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Exhibit 4
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT made as of this 19th day of November, 1998 between
Xxxxxx & Xxxxxx, Inc., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxx, an individual residing at 00 Xxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx 00000
(the "Optionee").
W I T N E S S E T H :
WHEREAS, the Company desires, in connection with the services
to be rendered by the Optionee and in connection with his employment with the
Subsidiaries, North Shore Capital Management Corp. and North Ridge Securities
Corp., to provide the Optionee with an opportunity to acquire Common Stock, par
value $.01 per share ("Common Stock"), of the Company on favorable terms and
thereby increase his proprietary interest in the progress and success of the
business of the Company,
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein set forth and other good and valuable consideration, the
Company and the Optionee hereby agree as follows:
1. Confirmation of Grant of Option. Pursuant to a
determination by the Board of Directors of the Company on November 19, 1998 (the
"Date of Grant"), the Company, subject to the terms of this Agreement, and the
performance by Optionee of Optionee's obligations, hereby confirms that the
Optionee has been granted under the Company's 1993 Joint Incentive and
NonQualified Stock Option Plan (the "Plan") effective September 14, 1993 as a
matter of separate inducement and agreement, and in addition to and not in lieu
of other compensation for services, the right to purchase(hereinafter referred
to as the "Option") a maximum aggregate of (omitted) shares (the "Shares") of
Common Stock of the Company on the terms and conditions set forth, subject to
adjustment as provided in Section 9 hereof, such Option intended to qualify as
an Incentive Stock Option under Section 422 of the Internal Revenue Code 1986,
as amended (the "Code").
2. Vesting of Option. The Option shall vest with regard to one
fifth of the shares subject to the Option on the first anniversary of the Date
of Grant, with regard to one fifth of the shares subject
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to the Option on the second anniversary of the Date of Grant, with regard to one
fifth of the shares subject to the Option on the third anniversary of the Date
of Grant, with regard to one fifth of the shares subject to the Option on the
fourth anniversary of the Date of Grant, and with regard to one fifth of the
shares subject to the Option on the fifth anniversary of the Date of Grant. In
the event that the Company is acquired by another person or entity, or the
Company sells all or substantially all of the Company's assets, or if any person
or entity or a group of persons and/or entities not now owning more than 10% of
the issued and outstanding Common Stock comes to own 40% of the issued and
outstanding Common Stock, the entire Option shall vest immediately.
3. Purchase Price. The purchase price of the shares of Common
Stock covered by this Option is $8.75 subject to adjustment as provided in
Section 9 hereof.
4. Exercise of Option.
(a) Options vesting hereunder shall become
exercisable immediately after the date of vesting as and to the extent vested in
accordance with Section 2.
(b) The Option may be exercised in integral multiples
of 1,000 shares or all options remaining hereunder subject to the Option by
notice and payment to the Company as provided in Sections 11 and 16 hereof.
5. Term of Option.
(a) The term of the Option shall be a period of Five
(5) years from the Date of Vesting, subject to earlier termination or
cancellation as provided herein.
(b) The holder of the Option will not have any rights
to dividends or any other rights of a stockholder with respect to any shares of
Common Stock subject to the Option until such shares have been issued to him (as
evidenced by the appropriate entry on the books of a duly authorized transfer
agent of the Company) provided that the date of issuance shall not be earlier
than the Closing Date (as hereinafter defined) with respect to such shares
pursuant to Section 11 hereof, upon purchase of such shares upon exercise of the
Option.
6. Non-transferability of Option. The Option shall not be
transferable otherwise than by will, or by the laws of descent and distribution,
and the Option may be exercised during
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the lifetime of the Optionee only by him. More particularly, but without
limiting the generality of the foregoing, the Option may not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way
(whether by operation of law or otherwise), and shall not be subject to
execution, attachment or other process. Any assignment, transfer, pledge,
hypothecation or other disposition of the Option attempted contrary to the
provisions of this Agreement, or any levy of execution, attachment or other
process attempted upon the Option, shall be null and void and without effect.
