THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as of the 20th
day of October, 2000 (the "Effective Date"), between Southland Financial, Inc., a Nevada corporation (hereinafter called the "Company"), and [NAME OF
OPTIONEE] (hereinafter called the "Optionee"). The option granted by this Agreement is not intended to qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
Board of Directors of the Company (the "Board") has determined that it is to the advantage and interest of the Company and its stockholders to grant the option provided for herein
to the Optionee as an inducement to enter into the service of the Company and as an incentive for increased effort during such service. In consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the right and option (the "Option") to purchase, on the
terms and conditions hereinafter set forth, shares (the "Shares") of the presently authorized and unissued Common Stock of the Company. The number of shares subject to such Options, the purchase price
per Share, and the periods when such Options may be exercised shall be as set forth below:
1st October, 2000 to and including 30th September, 2007, 250,000 Shares, at $5.00 per Share;
1st January, 2001 to and including 30th September, 2007, 250,000 Shares, at $5.75 per Share;
1st April, 2001 to and including 30th September, 2007, 250,000 Shares, at $6.61 per Share;
1st July, 2001 to and including 30th September, 2007, 250,000 Shares, at $7.60 per Share;
1st October, 2001 to and including 30th September, 2007, 250,000 Shares, at $8.75 per Share;
1st January, 2002 to and including 30th September, 2007, 250,000 Shares, at $10.06 per Share;
1st April, 2002 to and including 30th September, 2007, 250,000 Shares, at $11.57 per Share; and
1st July, 2002 to and including 30th September, 2007, 250,000 Shares, at $13.30 per Share.
2. METHOD OF EXERCISE.
the extent that the right to purchase Shares has accrued hereunder, the Option may be exercised from time to time by delivering written notice to the Company
stating the number of Shares with respect to which the Option is being exercised, together with payment in full, in cash or by certified or cashier's check payable to the order of the Company, of the
purchase price for the number of Shares being purchased. If requested by the Board, prior to the delivery of any Shares, the Optionee, or any other person entitled to exercise the Option, shall supply
the Board with a representation that the Shares are not being acquired with a view to distribution and will be sold or otherwise disposed of only in accordance with applicable federal and state
statutes, rules and regulations. As a condition to the exercise of the Option, in whole or in part, the Board may, in its sole discretion, require the Optionee to pay, in addition to the purchase
price for the Shares
being purchased upon exercise of this Option, an amount equal to any federal, state or local withholding or employment taxes that the Board has determined are required to be paid in connection with
the exercise of the Option in order to enable the Company to claim a deduction in connection with such exercise, or otherwise.
soon after the notice of exercise as the Company is reasonably able to comply, the Company shall, without payment of any transfer tax by the Optionee or any
other person entitled to exercise the Option, deliver to the Optionee or any such other person, at the main office of the Company or such other place as shall be mutually acceptable, a certificate or
certificates for the Shares being purchased upon exercise of the Option.
the Board's sole discretion, payment of the purchase price for the number of Shares to be delivered, but not of the amount of any withholding taxes, may be made
in whole or in part with shares of Common Stock. If payment is made with shares of Common Stock, the Optionee, or other person
entitled to exercise the Option, shall deliver to the Company with the notice of exercise certificates representing the number of shares of Common Stock tendered in payment for the Shares, duly
endorsed for transfer to the Company. If requested by the Board, prior to the acceptance of such certificates in payment for the Shares, the Optionee, or any other person entitled to exercise the
Option, shall supply the Board with a written representation and warranty that he has good and marketable title to the shares represented by the certificates, free and clear of liens and encumbrances.
The value of the shares of Common Stock tendered in payment for the Shares being purchased shall be their fair market value on the date of the Optionee's notice of exercise.
the foregoing, the Company shall have the right to postpone the time of delivery of the Shares for such period as may be required for it with
reasonable diligence to comply with any applicable listing requirements of any national securities exchange or any federal, state or local law. The Optionee may exercise the Option for less than the
total number of Shares for which the Option is then exercisable, provided that a partial exercise may not be for less than 100 Shares, unless the remaining Shares exercisable under the Option is for
less than 100 Shares. The Option may only be exercisable for whole Shares.
3. TERMINATION OF OPTION. The Option shall terminate and expire upon the earliest of:
last date for exercise of the Option as specified in Section 1 of this Agreement;
expiration of twelve (12) months from the date the Optionee ceases to be an officer, director or employee of or consultant to the Company, by reason of
termination, death, disability or otherwise (absences for temporary illness, emergencies and vacations or leaves of absence approved in writing by the Company shall not be treated as a cessation of
the employment or consulting relationship until the 91st day after the absence begins or, if later, for so long as the Optionee's right to resume the relationship is guaranteed by statute or
termination of the Option pursuant to Section 5 hereof.
the event the Optionee ceases to be an officer, director or employee of or consultant to the Company, the Option may thereafter only be exercised with respect to the number of Shares for which it
was exercisable at the date of such event. In the event of the Optionee's death, the Option may be exercised prior to its expiration or termination by his personal representative, or if there is no
personal representative, by his heir or legatee.
