Exhibit 10.3

IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

NYMEX HOLDINGS, INC.

NOTICE OF GRANT OF STOCK OPTION

Conditioned upon the consummation of the initial public offering of NYMEX
Holdings, Inc. common stock,                      (the “Grantee”) has been
granted an option (the “Option”) to purchase certain shares of NYMEX Holdings,
Inc. common stock, par value $0.01 per share (the “Stock”), pursuant to the
NYMEX Holdings, Inc. 2006 Omnibus Long-Term Incentive Plan (the “Plan”), as
follows:

 

Grant Date:

   November 17, 2006

Number of Option Shares:

  

Exercise Price (per share):

   $59.00

Expiration Date:

   November 17, 2014

Tax Status of Option:

   Non-Qualified Stock Option

Vested Shares: Except as provided below, and provided that the Grantee’s Service
has not terminated prior to any applicable date set forth below, the number of
Vested Shares as of each date set forth below shall be:

 

Vesting Date

   Percentage Vested  

November 17, 2007

   25 %

November 17, 2008

   25 %

November 17, 2009

   25 %

November 17, 2010

   25 %

Notwithstanding the foregoing, all Options awarded hereunder shall 100% vest if
the Grantee is terminated without Cause or terminates as a result of a
Constructive Discharge during the eighteen (18) month period following a Change
in Control.

By signing below, the Grantee hereby agrees that the Option is governed by this
Notice, and by the provisions of the Plan and the attached Terms and Conditions,
both of which are incorporated herein and made a part of this document. The
Grantee acknowledges receipt of a copy of the Plan and the attached Terms and
Conditions, represents that the Grantee has read and is familiar with their
provisions, and hereby accepts the Option subject to all of their terms and
conditions. Capitalized terms used in this Notice and the attached Terms and
Conditions shall have the meaning assigned in the Plan, unless otherwise
indicated. This Notice may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same document.

 

NYMEX HOLDINGS, INC.     GRANTEE By:  

 

   

 

Name:       Name:   Title:         Address:  

One North End Avenue

World Financial Center

New York, NY 10282-1101

    Address:  

 

       

 

       

 

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IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

TERMS AND CONDITIONS

Pursuant to the NYMEX Holdings, Inc. 2006 Omnibus Long-Term Incentive Plan (the
“Plan”), and conditioned upon the consummation of the initial public offering of
NYMEX Holdings, Inc. common stock, NYMEX Holdings, Inc., a Delaware corporation
(together with all successors thereto, the “Company”), the person (the
“Grantee”) named in the Notice of Grant of Stock Option (the “Notice”) to which
these Terms and Conditions are attached is hereby granted an option (together
with the Notice, referred to herein as the “Option”) to purchase on or prior to
the expiration date specified in the Notice (the “Expiration Date”), or such
earlier date as is specified herein, all or any part of the number of shares of
Stock of the Company indicated in the Notice (the “Option Shares,” and such
shares once issued shall be referred to as the “Issued Shares,” each as adjusted
pursuant to Section 15 of the Plan), at the exercise price per share specified
in the Notice (the “Exercise Price”), subject to these Terms and Conditions, the
Notice and the Plan. All capitalized terms used herein and not otherwise defined
shall have the respective meanings set forth in the Notice and the Plan (as
applicable).

If this Option is designated as an Incentive Stock Option in the Notice, this
Option is intended to qualify as an “incentive stock option” as defined in
Section 422(b) of the Code. To the extent that any portion of this Option does
not so qualify as an Incentive Stock Option or, if this Option is designated as
a Non-Qualified Stock Option in the Notice, it shall be deemed a Non-Qualified
Stock Option. The Grantee should consult with the Grantee’s own tax advisor
regarding the tax effects of this Option (and any requirements necessary to
obtain favorable income tax treatment under Section 422 of the Code, including,
but not limited to, holding period requirements).