Any attempt to make such assignment, transfer, pledge, hypothecation or other
disposition of the Option or any attempt to make such levy of execution,
attachment or other process shall cause the Option to terminate immediately upon
the happening of any such event if the Board of Directors of the Company, at any
time, should, in its sole discretion, so elect, by written notice to the
Optionee or to the person or persons then entitled to exercise the Option under
the provisions hereof; provided, however, that any such termination of the
Option under the foregoing provisions of this section 6 will not prejudice any
rights or remedies that the Company or any affiliate or subsidiary thereof may
have under this Agreement or otherwise.
7. Exercise upon Cessation of Employment.
(a) If the Optionee ceases to serve as an employee or
director of the Company or any affiliate or subsidiary thereof by reason of his
discharge for cause, as determined in good faith by the Board of Directors of
the Company, or by the reason of the voluntary resignation of the Optionee, then
the Option shall forthwith terminate, but vested options may be exercised for a
period of 30 days after termination. If, however, the Optionee for any other
reason ceases to serve, then the options vested at the date of such cessation
may, subject to the provisions of Section 6 hereof, be exercised to the same
extent the Optionee would have been entitled under Sections 2 & 4 hereof to
exercise the vested options hereunder. In any event the Option may not be
exercised after the expiration of the term provided in Section 5 hereof. Any
Option or part thereof not vested on the date of such cessation shall forthwith
terminate.
(b) The Option shall not be affected by any change of
duties of the Optionee so long as he continues to serve as an employee or
director of the Company or any affiliated corporation or subsidiary thereof. If
the Optionee is granted a temporary leave of absence, such leave of absence will
be deemed a continuation of his service to the Company for the purposes of this
Agreement only if and so long as the Company in its sole discretion consents
thereto. Retirement, whether or not pursuant to any retirement or pension plan
of the Company or any
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subsidiary thereof, shall be deemed to be a cessation of service with written
consent for all purposes of this Agreement.
(c) Any termination of this Option by reason of
cessation of service, whether under this Section 7 or Section 8, shall be
without prejudice to any rights or remedies that the Company or any affiliated
corporation or subsidiary thereof may have against the Optionee hereunder or
otherwise.
8. Exercise upon Death or Disability.
(a) If the Optionee dies while he is serving as an
employee or director of the Company or any affiliated corporation or any
subsidiary thereof or within three months after he has ceased such service
(provided such cessation was not due to the Optionee's having resigned
voluntarily or been discharged for cause), during which period he would have
been entitled to exercise the Option under the provisions of Section 7 hereof,
the Option may, subject to the provisions of Section 6 hereof, be exercised to
the extent the Optionee would have been entitled under Section 2 hereof to
exercise the Option on the day preceding the date of his death, by the estate of
the Optionee or by the person or persons (including the estate of any such
person or persons who have died) who acquire the right to exercise the Option by
bequest or inheritance at any time within the period ending one year after the
death of the Optionee, at the end of which period the Options shall terminate.
In any event the Option may not be exercised after the expiration of the term
provided in Section 5 hereof.
(b) If the service of the Optionee for the Company or
any affiliated corporation or any subsidiary thereof is terminated by reason of
"disability", the Option may, subject to the provisions of Section 6 hereof, be
exercised to the extent the Optionee would have been entitled under Section 2
hereof to exercise the Options on the day preceding the date of his
"disability," at any time within the period ending one year after the
"disability" of the Optionee, at the end of which period the Option shall
terminate. In any event the Options may not be exercised after the expiration of
the term provided in Section 5 hereof.
(c) A temporary disability may in the sole discretion
of the Board of Directors or the Committee, as the case may be, be deemed
hereunder to be a continuation of service for the Company if such disability
lasts less than 90 days, or, in the case of a disability longer than 90 days, if
the Company in its sole discretion contractually guarantees the Optionee's right
to return to work after such disability.
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9. Adjustments. In the event of a stock dividend, stock
split-up, share combination, exchange of shares, recapitalization, merger,
consolidation, acquisition or disposition of property or shares, reorganization,
liquidation, stock sale or option grant below market price or the exercise price
hereof, or other similar changes or transactions of or by the Company after the
Date of Grant, the Board of Directors of the Company shall make (or shall
undertake to have the Board of Directors of any corporation that merges with, or
acquires the assets of, the Company make) such adjustment of the number or class
of shares then covered by the Options, or of the option price, or both, as it
shall, in its reasonable discretion, deem appropriate to give proper effect to
such event; provided, however, that no such adjustment shall be made so as to
constitute a modification, extension or renewal of the Options within the
meaning of Section 424(h) of the Code.
