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EXHIBIT 10.3
STOCK OPTION AGREEMENT
AGREEMENT made as of the 7th day of May 2001, by and between
LADENBURG XXXXXXXX FINANCIAL SERVICES INC., a Florida corporation (the
"Company"), and __________ (the "Director").
WHEREAS, on May 7, 2001 (the "Grant Date"), pursuant to the
terms and conditions of the Company's 1999 Performance Equity Plan (the "Plan"),
the Compensation Committee and the Board of Directors of the Company authorized
the grant to the Director of an option (the "Option") to purchase an aggregate
of 20,000 shares of the authorized but unissued Common Stock of the Company,
$.0001 par value (the "Common Stock"), conditioned upon the Director's
acceptance thereof upon the terms and conditions set forth in this Agreement and
subject to the terms of the Plan; and
WHEREAS, the Director desires to acquire the Option on the
terms and conditions set forth in this Agreement and subject to the terms of the
Plan;
IT IS AGREED:
1. GRANT OF STOCK OPTION. The Company hereby grants the
Director the Option to purchase all or any part of an aggregate of 20,000 shares
of Common Stock (the "Option Shares") on the terms and conditions set forth
herein and subject to the provisions of the Plan.
2. NON-INCENTIVE STOCK OPTION. The Option represented hereby
is not intended to be an option which qualifies as an "Incentive Stock Option"
under Section 422 of the Internal Revenue Code of 1986, as amended.
3. EXERCISE PRICE. The exercise price of the Option shall be
$3.05 per share, subject to adjustment as hereinafter provided.
4. EXERCISABILITY. This Option is exercisable, subject to the
terms and conditions of the Plan, on and after May 7, 2002. After the Option
becomes exercisable, it shall remain exercisable except as otherwise provided
herein, until the close of business on May 7, 2011 (the "Exercise Period").
5. TERMINATION DUE TO DEATH. Upon the death of the Director,
the portion of the Option, if any, that was exercisable as of the date of death
may thereafter be exercised by the legal representative of the estate or by the
legatee of the Director under the will of the Director, for a period of one year
from the date of such death or until the expiration of the Exercise Period,
whichever period is shorter. The portion of the Option, if any, that was not
exercisable as of the date of death shall immediately terminate upon death.
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6. WITHHOLDING TAX. Not later than the date as of which an
amount first becomes includable in the gross income of the Director for Federal
income tax purposes with respect to the Option, the Director shall pay to the
Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state and local taxes of any kind required by law to be
withheld or paid with respect to such amount. The obligations of the Company
under the Plan and pursuant to this Agreement shall be conditional upon such
payment or arrangements with the Company and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Director from the Company.
7. ADJUSTMENTS. In the event of any merger, reorganization,
consolidation, recapitalization, dividend (other than cash dividend), stock
split, reverse stock split, or other change in corporate structure affecting the
number of issued shares of Common Stock, the Company shall proportionally adjust
the number and kind of Option Shares and the exercise price of the Option in
order to prevent the dilution or enlargement of the Director's proportionate
interest in the Company and her rights hereunder, provided that the number of
Option Shares shall always be a whole number.
8. METHOD OF EXERCISE.
8.1. NOTICE TO THE COMPANY. The Option shall be
exercised in whole or in part by written notice in substantially the form
attached hereto as Exhibit A directed to the Company at its principal place of
business accompanied by full payment as hereinafter provided of the exercise
price for the number of Option Shares specified in the notice.
8.2. DELIVERY OF OPTION SHARES. The Company shall
deliver a certificate for the Option Shares to the Director as soon as
practicable after payment therefor.
8.3. PAYMENT OF PURCHASE PRICE.
8.3.1. CASH PAYMENT. The Director shall make
cash payments by wire transfer, certified or bank check or personal check, in
each case payable to the order of the Company; the Company shall not be required
to deliver certificates for Option Shares until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.
8.3.2. CASHLESS PAYMENT. At the election of
the Director, the purchase price for any or all of the Option Shares to be
acquired may be paid by the surrender of shares of Common Stock of the Company
held by or for the account of the Director with a "fair market value" equal to
the purchase price multiplied by the number of Option Shares to be purchased.
"Fair market value" of the Common Stock means, as of the exercise date: (i) if
the Common Stock is listed on a national securities exchange or quoted on the
Nasdaq National Market or Nasdaq SmallCap Market, the last sale price of the
Common Stock in the principal trading market for the Common Stock on the last
day trading day preceding such date, as reported by the exchange or Nasdaq, as
the case may be; (ii) if the Common Stock is not listed on a national securities
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exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but
is traded in the over-the-counter market, the closing bid price of the Common
Stock on the last trading day preceding such date for which such quotations are
reported by the National Quotation Bureau, Incorporated or similar publisher of
such quotations; and (iii) if the fair market value of the Common Stock cannot
be determined pursuant to clause (i) or (ii) above, such price as the Company
shall determine, in good faith. The Company shall issue a certificate or
certificates evidencing the Option Shares as soon as practicable after the
notice and payment is received. The certificate or certificates evidencing the
Option Shares shall be registered in the name of the person or persons so
exercising the Option.
8.3.3. PAYMENT PRICE OF WITHHOLDING TAX. Any
required withholding tax may be paid in cash or with Common Stock in accordance
with Sections 8.3.1. and 8.3.2.
8.3.4. EXCHANGE ACT COMPLIANCE.
Notwithstanding the foregoing, the Company shall have the right to reject
payment in the form of Common Stock if in the opinion of counsel for the
Company, (i) it could result in an event of "recapture" under Section 16(b) of
the Securities Exchange Act of 1934, as amended ("Exchange Act"); (ii) such
shares of Common Stock may not be sold or transferred to the Company; or (iii)
such transfer could create legal difficulties for the Company.