1. Exercise of Option.

(a) The Grantee may exercise this Option only by delivering (1) an exercise
notice (an “Exercise Notice”) in substantially the form of Appendix A attached
hereto to the Company’s Chief Financial Officer or, if none, the Chief Executive
Officer, indicating his or her election to purchase some or all of the Option
Shares with respect to which this Option has vested at the time of delivery of
such Exercise Notice (which amount shall be specified in the Exercise Notice),
and (2) payment in full of the aggregate Exercise Price; provided that such
exercise shall be effective only upon receipt by such officer of the Exercise
Notice and the aggregate Exercise Price. Payment of the aggregate Exercise Price
for the Option Shares elected to be purchased by the Grantee may be made by one
or more of the following methods:

(i) in cash, by certified or bank check, or other instrument acceptable to the
Board in U.S. funds payable to the order of the Company in an amount equal to
the aggregate Exercise Price of such Option Shares;

(ii) by the Grantee delivering to the Company a promissory note in a form
approved by the Board, if the Board has expressly authorized the loan of funds
to the Grantee for the purpose of enabling or assisting the Grantee to effect
the exercise of the Grantee’s Option; provided that at least so much of the
Exercise Price as represents the par value of the shares of Stock to be issued
shall be paid other than with a promissory note if otherwise required by state
law;

(iii) if permitted by the Board, (x) by having the Company withhold from such
Option Shares shares having a Fair Market Value equal to the aggregate Exercise
Price of the Option Shares, (y) through the delivery (or attestation to the
ownership) of shares of Stock that have

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IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

been purchased by the Grantee on the open market or that have been held by the
Grantee for at least six (6) months and are not subject to restrictions under
any plan of the Company, (z) by the Grantee delivering to the Company a properly
executed Exercise Notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to the
Company to pay the aggregate Exercise Price of such Option Shares, provided that
in the event the Grantee chooses such payment procedure, the Grantee and the
broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Board shall prescribe as a condition of
such payment procedure; or

(iv) a combination of the payment methods set forth in clauses (i), (ii) and
(iii) above, if applicable.

(b) The Company shall not be required to issue fractional shares upon the
exercise of this Option.

2. Subject to Plan.

Notwithstanding anything in these Terms and Conditions or the Notice to the
contrary, to the extent of any conflict between the terms of the Plan, these
Terms and Conditions and the Notice, the terms of the Plan shall control.

3. Transferability.

This Option is personal to the Grantee and is not transferable by the Grantee in
any manner other than by will or by the laws of descent and distribution;
provided that if this Option is designated as a Non-Qualified Stock Option, such
Non-Qualified Stock Option may also be transferred with the prior written
consent of the Company by the Grantee, without consideration for the transfer,
to any of the Grantee’s Family Members (the “Permitted Transferees”), provided
that the transferee agrees in writing with the Company to be bound by all of the
terms and conditions of the Plan, the Notice and these Terms and Conditions, and
all references to the Grantee herein shall be deemed to include the Permitted
Transferee. This Option may be exercised during the Grantee’s lifetime only by
the Grantee (or by the Grantee’s legal representative or guardian in the event
of the Grantee’s incapacity) or by a Permitted Transferee pursuant to this
Section 3.

4. Effect of Certain Transactions.

Upon the effectiveness of (i) a merger, reorganization or consolidation between
the Company and another person or entity (other than a holding company or parent
or subsidiary of the Company) as a result of which the holders of the Company’s
outstanding Common Stock immediately prior to the transaction hold less than a
majority of the outstanding voting stock of the surviving entity immediately
after the transaction, or (ii) the sale of all or substantially all of the
assets of the Company to an unrelated person or entity (in each case, a
“Transaction”), unless provision is made in connection with the Transaction for
the assumption of all outstanding Awards, or the substitution of such Awards
with new Awards of the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of shares and, if appropriate, the per
share exercise prices, as provided in Section 15 of the Plan (an “Assumption”),
this Option shall terminate. In the event of such termination, the Grantee shall
be permitted to exercise the Option prior to the anticipated effective date of
the Transaction to the extent the Option is then vested and exercisable;
provided, however, that the Grantee may, but will not be required to, condition
such exercise upon the effectiveness of the Transaction.

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IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

5. Lock-up Provision.

In connection with a public offering by the Company of its Common Stock, the
Grantee (including any Permitted Transferee), if requested in good faith by the
Company and the managing underwriter of the Company’s securities, shall agree
not to, directly or indirectly, offer, sell, pledge, contract to sell (including
any short sale), grant any option to purchase or otherwise dispose of any
securities of the Company held by them (except for any securities sold pursuant
to such registration statement) or enter into any Hedging Transaction (as
defined below) relating to any securities of the Company for a period to be
determined by the managing underwriter. For purposes of this Section 5, “Hedging
Transaction” means any short sale (whether or not against the box) or any
purchase, sale or grant of any right (including without limitation, any put or
call option) with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from the Company’s Common Stock.