10. Registration. The shares of Common Stock subject hereto
and issuable upon the exercise hereof may not be registered under the Securities
Act of 1933, as amended (the "Act"), and, if required upon the request of
counsel to the Company, the Optionee shall give a representation as to his
investment intent and other matters with respect to such shares prior to their
issuance as set forth in Section 11 hereof.
11. Method of Exercise of Option.
(a) Subject to the terms and conditions of this
Agreement, the Option shall be exercisable by notice and payment to the Company
in accordance with the procedure prescribed herein. Each notice shall:
(i) state the election to exercise the Option and the
number of shares in respect of which it is being exercised;
(ii) contain a representation and agreement as to
investment intent and other matters, if required by counsel to
the Company with respect to such shares, in a form
satisfactory to counsel for the Company; and
(iii) be signed by the person or persons entitled to
exercise the Options and, if the Options are being exercised
by any person or persons other than the Optionee, be
accompanied by proof, satisfactory to counsel of the Company,
of the right of such person or persons to exercise the
Options.
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(b) Upon receipt of such notice, the Company shall
specify, by written notice to the Optionee, a date and time (such date and time
being herein called the "Closing Date") and place for payment of the full
purchase price of such shares. The closing date shall not be more than fifteen
days from the date the notice of exercise is received by the Company unless
another date is agreed upon by the Company and the Optionee or is required upon
advise of counsel of the Company in order to meet the requirements of Section 12
hereof.
(c) Payment of the purchase price of any shares of
Common Stock, in respect of which the Option shall be exercised, shall be made
by the Optionee at a place specified by the Company on or before the Closing
Date by delivering to the Company a certified or bank cashier's check payable to
the order of the Company. The Option shall be deemed to have been exercised with
respect to any particular shares of Common Stock, if, and only if, the preceding
provisions of this Section 11 and the provisions of Section 12 hereof shall have
been complied with, in which event the Option shall be deemed to have been
exercised on the Closing Date. Anything in this agreement to the contrary
notwithstanding, any notice of exercise given pursuant to the provisions of this
Section 11 shall be void and of no effect if all the preceding provisions of
this Section 11 and the provisions of Section 12 shall not have been complied
with. The certificate or certificates for shares of Common Stock as to which the
Option shall be exercised shall be registered in the name of the Optionee or, if
the Optionee so requests in the notice exercising the Option, shall be
registered in the name of the Optionee and another person jointly, with right of
survivorship, and shall be delivered on the Closing Date to the Optionee at the
place specified for the closing, but only upon compliance with all of the
provisions of this Agreement. If the Optionee fails to accept delivery of and
pay for all or any part of the number of shares specified in such notice upon
tender or delivery thereof on the Closing date, his right to exercise the Option
with respect to such undelivered shares may be terminated in the sole discretion
of the Board of Directors of the Company. The Option may be exercised only with
respect to full shares.
(d) Cashless Exercise. Anything in this Agreement to
the contrary notwithstanding, the Optionee may pay the Exercise Price for the
Option by the surrender to the Company of a portion of the exercisable but
unexercised Option covering those Shares issued upon exercise (the "Option
Stock" ) having a Value (hereinafter defined) at the close of trading on the
trading day on which the Option is exercised (or the next trading day if
exercised on a nontrading day) equal to the product of the Exercise Price
multiplied by the shares of Option Stock with respect to which the Option shall
be exercised. The portion surrendered and the portion exercised may not exceed
in the
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aggregate the exercisable but unexercised Option at the time of exercise.
"Value" means the product of the difference of the Market Price (hereinafter
defined) minus the Exercise Price multiplied by the number of shares of Option
Stock issuable with respect to the portion of the Option being surrendered.
