STOCK OPTION AGREEMENT
Exhibit 10.4
AGREEMENT made as of _______, 2015 (the “Grant Date”), between Presidential Realty Corporation, a Delaware corporation (the “Corporation”), and ________________ (the “Grantee”).
(a) The Corporation has the authority to enter into this Agreement. All action on the part of the Corporation necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Corporation hereunder and thereunder has been taken on or prior to the date hereof. This Agreement has been duly executed and delivered by the Corporation and constitutes the valid and binding agreement of the Corporation, enforceable against the Corporation in accordance with their terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
(b) The Class B Shares, when issued upon exercise of the Option will be duly authorized and validly issued, fully paid and nonassessable and, subject to the representations and warranties of the Grantee in Section 7 herein being true and correct, will have been issued in compliance with federal and state securities laws.
(a) The Grantee (i) has such knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of the investment in the Class B Shares; (ii) is capable of bearing the economic risks associated with the investment in the Class B Shares; (ii) has been provided the opportunity to ask questions and receive answers concerning the Corporation and to obtain any additional information which the Corporation possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished to it; and (iv) will acquire the Class B Stock for its own account and not with a view toward, or for resale in connection with, the sale or distribution thereof.
(b) The Grantee understands that the Option and the Class B Shares issuable upon exercise thereof are being offered and sold to it in reliance on specific exemptions from the registration requirements of the U.S. federal and state securities laws and that the Corporation is relying in part upon the truth and accuracy of, and the Grantee’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Grantee set forth herein in order to determine the availability of such exemptions and the eligibility of the Grantee to be granted the Options and acquire the Class B Shares.
(c) The Grantee understands that neither the Option nor the Class B Shares have been or are being registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or sold, assigned or transferred pursuant to an exemption from registration under the Securities Act. The Corporation is under no obligation to register the Shares or to comply with any exemption available for sale of the Shares without registration.
(d) The certificate or certificates representing the Class B Shares to be acquired upon exercise of the Option shall contain the following legend in addition to any other legends required by the Corporation’s Certificate of Incorporation:
“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT OR (II) THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
THE ACCUMULATION OF SHARES OF COMMON STOCK BY ANY PERSON, AS DEFINED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, IS RESTRICTED TO 9.2% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK WITHOUT REGARD TO CLASS. ANY TRANSFER WHICH CREATES AN ACCUMULATION IN EXCESS OF THAT AMOUNT VIOLATES THE CERTIFICATE OF INCORPORATION AND IS VOID. IF, NOTWITHSTANDING THE ABOVE, SUCH ACCUMULATION RESULTS, THE SHARES IN EXCESS OF 9.2% ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING POWER AND RECEIPT OF DIVIDENDS, AND MAY BE MADE SUBJECT TO PURCHASE BY THE COMPANY. FURTHER, SUCH PERSON MAY BE REQUIRED TO INDEMNIFY THE COMPANY AGAINST TAXES INCURRED AND OTHER LOSSES RESULTING FROM (1) LOSS OF ITS TAX QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST OR (2) BECOMING A PERSONAL HOLDING COMPANY”
(e) The Grantee has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement and is relying solely on such advisors and not on any statements or representations of the Corporation or any of its employees or agents.
(f) The Grantee understands that the Grantee (and not the Corporation) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.
(g) The Grantee agrees not to sell the Class B Shares issued pursuant to exercise of the Option for a period of one hundred and eighty (180) days from the Vesting Date.
To the Corporation: | 0000 Xxxxxxxx, Xxxxx 000 |
Xxx Xxxx, XX 00000 | |
To the Grantee: | As set forth on the signature page hereto. |
or to such other address or addresses of which notice in the same manner has previously been given. Any such notice shall be deemed to have been duly given or made as of the date delivered if delivered personally, or on the next business day if sent by overnight courier or when received if mailed by registered or certified mail, postage prepaid, return receipt requested, or on confirmation if by facsimile or other electronic means, in accordance with the foregoing provisions. Either party hereto may change the address to which notices hereunder may be given by providing the other party hereto with written notice of such change.
(a) This Agreement shall be construed in accordance with and governed by the Laws of the State of Delaware, without regard to the conflicts of Laws and rules thereof.
(b) Any dispute or disagreement between the Grantee and the Corporation with respect to any portion of this Agreement (excluding Exhibit A hereto) or its validity, construction, meaning, and the performance of the Grantee’s rights hereunder shall, unless the Corporation in its sole discretion determines otherwise, be settled by arbitration, at a location designated by the Corporation, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time. However, prior to submission to arbitration the parties will attempt to resolve any disputes or disagreements with the Corporation over this Agreement amicably and informally, in good faith, for a period not to exceed two weeks. Thereafter, the dispute or disagreement will be submitted to arbitration. At any time prior to a decision from the arbitrator(s) being rendered, the Grantee and the Corporation may resolve the dispute by settlement. The Grantee and the Corporation shall equally share the costs charged by the American Arbitration Association or its successor, but the Grantee and the Corporation shall otherwise be solely responsible for their own respective counsel fees and expenses. The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on the Grantee and the Corporation. Further, neither the Grantee nor the Corporation shall appeal any such award. Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and year first above written.
PRESIDENTIAL REALTY CORPORATION | ||
By: | ||
Name: | ||
Title: | ||
GRANTEE: | ||
By: | ||
Name: | ||
Address: | ||
EXHIBIT A
NOTICE OF EXERCISE OF STOCK OPTION
TO PURCHASE SHARES OF CLASS B COMMON STOCK OF
PRESIDENTIAL REALTY CORPORATION
Name | ||
Address | ||
Attn: | ||
Date |
Presidential Realty Corporation
000 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Chairman of the Board
Gentlemen:
Pursuant to the provisions of the Stock Option Agreement (“Option Agreement”) dated as of ____________, 2015, between Presidential Realty Corporation (“Corporation”) and the Undersigned, the Undersigned hereby elects to exercise options granted to the Undersigned to purchase ________ shares of Class B Common Stock, par value $0.10 per shares of the Corporation (the “Class B Stock”).
As soon as the Stock Certificate is registered in the name of the Undersigned, please deliver it to the Undersigned at the above address.
Very truly yours, | |
AGREED TO AND ACCEPTED BY:
PRESIDENTIAL REALTY CORPORATION
By:____________________________
Name: _________________________
Title:___________________________
Number of Shares Exercised: ____________
Number of Shares Remaining: ___________