6. Restrictive Covenants.

(a) Non Competitive Behavior. Grantee understands, acknowledges and agrees that
the Award contemplated herein is offered, in part, based on his being bound by
the requirements of Section 6 of the Employment Agreement dated as of March 31,
2003, as subsequently amended March 31, 2006 and as further amended as of
November 17, 2006, by and between the Company and the Grantee (“Employment
Agreement”), the terms of such Section 6 of the Employment Agreement are
incorporated herein by reference.

(b) Forfeiture. If, at any time following the Grant Date, the Grantee’s Service
to the Company is terminated by the Company for Cause, or the Grantee violates
the terms of this Section 6, all Option Shares shall immediately expire and
shall no longer be exercisable by the Grantee, and all Issued Shares then-held
by the Grantee shall be immediately forfeited to the Company (and the Grantee
hereby acknowledges and agrees that the Company may take any and all actions it
deems appropriate to effect such forfeiture); provided, however, if the Grantee
has sold or otherwise transferred the Issued Shares prior to any required
forfeiture hereunder, then the Grantee agrees to pay to the Company an amount
equal to the difference between the aggregate Fair Market Value (determined as
of the date of termination or breach, as applicable) of the Issued Shares the
Grantee held prior to such sale or transfer over the aggregate Exercise Price
for such Issued Shares.

(c) Survival of Acknowledgements and Agreements. The Grantee’s acknowledgements
and agreements set forth in this Section 6 will survive the termination of the
Options, Issued Shares and/or the termination of the Employment Agreement or
Grantee’s Service to the Company for any reason or for no reason.

7. Constructive Discharge.

A “Constructive Discharge” termination means that the Grantee voluntarily
terminates his employment upon (or in connection with) or within the 18 month
period following a Change in Control after the occurrence of any of the
following: (i) a material diminution in the Grantee’s position, authority,
duties, responsibilities or status (including without limitation diminution in:
office, title, reporting relationships, level of responsibility, scope of
authority, sophistication of work,

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IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

or material diminution of number of direct reports, among other things) as in
effect immediately prior to the Change in Control, (ii) a reduction in the
Grantee’s base salary from his or her highest base salary in effect at any time
within 12 months preceding the Change in Control, (iii) the Grantee’s
involuntary cessation of participation in any compensation plan in which he or
she participated immediately prior to the Change in Control (or in a substitute
or alternative plan) on a basis not materially less favorable, both in terms of
the amount of benefits provided and the level of the Grantee’s participation
relative to similarly situated employees, (iv) without the Grantee’s express
written consent, relocation of Grantee’s work situs to a location that is not in
the New York City metropolitan area, or (v) the failure of the Company to obtain
an agreement satisfactory to the Grantee from any successor to the Company to
assume and agree to perform the Company’s obligations under this Agreement or
any other agreement between the Grantee and the Company. For these purposes, the
Grantee will be deemed to have voluntarily terminated his employment based on a
Constructive Discharge “in connection with” a Change in Control prior to the
closing date of a Change in Control if any of the occurrences identified above
occur on or after the date the Company formally begins to consider a Change in
Control or has knowledge that a Change in Control is imminent, and a Change in
Control actually occurs.

8. Miscellaneous Provisions.

(a) Integrated Agreement. The Notice, the Plan and these Terms and Conditions
constitute the entire understanding and agreement between the Grantee and the
Company with respect to the subject matter contained herein and supersedes any
prior agreements, understandings, restrictions, representations, or warranties
among the Grantee and the Company with respect to such subject matter except as
provided for herein. To the extent contemplated herein, the provisions of these
Terms and Conditions shall survive any exercise of this Option and shall remain
in full force and effect.

(b) Change and Modifications. The Board may terminate or amend the Plan or this
Option at any time; provided, however, that except as provided in Section 4
hereof in connection with a Transaction, no such termination or amendment may
adversely affect this Option without the consent of the Grantee unless such
termination or amendment is necessary to comply with any applicable law, rule or
regulation or, to the extent that this Option is designated as an Incentive
Stock Option, is required to enable this Option to continue to qualify as an
Incentive Stock Option.

(c) Notices. All notices, requests, consents and other communications shall be
in writing and be deemed given when delivered personally, by facsimile
transmission or one (1) business day after deposit with a nationally recognized
expedited delivery service, such as Federal Express. Notices to the Company or
the Grantee shall be addressed to such address or addresses as may have been
furnished by such party in writing to the other.

