EXHIBIT 4.3
FREMONT GENERAL CORPORATION
2006 PERFORMANCE INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Option Agreement") dated
_____________________ by and between Fremont General Corporation, a Nevada
corporation (the "Corporation"), and ___________________________ (the "Grantee")
evidences the nonqualified stock option (the "Option") granted by the
Corporation to the Grantee as to the number of shares of the Corporation's
Common Stock first set forth below.
Number of Shares of Common Stock: 1 ______ Award Date: ____________________
Exercise Price per Share: 1 $_______ Expiration Date: 1, 2 __________
VESTING 1, 2 [The Option shall become vested as to 25% of the total number of
shares of Common Stock subject to the Option on the first anniversary of the
Award Date. The remaining 75% of the total number of shares of Common Stock
subject to the Option shall become vested in 3 substantially equal annual
installments, beginning on the 24 month anniversary of the Award Date.] Specific
terms of vesting will be set by Administrator at the time of grant.
The Option is granted under the Fremont General Corporation 2006
Performance Incentive Plan (the "Plan") and subject to the Terms and Conditions
of Nonqualified Stock Option (the "Terms") attached to this Option Agreement
(incorporated herein by this reference) and to the Plan. The Option has been
granted to the Grantee in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to the Grantee. Capitalized terms
are defined in the Plan if not defined herein. The parties agree to the terms of
the Option set forth herein. The Grantee acknowledges receipt of a copy of the
Terms, the Plan and the Prospectus for the Plan.
"GRANTEE" FREMONT GENERAL CORPORATION
a Nevada corporation
________________________________ By:_________________________________
Signature
Print Name:_________________________
________________________________ Title: _____________________________
Print Name
CONSENT OF SPOUSE
In consideration of the Corporation's execution of this Option Agreement,
the undersigned spouse of the Grantee agrees to be bound by all of the terms and
provisions hereof and of the Plan.
__________________________________ ___________________________________
Signature of Spouse Date
__________________________
1 Subject to adjustment under Section 7.1 of the Plan.
2 Subject to early termination under Section 4 of the Terms and Section 7.4
of the Plan.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. VESTING; LIMITS ON EXERCISE; INCENTIVE STOCK OPTION STATUS.
The Option shall vest and become exercisable in percentage installments of
the aggregate number of shares subject to the Option as set forth on the cover
page of this Option Agreement. The Option may be exercised only to the extent
the Option is vested and exercisable.
o CUMULATIVE EXERCISABILITY. To the extent that the Option is
vested and exercisable, the Grantee has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the expiration or earlier termination of
the Option.
o NO FRACTIONAL SHARES. Fractional share interests shall be
disregarded, but may be cumulated.
o MINIMUM EXERCISE. No fewer than 1001 shares of Common Stock may
be purchased at any one time, unless the number purchased is the
total number at the time exercisable under the Option.
o NONQUALIFIED STOCK OPTION. The Option is a nonqualified stock
option and is not, and shall not be, an incentive stock option
within the meaning of Section 422 of the Code.
2. CONTINUANCE OF EMPLOYMENT/SERVICE REQUIRED; NO EMPLOYMENT/SERVICE COMMITMENT.
The vesting schedule requires continued employment or service through each
applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option
Agreement. Employment or service for only a portion of the vesting period, even
if a substantial portion, will not entitle the Grantee to any proportionate
vesting or avoid or mitigate a termination of rights and benefits upon or
following a termination of employment or services as provided in Section 4 below
or under the Plan.
Nothing contained in this Option Agreement or the Plan constitutes a
continued employment or service commitment by the Corporation or any of its
Subsidiaries, affects the Grantee's status, if he or she is an employee, as an
employee at will who is subject to termination without cause, confers upon the
Grantee any right to remain employed by or in service to the Corporation or any
Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such employment or service, or affects the
right of the Corporation or any Subsidiary to increase or decrease the Grantee's
other compensation.
3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of the
Corporation (or such other person as the Administrator may require pursuant to
such administrative exercise procedures as the Administrator may implement from
time to time) of:
o a written notice stating the number of shares of Common Stock to
be purchased pursuant to the Option or by the completion of such
other administrative exercise procedures as the Administrator may
require from time to time;
o payment in full for the Exercise Price of the shares to be
purchased in cash, check or by electronic funds transfer to the
Corporation, or (subject to compliance with all applicable laws,
rules, regulations and listing requirements and further subject
to such rules as the Administrator may adopt as to any non-cash
payment) in shares of Common Stock already owned by the Grantee,
valued at their fair market value on the exercise date, provided,
however, that any shares initially acquired upon exercise of a
stock option or otherwise from the Corporation must have been
owned by the Grantee for at least six (6) months before the date
of such exercise;
o any written statements or agreements required pursuant to Section
8.1 of the Plan; and
o satisfaction of the tax withholding provisions of Section 8.5 of
the Plan.
The Administrator also may, but is not required to, authorize a non-cash payment
alternative by notice and third party payment in such manner as may be
authorized by the Administrator.
4. EARLY TERMINATION OF OPTION.
4.1 Possible Termination of Option upon Change in Control. The Option is
subject to termination in connection with a Change in Control Event or certain
similar reorganization events as provided in Section 7.4 of the Plan.
