any stock
exchange upon which the Shares then may be traded.
     5. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a) cash;
(b) check; (c) proceeds from the sale of Shares pursuant to broker-assisted
“cashless” exercise procedures and guidelines approved by the Committee; (d) by
the withholding of Shares issuable upon exercise of the Option; (e) by the
delivery of shares of Common Stock held by the Optionee to the extent held for
such period of time, if any, required to avoid a charge to the earnings of the
Company for financial accounting purposes; or (f) such other consideration or in
such other manner as may be determined by the Committee in its absolute
discretion.
     6. Termination of Option.
          (a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time of the earliest to
occur of the following:
               (i) unless the Committee otherwise determines in writing in its
sole discretion, three months after the date on which the Optionee’s Continuous
Service is terminated other than by reason of (A) by the Company or a Related
Entity for Cause, (B) a Disability of the Optionee as determined by a medical
doctor satisfactory to the Committee, or (C) the death of the Optionee;
               (ii) immediately upon the termination of the Optionee’s
Continuous Service by the Company or a Related Entity for Cause;
               (iii) the tenth anniversary of the date as of which the Option is
granted if the Optionee’s Continuous Service is terminated by reason of a
Disability as determined by a medical doctor satisfactory to the Committee;
               (iv) the tenth anniversary of the date as of which the Option is
granted if the Optionee’s Continuous Service is terminated by reason of the
death of the Optionee, ; or

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               (v) the tenth anniversary of the date as of which the Option is
granted.
          (b) To the extent not previously exercised, (i) the Option shall
terminate immediately in the event of (1) the liquidation or dissolution of the
Company, or (2) any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive or the Shares are
exchanged for or converted into securities issued by another entity, or an
affiliate of such successor or acquiring entity, unless the successor or
acquiring entity, or an affiliate thereof, assumes the Option or substitutes an
equivalent option or right pursuant to Section 9(c) of the Plan, and (ii) the
Committee in its sole discretion may by written notice (“cancellation notice”)
cancel, effective upon the consummation of any corporate transaction described
in Section 8(b)(i) of the Plan, the Option (or portion thereof) that remains
unexercised on such date. The Committee shall give written notice of any
proposed transaction referred to in this Section 6(b) a reasonable period of
time prior to the closing date for such transaction (which notice may be given
either before or after approval of such transaction), in order that the Optionee
may have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may become
exercisable upon the closing date of such transaction). The Optionee may
condition his exercise of the Option upon the consummation of a transaction
referred to in this Section 6(b).
     7. Transferability. Unless otherwise determined by the Committee, the
Option granted hereby is not transferable otherwise than by will or under the
applicable laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee, or the Optionee’s
guardian or legal representative. In addition, the Option shall not be assigned,
negotiated, pledged or hypothecated in any way (whether by operation of law or
otherwise), and the Option shall not be subject to execution, attachment or
similar process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the Option, or in the event of any levy upon the Option by reason of
any execution, attachment or similar process contrary to the provisions hereof,
the Option shall immediately become null and void. The terms of this Option
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee.
     8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any Shares
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
     9. Acceleration of Exercisability of Option.
          (a) This Option shall immediately vest and become fully exercisable in
the event that, prior to the termination of the Option pursuant to Section 6
hereof, (i) the Option is terminated pursuant to Section 6(b)(i) hereof, or
(ii) the Company exercises its discretion to provide a cancellation notice with
respect to the Option pursuant to Section 6(b)(ii) hereof.
          (b) This Option shall immediately vest and become fully exercisable if
the Optionee’s Continuous Service is terminated by reason of (i) a Disability of
the Optionee as

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determined by a medical doctor satisfactory to the Committee, (ii) the Company
or a Related Entity without Cause or (iii) the death of the Optionee.
          (c) This Option shall become immediately fully exercisable in the
event that, prior to the termination of the Option pursuant to Section 6 hereof,
and during the Optionee’s Continuous Service, there is a “Change in Control”, as
defined in Section 9(b) of the Plan.
          (d) Notwithstanding the foregoing, if in the event of a Change in
Control the successor company assumes or substitutes for the Option, the vesting
of the Option shall not be accelerated as described in Section 9(b). For the
purposes of this paragraph, the Option shall be considered assumed or
substituted for if following the Change in Control the Option or substituted
option confers the right to purchase, for each Share subject to the Option
immediately prior to the Change in Control, the consideration (whether stock,
cash or other securities or property) received in the transaction constituting a
Change in Control by holders of Shares for each Share held on the effective date
of such transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the
transaction constituting a Change in Control is not solely common stock of the
successor company or its parent or subsidiary, the Committee may with the
consent of the successor company or its parent or subsidiary, provide that the
consideration to be received upon the exercise or vesting of the Option will be
solely common stock of the successor company or its parent or subsidiary
substantially equal in fair market value to the per share consideration received
by holders of Shares in the transaction constituting a Change in Control. The
determination of such substantial equality of value of consideration shall be
made by the Committee in its sole discretion and its determination shall be
conclusive and binding.
     10. No Right to Continued Employment. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or service with
the Company.
     11. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of New York.
     12. Interpretation; Provisions of Plan. This Agreement is subject to all
the terms, conditions and provisions of the Plan, including, without limitation,
the amendment provisions thereof, and to such rules, regulations and
interpretations relating to the Plan adopted by the Committee as may be in
effect from time to time. If and to the extent that this Agreement conflicts or
is inconsistent with the terms, conditions and provisions of the Plan, the Plan
shall control, and this Agreement shall be deemed to be modified accordingly.
The Optionee accepts the Option subject to all of the terms, conditions and
provisions of the Plan and this Agreement. The undersigned Optionee hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan and this Agreement, unless
shown to have been made in an arbitrary and capricious manner.
     13. Notices. Any notice under this Agreement shall be in writing and shall
be deemed to have been duly given when delivered personally or when deposited in
the United States mail, registered, postage prepaid, and addressed, in the case
of the Company, to the Company’s Secretary at 650 Madison Avenue, New York, New
York 10022, or if the Company