4. ADJUSTMENTS. If there is any change in the capitalization of the Company affecting in any manner the number or kind
of outstanding shares of Common Stock of the Company, whether by stock dividend, stock split, reclassification or recapitalization of such stock, or because the Company has merged or consolidated with
one or more other corporations (and provided the Option does not
thereby terminate pursuant to Section 5 hereof), then the number and kind of shares then subject to the Option and the price to be paid therefor shall be appropriately adjusted by the Board; provided, however,
that in no event shall any such adjustment result in the Company being required to sell or issue any fractional shares. Any such
adjustment shall be made without change in the aggregate purchase price applicable to the unexercised portion of the Option but with an appropriate adjustment in the price of each Share or other unit
of any security covered by this Option.
5. CESSATION OF CORPORATION EXISTENCE. Upon the dissolution or liquidation of the Company, the reorganization, merger
or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or the sale of substantially all the assets of the Company or of more
than eighty percent (80%) of the then outstanding stock of the Company to another corporation or entity, the Option granted hereunder shall terminate; provided,
however, that: (i) unless a new option has been tendered by the surviving corporation in accordance with clause (ii) immediately below, the Option shall, within
thirty (30) days before the effective date of such dissolution or liquidation, merger or consolidation in which the Company is not the surviving corporation, or sale of assets or stock, become
fully exercisable; and (ii) in its sole and absolute discretion, the surviving corporation may, but shall not be obligated to, tender to the Optionee an option to purchase shares of the
surviving corporation or acquiring corporation, and such new option shall contain such terms and provisions as shall be required substantially to preserve the rights and benefits of this Option.
6. NON-TRANSFERABILITY. The Option is not assignable or transferable by the Optionee, either voluntarily or
by operation of law, otherwise than by will or by the laws of descent and distribution, and is exercisable, during the Optionee's lifetime, only by the Optionee. Upon any attempted transfer of this
Option contrary to the provisions hereof, the Board may, at its discretion, elect to terminate this Option.
7. NO STOCKHOLDER RIGHTS. The Optionee or other person entitled to exercise this Option shall have no rights or
privileges as a stockholder with respect to any Shares subject hereto until the Optionee or such person has become the holder of record of such Shares, and no adjustment (except such adjustments as
may be effected pursuant to the provisions of Section 4 hereof) shall be made for dividends or distributions of rights in respect of such Shares if the record date is prior to the date on which
the Optionee or such person becomes the holder of record.
8. CONDITIONS TO ISSUANCE OF SHARES. THE COMPANY'S OBLIGATION TO ISSUE SHARES OF ITS COMMON STOCK UPON EXERCISE OF THE
OPTION IS EXPRESSLY CONDITIONED UPON (A) THE COMPLETION BY THE COMPANY OF ANY REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES UNDER ANY STATE AND/OR FEDERAL LAW OR RULINGS OR REGULATIONS OF
ANY GOVERNMENT REGULATORY BODY; AND (B) THE MAKING OF SUCH INVESTMENT REPRESENTATIONS OR OTHER REPRESENTATIONS AND AGREEMENTS BY THE OPTIONEE OR ANY PERSON ENTITLED TO EXERCISE THE OPTION AS
THE BOARD DETERMINES, IN ITS SOLE DISCRETION, ARE NECESSARY OR ADVISABLE IN ORDER TO COMPLY WITH THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES.
SUCH REQUIRED REPRESENTATIONS AND AGREEMENTS MAY INCLUDE REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE, OR ANY OTHER PERSON ENTITLED TO EXERCISE THE OPTION (i) IS NOT PURCHASING SUCH SHARES
FOR DISTRIBUTION; AND (ii) AGREES TO HAVE PLACED UPON THE FACE AND REVERSE OF ANY CERTIFICATES FOR SUCH SHARES A LEGEND SETTING FORTH ANY REPRESENTATIONS AND AGREEMENTS WHICH HAVE BEEN GIVEN TO
THE BOARD OR A REFERENCE THERETO.
9. METHOD OF ACCEPTANCE. This Agreement is addressed to the Optionee in duplicate and shall not be effective until the
Optionee executes the acceptance below and returns one copy to the Company, thereby acknowledging that he has read and agreed to all the terms and conditions of this Agreement.