4.2 Termination of Option upon a Termination of Grantee's Employment or
Services. Subject to earlier termination on the Expiration Date of the Option or
pursuant to Section 4.1 above, if the Grantee ceases to be employed by or ceases
to provide services to the Corporation or a Subsidiary, the following rules
shall apply (the last day that the Grantee is employed by or provides services
to the Corporation or a Subsidiary is referred to as the Grantee's "Severance
Date"):
o other than as expressly provided below in this Section 4.2, (a)
the Grantee will have until the date that is 90 days after his or
her Severance Date to exercise the Option (or portion thereof) to
the extent that it was vested on the Severance Date, (b) the
Option, to the extent not vested on the Severance Date, shall
terminate on the Severance Date, and (c) the Option, to the
extent exercisable for the 90-day period following the Severance
Date and not exercised during such period, shall terminate at the
close of business on the last day of the 90-day period;
o if the termination of the Grantee's employment or services is the
result of the Grantee's death or Disability (as defined below),
(a) the Grantee (or his beneficiary or personal representative,
as the case may be) will have until the date that is 12 months
after the Grantee's Severance Date to exercise the Option, (b)
the Option, to the extent not vested on the Severance Date, shall
terminate on the Severance Date, and (c) the Option, to the
extent exercisable for the 12-month period following the
Severance Date and not exercised during such period, shall
terminate at the close of business on the last day of the
12-month period;
o if the Grantee's employment or services are terminated by the
Corporation or a Subsidiary for Cause (as defined below), the
Option (whether vested or not) shall terminate on the Severance
Date.
For purposes of the Option, "Disability" means a "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code or as otherwise
determined by the Administrator).
For purposes of the Option, "Cause" means that the Grantee:
(1) has been negligent in the discharge of his or her duties to the
Corporation or any of its Subsidiaries, has refused to perform stated
or assigned duties or is incompetent in or (other than by reason of a
disability or analogous condition) incapable of performing those
duties;
(2) has been dishonest or committed or engaged in an act of theft,
embezzlement or fraud, a breach of confidentiality, an unauthorized
disclosure or use of inside information, customer lists, trade secrets
or other confidential information; has breached a fiduciary duty, or
willfully and materially violated any other duty, law, rule,
regulation or policy of the Corporation, any of its Subsidiaries or
any affiliate of the Corporation or any of its Subsidiaries; or has
been convicted of a felony or misdemeanor (other than minor traffic
violations or similar offenses);
(3) has materially breached any of the provisions of any agreement with
the Corporation, any of its Subsidiaries or any affiliate of the
Corporation or any of its Subsidiaries; or
(4) has engaged in unfair competition with, or otherwise acted
intentionally in a manner injurious to the reputation, business or
assets of, the Corporation, any of its Subsidiaries or any affiliate
of the Corporation or any of its Subsidiaries; has improperly induced
a vendor or customer to break or terminate any contract with the
Corporation, any of its Subsidiaries or any affiliate of the
Corporation or any of its Subsidiaries; or has induced a principal for
whom the Corporation, any of its Subsidiaries or any affiliate of the
Corporation or any of its Subsidiaries acts as agent to terminate such
agency relationship.
In all events the Option is subject to earlier termination on the
Expiration Date of the Option or as contemplated by Section 4.1. The
Administrator shall be the sole judge of whether the Grantee continues to render
employment or services for purposes of this Option Agreement.
5. NON-TRANSFERABILITY.
The Option and any other rights of the Grantee under this Option Agreement
or the Plan are nontransferable and exercisable only by the Grantee, except as
set forth in Section 5.5 of the Plan.
6. NOTICES.
Any notice to be given under the terms of this Option Agreement shall be in
writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Grantee at the address last reflected on
the Corporation's payroll records, or at such other address as either party may
hereafter designate in writing to the other. Any such notice shall be delivered
in person or shall be enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government. Any such notice shall be given only
when received, but if the Grantee is no longer employed by or providing services
to the Corporation or a Subsidiary, shall be deemed to have been duly given five
business days after the date mailed in accordance with the foregoing provisions
of this Section 6.
7. PLAN.
The Option and all rights of the Grantee under this Option Agreement
are subject to the terms and conditions of the Plan, incorporated herein by this
reference. The Grantee agrees to be bound by the terms of the Plan and this
Option Agreement (including these Terms). The Grantee acknowledges reading and
understanding the Plan, the Prospectus for the Plan, and this Option Agreement.
In the event of a conflict or inconsistency between the terms and condition of
this Option Agreement and of the Plan, the terms and conditions of the Plan
shall govern. Unless otherwise expressly provided in other sections of this
Option Agreement, provisions of the Plan that confer discretionary authority on
the Board or the Administrator do not and shall not be deemed to create any
rights in the Grantee unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Board or the Administrator so conferred
by appropriate action of the Board or the Administrator under the Plan after the
date hereof.
8. ENTIRE AGREEMENT.
This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 8.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
9. GOVERNING LAW.
This Option Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Nevada without regard to conflict of
law principles thereunder.
10. EFFECT OF THIS AGREEMENT.
Subject to the Corporation's right to terminate the Option pursuant to
Section 7.4 of the Plan, this Option Agreement shall be assumed by, be binding
upon and inure to the benefit of any successor or successors to the Corporation.
11. COUNTERPARTS.
This Option Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
12. SECTION HEADINGS.
The section headings of this Option Agreement are for convenience of
reference only and shall not be deemed to alter or affect any provision hereof.