"Market Price" means the last reported per share sale price of the Common Stock
as officially reported by the principal exchange or stock market on which the
Common Stock is listed or admitted to trading, or, if none, the OTC Bulletin
Board, or if not so listed, as determined in good faith by resolution of the
Board of Directors of the Company. If payment is made under this Section 11(d),
exercise of the Option shall be effected as set forth in Section 4 above and
this Section 11, but the exercise form shall specify that payment shall be made
under this Section 11(d) and that the Option is being exercised for either all
of the Option Stock available after surrender or all of such Option Stock up to
a specified number of shares of Option Stock.
12. Approval of Counsel. The exercise of the Option and the
issuance and delivery of shares of Common Stock pursuant thereto shall be
subject to approval by the Company's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Act and the rules
and regulations thereunder, and the requirements of any stock exchange or market
upon which the Common Stock may then be listed.
13. Resale of Common Stock.
(a) Upon any sale or transfer of the Common Stock
purchased upon exercise of the Option, unless such shares are registered under
the Act, the Optionee shall deliver to the Company an opinion of counsel
satisfactory to the Company to the effect that such common stock may be sold
without violating Section 5 of said Act.
(b) Unless registered under the Act, the Common Stock
issued upon exercise of the Option shall bear the following legend if required
by counsel for the Company:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE FIRST
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY, SUCH REGISTRATION IS
NOT REQUIRED.
14. Reservation of Shares. The Company shall at all times
during the term of the Option reserve and keep available
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such number of shares of the class of stock then subject to the Option as will
be sufficient to satisfy the requirements of this Agreement.
15. Limitation of Action. The Optionee and the Company each
acknowledge that every right of action accruing to him or it, as the case may
be, and arising out of or in connection with this Agreement against the Company
or an affiliated corporation or subsidiary thereof, on the one hand, or the
Optionee, on the other hand, shall, irrespective of the place where an action
may be brought, cease and be barred by the expiration of three years from the
date of the act or omission in respect of which such right of action arises.
16. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person or by certified or registered mail, return
receipt requested, or by nationally recognized overnight courier service
providing for a signed return receipt, to the proper address. All notices to the
Company shall be addressed to it at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, XX
00000, with a copy to Akabas & Xxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx XX 00000,
Attn: Xxxx X. Xxxxxx, Esq. and to Steinberg, Fineo, Xxxxxx & Burlany, P.C., 0000
Xxxxxxxx Xxx., Xxxxx 000, Xxxxxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx Xxxxxxxxx,
Esq. All notices to the Optionee shall be addressed to the Optionee at the
Optionee's address above specified. Anyone to whom a notice may be given under
this Agreement may designate a new address by notice to that effect, effective
upon actual receipt thereof.
17. Benefits of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor and assign of the Company. All
obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be binding upon the Optionee's heirs, legal
representatives and successors.
18. Severability. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal or unenforceable, such
illegality or unenforceability shall not affect the validity and enforceability
of the remaining legal and enforceable provisions hereof, which shall be
constructed as if such illegal or unenforceable provision or provisions had not
been inserted.
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19. Governing Law. This Agreement will be construed
and governed in accordance with the laws of the State of New
York.
20. No Implied Employment Agreement. This Agreement shall not
be construed as changing the Optionee's status as an "at will" employee or as
giving the Optionee any right to be employed by the Company or any of its
subsidiaries or affiliates or interfering in any way with the right of the
Company or any of its subsidiaries or affiliates from terminating the employment
of the Optionee, subject to any written employment agreement in effect between
the Company and the Optionee.
21. Plan Governs Conflicts. 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year first above written.
XXXXXX & CIOCIA, INC.
By: \s\Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President
\s\ Xxxxxx X. Xxxx
XXXXXX X. XXXX
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OPTION EXERCISE FORM
The undersigned hereby irrevocably elects to exercise
the within Option to the extent of purchasing shares of Common
Stock of XXXXXX & XXXXXX, INC. and hereby makes payment of $
in cash or surrender of Option Value under Section 11(d) ,
in payment therefor.
Date Signature
Signature, if jointly held
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the registered holder of the within Option)
Name
(Please typewrite or print in block letters)
Address
Social Security or Taxpayer Identification Number
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