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should move its principal office, to such principal office, and, in the case of
the Optionee, to the Optionee’s last permanent address as shown on the Company’s
records, subject to the right of either party to designate some other address at
any time hereafter in a notice satisfying the requirements of this Section.
     14. Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
     (a) The Optionee will not recognize any income on receipt of the Option.
     (b) The Optionee will recognize ordinary income at the time he or she
exercises the Option equal to the amount by which the Fair Market Value of the
Shares on the date of exercise exceeds the Exercise Price paid for the Shares.
The amount so recognized is subject to income tax withholding and employment
taxes if the Optionee is an employee of the Company or a Related Entity.
     (c) The Optionee’s tax basis for the Shares received as a result of the
exercise of the Option will be equal to the Fair Market Value of those Shares on
the date the Option is exercised.
     (d) Upon the sale of the Shares, the Optionee will recognize a capital gain
or loss on the difference between the amount realized from the sale of the
Shares and the Fair Market Value on the date the Option is exercised. The gain
or loss would be short- or long-term depending upon whether the Shares were held
for at least one year after the date of exercise of the Option.
     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
[                    ] day of [                    ], 200[                    ].

                             COMPANY:

FX REAL ESTATE AND ENTERTAINMENT INC.
        By:             Name:             Title:          

     The Optionee acknowledges receipt of a copy of the Plan and represents that
he or she has reviewed the provisions of the Plan and this Option Agreement in
their entirety, is familiar with and understands their terms and provisions, and
hereby accepts this Option subject to all of the terms and provisions of the
Plan and the Option Agreement. The Optionee further represents

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that he or she has had an opportunity to obtain the advice of counsel prior to
executing this Option Agreement.

          Dated: [                    ], 200[                    ] OPTIONEE:
 
       
 
  By:    
 
       
 
      [                    ]

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FX REAL ESTATE AND ENTERTAINMENT INC.
2007 EXECUTIVE EQUITY INCENTIVE PLAN
NOTICE OF EXERCISE OF STOCK OPTION
You must sign this Notice on the last page before submitting it to the Company
OPTIONEE INFORMATION:

                 
Name:
          Social Security Number:    
 
 
 
           
 
         
 
   
 
               
Address:
          Employee Number:    
 
 
 
           
 
               
 
 
 
     
 
   

OPTION INFORMATION:

     
Date of Grant: [                    ]
  Type of Stock Option:
 
   
Exercise Price per Share: $[                    ]
  þ      Nonqualified (NSO)
 
   
Total number of shares of Common Stock of
  o      Incentive (ISO)
FX REAL ESTATE AND ENTERTAINMENT INC.
   
(the “Company”) covered by option: [                    ]
   

EXERCISE INFORMATION:
Number of shares of Common Stock of the Company for which option is being
exercised now:                                         . (These shares are
referred to below as the “Purchased Shares.”)
Total exercise price for the Purchased Shares:
$                                        
Form of payment enclosed [check all that apply]:

o   Check for $                                        , payable to “FX REAL
ESTATE AND ENTERTAINMENT INC.”   o   Certificate(s) for
                                         shares of Common Stock of the Company
that I have owned for such period of time required to avoid the Company having
to take a

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    charge to its earnings for financial accounting purposes. (These shares will
be valued as of the date when the Company receives this notice.)   o  
Broker-assisted “Cashless” exercise procedures.   o   Attestation Form covering
                                         shares of Common Stock of the Company.
(These shares will be valued as of the date when the Company receives this
notice.

Name(s) in which the Purchased Shares should be registered [please check one
box]:

          o   In my name only       o   In the names of my spouse and myself as
community property   My spouse’s name (if applicable):

         
 
       
 
       
o
  In the names of my spouse and myself as joint tenants with the right of
survivorship       o   In the name of an eligible revocable trust   Full legal
name of revocable trust:

     
 
   
 
   
 
   
 
   
 
   
 
   
The certificate for the Purchased Shares should be sent to the
   
 
   
following address:
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   

ACKNOWLEDGMENTS:

1.   I understand that all sales of the Purchased Shares are subject to
compliance with the Company’s policy on securities trades.   2.   I hereby
acknowledge that I received and read a copy of the prospectus describing the
Company’s 2007 EXECUTIVE EQUITY INCENTIVE PLAN and the tax consequences of an
exercise.   3.   In the case of a nonqualified option, I understand that I must
recognize ordinary income equal to the spread between the fair market value of
the Purchased Shares on the date of

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    exercise and the exercise price. I further understand that I am required to
pay withholding taxes at the time of exercising a nonqualified option.

SIGNATURE           AND           DATE:
                                                              
                                                                       
                             , 200                    

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