9. NONASSIGNABILITY. The Option shall not be assignable or
transferable except by will or by the laws of descent and distribution in the
event of the death of the Director. No transfer of the Option by the Director by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of the will and such other evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.
10. COMPANY REPRESENTATIONS. The Company hereby represents and
warrants to the Director that:
(i) the Company, by appropriate and all required
action, is duly authorized to enter into this Agreement and
consummate all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by
the Company to the Director in accordance with the terms and
conditions hereof, will be duly and validly issued and fully
paid and non-assessable.
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11. DIRECTOR REPRESENTATIONS. The Director hereby represents
and warrants to the Company that
(i) he is acquiring the Option and shall acquire the
Option Shares for his own account and not with a view towards the
distribution thereof;
(ii) he has received a copy of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 12 months and all reports
issued by the Company to its stockholders;
(iii) he understands that he must bear the economic
risk of the investment in the Option Shares, which cannot be sold by
him or her unless they are registered under the Securities Act of 1933,
as amended (the "1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no obligation to register the
Option Shares for sale under the 1933 Act;
(iv) in his position with the Company, he has had
both the opportunity to ask questions and receive answers from the
officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder
and to obtain any additional information to the extent the Company
possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(v) he is aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the 1933 Act or an
exemption therefrom as provided herein; and
(vi) The certificates evidencing the Option Shares
shall bear the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of May 7, 2001, a copy of which is on file with
the Company, and may not be transferred, pledged or
disposed of except in accordance with the terms and
conditions thereof."
12. RESTRICTION ON TRANSFER OF OPTION SHARES. Anything in this
Agreement to the contrary notwithstanding, the Director hereby agrees that he or
she shall not sell, transfer by any means or otherwise dispose of the Option
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Shares acquired by him or her without registration under the 1933 Act, or in the
event that they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Director has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
13. MISCELLANEOUS.
13.1. NOTICES. All notices, requests, deliveries,
payments, demands and other communications which are required or permitted to be
given under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier,
return receipt requested, postage prepaid to the Company at its principal
executive office and to the Director at his address set forth below, or to such
other address as either party shall have specified by notice in writing to the
other. Notice shall be deemed duly given hereunder when delivered or mailed as
provided herein.
13.2. PLAN PARAMOUNT; CONFLICTS WITH PLAN. This
Agreement and the Option shall, in all respects, be subject to the terms and
conditions of the Plan, whether or not stated herein. In the event of a conflict
between the provisions of the Plan and the provisions of this Agreement, the
provisions of the Plan shall in all respects be controlling.
13.3. SHAREHOLDER RIGHTS. The Director shall not have
any of the rights of a shareholder with respect to the Option Shares until such
shares have been issued after the due exercise of the Option.
13.4. WAIVER. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other or subsequent breach.
13.5. ENTIRE AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof. This Agreement may not be amended except by writing executed by the
Director and the Company.
13.6. BINDING EFFECT; SUCCESSORS. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and, to the
extent not prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
13.7. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York (without
regard to choice of law provisions).
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13.8. HEADINGS. The headings contained herein are for
the sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.
Director: Ladenburg Xxxxxxxx Financial Services Inc.
By:
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Xxxxxx X. Xxxxx
President and Chief Executive Officer
Address of Director:
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
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DATE
Ladenburg Xxxxxxxx Financial Services Inc.
Attention: Board of Directors
Re: PURCHASE OF OPTION SHARES
Gentlemen:
In accordance with my Stock Option Agreement dated as of May 7,
2001 ("Agreement") with Ladenburg Xxxxxxxx Financial Services Inc. (the
"Company"), I hereby irrevocably elect to exercise the right to purchase
_________ shares of the Company's common stock, par value $.0001 per share
("Common Stock"), which are being purchased for investment and not for resale.
As payment for my shares, enclosed is (check and complete
applicable box[es]):
[ ] a [personal check] [certified check] [bank check] payable to the
order of "Ladenburg Xxxxxxxx Financial Services Inc." in the sum of
$_________;
[ ] confirmation of wire transfer in the amount of $_____________;
and/or
[ ] [IF PRIOR APPROVAL OF THE COMPANY HAS BEEN OBTAINED,] certificate
for ____ shares of the Company's Common Stock, free and clear of
any encumbrances, duly endorsed, having a Fair Market Value (as
such term is defined in the Company's 1999 Performance Equity Plan)
of $_________.
I hereby represent, warrant to, and agree with, the Company that
(i) I am acquiring the Option Shares for my own account and
not with a view towards the distribution thereof;
(ii) I have received a copy of all reports and documents
required to be filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended, within the last 12 months and all
reports issued by the Company to its stockholders;
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(iii) I understand that I must bear the economic risk of the
investment in the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 (the "1933 Act") or an exemption
therefrom is available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the 1933 Act;
(iv) in my position with the Company, I have had both the
opportunity to ask questions and receive answers from the officers and directors
of the Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional information
to the extent the Company possesses or may possess such information or can
acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;
(v) I am aware that the Company shall place stop transfer
orders with its transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom as provided
herein;
(vi) my rights with respect to the Option Shares shall, in all
respects, be subject to the terms and conditions of this Company's 1999
Performance Equity Plan and this Agreement; and
(vii) the certificates evidencing the Option Shares shall bear
the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered under
the Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated as of
May 7, 2001, a copy of which is on file with the Company,
and may not be transferred, pledged or disposed of except
in accordance with the terms and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature) (Address)
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(Print Name) (Address)
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(Social Security Number)
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