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IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

Appendix A

STOCK OPTION EXERCISE NOTICE

Form for Unregistered Shares

 

NYMEX Holdings, Inc.    One North End Avenue    World Financial Center    New
York, NY 10282-1101    Attention: Chief Financial Officer   
Date:                     

Pursuant to the terms of the Notice of Grant of Stock Option dated
                     and the accompanying Terms and Conditions granted pursuant
to the NYMEX Holdings, Inc. 2006 Omnibus Long-Term Incentive Plan and entered
into by NYMEX Holdings, Inc. (the “Company”) and me on such date, I hereby
partially/fully exercise circle one such option by including herein payment in
the amount of $             representing the purchase price for
                     shares of the Company’s common stock, all of which have
vested in accordance with the Notice of Grant of Stock Option. I hereby
authorize payroll withholding or otherwise will make adequate provision for
federal, state, foreign and local tax withholding obligations of the Company, if
any, that arise in connection with the option.

I acknowledge that the shares are being acquired in accordance with and subject
to the terms, provisions and conditions of the Plan, the Notice of Grant of
Stock Option, and the accompanying Terms and Conditions, copies of which I have
received and carefully read and understand, to all of which I hereby expressly
assent.

I hereby represent that I am purchasing the shares of common stock for my own
account and not with a view to any sale or distribution thereof. I understand
that such shares cannot be resold unless they are registered in accordance with
the Securities Act of 1933, as amended, or pursuant to an exemption from such
registration requirements. I further understand that Rule 144, promulgated under
the Securities Act of 1933, as amended, which permits limited public resale of
securities acquired in a nonpublic offering is available only if certain
conditions are satisfied. I acknowledge that any sale of such shares that might
be made in reliance on Rule 144 may only be made in limited amounts in
accordance with the terms and conditions of such rule and that a copy of Rule
144 will be delivered to me upon my request. Finally, I agree that, if the
option is designated as an “incentive stock option” in the Notice of Grant of
Stock Option, that I will promptly notify the Chief Financial Officer of the
Company if I transfer any of the shares acquired pursuant to the option within
one (1) year from the date of exercise of all or part of the option or within
two (2) years of the date of grant of the option.

Sincerely yours,

 

Signature:  

 

Print Name:  

 

Address:  

 

 

 

Telephone:  

 

e-mail:  

 

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IPO OPTION GRANT—INDIVIDUALS WITH

EXISTING EMPLOYMENT AGREEMENTS

Appendix A

STOCK OPTION EXERCISE NOTICE

Form for Registered Shares

 

NYMEX Holdings, Inc.    One North End Avenue    World Financial Center    New
York, NY 10282-1101    Attention: Chief Financial Officer    Date:
                    

Pursuant to the terms of the Notice of Grant of Stock Option dated
                     and the accompanying Terms and Conditions granted pursuant
to the NYMEX Holdings, Inc. 2006 Omnibus Long-Term Incentive Plan and entered
into by NYMEX Holdings, Inc. (the “Company”) and me on such date, I hereby
partially/fully exercise circle one such option by including herein payment in
the amount of $             representing the purchase price for
                     shares of the Company’s common stock, all of which have
vested in accordance with the Notice of Grant of Stock Option. I hereby
authorize payroll withholding or otherwise will make adequate provision for
federal, state, foreign and local tax withholding obligations of the Company, if
any, that arise in connection with the option.

I acknowledge that the shares are being acquired in accordance with and subject
to the terms, provisions and conditions of the Plan, the Notice of Grant of
Stock Option, and the accompanying Terms and Conditions, copies of which I have
received and carefully read and understand, to all of which I hereby expressly
assent.

I understand the nature of the investment I am making and the financial risks
thereof. I am aware that it is my responsibility to have consulted with
competent tax and legal advisors about the relevant national, state and local
income tax and securities laws affecting the exercise of the Option and the
purchase and subsequent sale of the shares.

I agree that, if the option is designated as an “incentive stock option” in the
Notice of Grant of Stock Option, that I will promptly notify the Chief Financial
Officer of the Company if I transfer any of the shares acquired pursuant to the
option within one (1) year from the date of exercise of all or part of the
option or within two (2) years of the date of grant of the option.

Sincerely yours,

 

Signature:  

 

Print Name:  

 

Address:  

 

 

 

Telephone:  

 

e-mail: