STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT (the "Agreement") is made and entered into
this 15th day of July 1999, by and between JWGenesis Financial Corp., a Florida
corporation (the "Company"), and Xxxx Xxxxx (the "Optionee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Employment Agreement dated as of July
15, 1999, by and between the Company and the Optionee (the "Employment
Agreement") the Company expects (and desires to motivate) Optionee to provide
valuable services to the Company that will enhance the value of the Company for
its Stockholders; and
WHEREAS, in consideration of such services, the Company has approved
the grant of an option to purchase shares of the Company's common stock, $.001
par value ("Common Stock"), to the Optionee, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings contained herein, and other good
and valuable consideration, the parties hereto hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions of the
Employment Agreement and this Agreement, the Company hereby grants to the
Optionee the right and option (the "Option") to purchase four hundred and fifty
thousand (450,000) shares of Common Stock (the "Shares"), exercisable in
accordance with the provisions of paragraph 2 hereof. The term of this Option is
five (5) years from the date first above written.
2. OPTION PRICE; EXERCISE OF OPTION.
(a) OPTION PRICE. The purchase price of each Share subject to
this Option shall be $13.40, subject to adjustment as provided in
paragraph 4.
(b) VESTING. This Option is fully vested as to all Shares as
of the date of grant.
(c) MANNER OF EXERCISE. This Option may be exercised by
delivering written notice of exercise to the Secretary of the Company,
in person, or by registered mail, postage prepaid, addressed to the
attention of the Secretary of the Company at the location at which the
Company then maintains its principal office, and if so mailed, the date
of mailing will be considered the date of exercise. Such notice shall
be in substantially the form attached hereto as Appendix A and shall be
accompanied by payment in full of the total purchase price for the
Shares being purchased. The Company, in the event of exercise by an
authorized person other than the Optionee, may require proof of the
right of such person to exercise this Option.
(d) PERSON WHO MAY EXERCISE OPTION. During the lifetime of the
Optionee, this Option shall be exercisable only by the Optionee and his
permitted assigns, or if the Optionee is disabled, by his duly
appointed guardian or legal representative on the Optionee's behalf.
Upon the death of the Optionee, this Option may be exercised by the
Optionee's legal representative or by a person who receives the right
to exercise this Option under the Optionee's will or by the applicable
laws of descent and distribution.
3. TRANSFERABILITY. This Agreement, the Option and all rights
hereunder shall not be transferable or assignable by the Optionee or by
any other person entitled hereunder to exercise any such rights without
the express prior written consent of the Company. The Company may
condition any such consent upon receipt of satisfactory evidence of
compliance with any applicable securities laws and may require any
transferee to enter into a new option agreement substantially in the
form of this Agreement to reflect the outstanding portion of the Option
to be held by such transferee.
4. ADJUSTMENT OF SHARES.
(a) Provision for Conversion in Case of Merger, etc. In the
event of an exchange of the then outstanding Common Stock in connection
with a merger, consolidation, or other reorganization of the Company,
or a sale by the Company of all or a portion of its assets, for cash or
for a different number or class of stock or other securities of the
Company or for shares of the stock or other securities of any other
company, then the number and class of stock or other securities that
shall be subject to this Option and the purchase price that must be
paid thereafter upon exercise of this Option shall be appropriately
adjusted by the Board of Directors of the Company in its good faith
discretion to reflect such event.
(b) Adjustment for Change in Capital Stock. In the event the
Company subdivides its outstanding shares of Common Stock into a
greater number of shares or combines its outstanding shares of Common
Stock into a smaller number of shares, then the number of Shares that
shall be subject to this Option and the purchase price that must be
paid thereafter upon exercise of this Option shall be appropriately
adjusted by the Board of Directors of the Company in its good faith
discretion to reflect such event.
5. INVESTMENT REPRESENTATIONS AND AGREEMENTS. The Optionee hereby
represents, warrants and agrees that, if the Shares or other securities then to
be issued upon any exercise of this Option are not covered by an effective
registration statement (and current prospectus included therein) under the
Securities Act of 1933, as amended (the "Act"), then:
-2-
(a) the Shares or other securities that shall be purchased
under this Option at such time will be purchased for his own account
for investment purposes only and not with a view to resale or
distribution thereof;
(b) the offer of Shares or other securities under this Option
at such time may be made pursuant to a claim of exemption from the
registration provisions of the Act and any applicable state securities
laws; and
(c) the Shares or other securities subject to this Option may
be required to be held indefinitely, unless such securities are
subsequently registered for resale or an exemption from such
registration is then available.
The Optionee understands and agrees that no offering statement, prospectus or
other securities law disclosure document containing information with respect to
the Company or this Option has been or is to be prepared in connection with the
grant of the Option evidenced by this Agreement, and the Optionee has made his
own inquiry and analysis with respect to the Company and this Option. The
Optionee further understands and agrees that, except as set forth below in
Paragraph 6, the Company is under no obligation to register any Shares or other
securities issued upon exercise of this Option, or to comply with any such
exemption or to supply the Optionee with any information necessary to enable him
to make any resale of such Shares or other securities under Rule 144 or any
other rule or regulation of the Securities and Exchange Commission.
In regard to the foregoing, the Optionee understands and
agrees that any certificate(s) or other instruments evidencing any Shares or
other securities that may be purchased pursuant to the exercise of this Option,
which have not been registered under the Act and applicable state securities
law, may bear an appropriate restrictive legend in a form determined in the sole
discretion of the Company.
6. REGISTRATION RIGHTS.
6.1 REGISTRATION. (a) The Company shall within 90 days of the
date first written above, prepare and file with the Commission a registration
statement on an appropriate form of the Commission covering the resale of all of
the Option Shares (as defined below) (the "Registration Statement"), and cause
such Registration Statement relating to Option Shares to become effective as
soon as practicable after such filing, and keep the Registration Statement
effective at all times until such date as is the earlier of (i) the date on
which all of the Option Shares have been sold, (ii) the date on which all of the
Option Shares (in the reasonable opinion of counsel to the Company) may be sold
to the public without registration and without restriction as to the number of
Option Shares to be sold, whether pursuant to Rule 144 or otherwise, and (iii)
until the Options with respect to the Shares have expired (the "Registration
-3-
Period"). The Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein and all documents incorporated by
reference therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein not misleading.
(b) The Company shall prepare and file with the Commission
such amendments (including post-effective amendments) and supplements
to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the
Registration Statement effective at all times during the Registration
Period, and, during such period, comply with the provisions of the
Securities Act applicable to the Company with respect to the
disposition of all Option Shares in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in
the Registration Statement.
(c) The Company shall use reasonable efforts to (i) register
and qualify the Option Shares covered by the Registration Statement
under securities laws of such jurisdictions in the United States as
Optionee who holds (or has the right to hold) the Option Shares being
offered reasonably requests, (ii) prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain
such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all actions reasonably necessary or
advisable to qualify the Option Shares for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 6.1(d), or file a general consent to service of
process in any such jurisdiction.
(d) As soon as practicable after becoming aware of such event,
the Company shall notify (by telephone and also by facsimile and
reputable overnight courier) the Optionee of the happening of any
event, of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Upon such notification, the Optionee
agree to cease all sales of Option Shares pursuant to such Registration
Statement until the Company (using its reasonable best efforts) shall
prepare and file a supplement or amendment to the Registration
Statement to correct such untrue statement or omission.
(e) If, at the time the Company is required to maintain the
effectiveness of a Registration Statement for purposes of satisfying
its obligation under this Section 6, the Company shall be engaged in a
transaction with respect to which disclosure would be required in such
registration statement, but for which financial or other information
necessary for such required disclosure is not then available to the
Company, or with respect to which the Company's Board of Directors
shall have determined that disclosure at such time could have an
adverse effect on the Company or its business or prospects, then the
-4-
Company shall be entitled to delay filing or maintaining the
effectiveness the Registration Statement for up to 90 days.
6.2 "PIGGYBACK RIGHTS". Subject to paragraph 6.3 hereof, if
the Company shall prepare and file one or more registration statements under the
Act with respect to a public offering of equity securities of the Company, or of
any equity securities of the Company held by its security holders, the Company
will include in any such registration statement such information as is required,
and such number of the Shares previously issued and then outstanding, pursuant
to the exercise of this Option (the "Option Shares") held by the Optionee or
other person authorized to act for the Optionee pursuant to paragraph 2(d)
hereof as may be requested, to permit a public offering of the Option Shares so
requested; provided, however, that the subject registration statement shall be
on a form on which Option Shares may be registered for resale by the holder
thereof; and further provided that if, in the written opinion of the Company's
managing underwriter, if any, for such offering, the inclusion of the Option
Shares requested to be registered, when added to the securities being registered
by the Company or the selling security holder(s), would exceed the maximum
amount of the Company's securities that can be marketed without otherwise
materially and adversely affecting the entire offering, then the Company may
exclude from such offering all or any portion of the Option Shares requested to
be so registered, but only if no securities are included in such registration
statement other than securities being sold for the account of the Company or by
persons pursuant to the exercise of "demand" registration rights or of
"piggyback" registration rights granted prior to the date of this Agreement
(which shall be deemed to be senior to those of the Optionee), and then only on
a pro rata basis with respect to all securities not being sold by the Company or
by persons exercising such "demand" or senior "piggyback" registration rights.
The Company shall bear all fees and expenses incurred by it in connection with
the preparation and filing of such registration statement. In the event of such
a proposed registration, the Company shall furnish the Optionee with not less
than twenty (20) days' written notice prior to the proposed or expected
effectiveness date of such registration statement. Such notice shall continue to
be given by the Company to the Optionee with respect to subsequent registration
statements filed by the Company, until such time as all of the Option Shares
have been registered or may be sold by the Optionee without registration under
the Act or applicable state securities laws and regulations, and without
limitation as to volume, pursuant to Rule 144 of the Act or any succeeding
provision. The Optionee shall exercise the rights provided for in this paragraph
6.2 by giving written notice to the Company, within ten (10) days of receipt of
the Company's notice provided for herein.
6.3 CERTAIN PROCEDURES AND REQUIREMENTS OF OPTIONEE.
(a) INFORMATION TO BE FURNISHED BY THE OPTIONEE. In
connection with the registration of the Option Shares, and as
a condition to the Company's obligations under paragraph 6,
the Optionee will furnish to the Company in writing such
information with respect to the Optionee and his proposed
-5-
disposition as shall be reasonably necessary in order to
assure compliance with the Act and with other federal and
applicable state securities laws. Without limiting the
generality of the foregoing, in connection with an
underwritten public offering, the Optionee agrees to enter
into, as required, a written agreement with the managing
underwriter in such form and containing such provisions as is
customary in the securities business for such an arrangement,
and to complete and execute all questionnaires, powers of
attorney, indemnities, and other documents or instruments
reasonably required under such terms of the underwriting
arrangements.
(b) EXPENSES OF THE OPTIONEE. All underwriting
discounts and selling commissions applicable to the sale of
any Option Shares, as well as fees and expenses of any
counsel, accountant, or other advisor to the Optionee, shall
be borne by the Optionee.
(c) CERTAIN RESTRICTIONS. Notwithstanding anything to
the contrary contained in this paragraph 6, if there is a firm
commitment underwritten offering of securities for the Company
pursuant to a registration covering the Option Shares, and if
the Optionee does not elect to sell his Option Shares to the
underwriters of the Company's securities in connection with
such offering, then the Optionee (if requested by the managing
underwriter) shall agree to refrain from selling any of his
Option Shares that are otherwise registered pursuant to this
paragraph 6 during the period in which the underwriting
syndicate, as such, participates in the after-market. The
Optionee shall, however, be entitled to sell such securities,
in any event, commencing on the 120th day after the effective
date of such registration statement, if then lawful to do so
under applicable securities laws and rules of the Securities
and Exchange Commission.
(d) INDEMNIFICATION BY OPTIONEE. In connection with a
registration of the Option Shares under the Act pursuant to
this paragraph 6, the Company and the Optionee shall enter
into customary indemnification agreements with regard to
losses, claims, damages or liabilities arising therefrom. In
addition, if such registration relates to an underwritten
offering, such indemnification agreements shall include the
underwriters thereof as a party thereto.
6.4 SURVIVAL. The rights and obligations set forth in this
paragraph 6 shall survive the exercise of this Option, but shall expire and
terminate as of the date that the Optionee may sell all of his Option Shares
pursuant to Rule 144(k) under the Act or a succeeding provision thereto.
7. OTHER POSSIBLE LEGAL RESTRICTIONS. If, in the opinion of legal
counsel for the Company, the issuance or sale of any Shares or other securities
pursuant to the exercise of this Option would not be lawful for any reason,
including without limitation the inability of the Company to obtain approval or
other clearance from any governmental authority or regulatory body deemed by
-6-
such counsel to be necessary to such issuance or sale, the Company shall not be
obligated to issue or sell any Shares or other securities pursuant to the
exercise of this Option unless and until the Company receives evidence
satisfactory to such counsel that such issuance and sale would no longer be
unlawful.
8. NO RIGHTS AS SHAREHOLDER. Neither the Optionee nor any other person
authorized to purchase Shares upon exercise of this Option shall have any
interest in or rights as a shareholder of the Company with respect to any Shares
which are subject to this Option until such Shares have been issued to the
Optionee or such person pursuant to the exercise of this Option.
9. WITHHOLDING TAXES. As a condition of exercise of this Option, the
Company may, in its good faith discretion, withhold or require the Optionee to
pay or reimburse the Company for any taxes which the Company determines are
required to be withheld in connection with the grant or any exercise of this
Option.
10. HEIRS AND SUCCESSORS. This Agreement and all terms and conditions
hereof shall be binding upon the parties hereto, and their respective
successors, heirs, legatees and legal representatives.
11. ENTIRE AGREEMENT; AMENDMENT; GOVERNING LAW; SEVERABILITY. This
Agreement contains the entire agreement between the parties relating to the
matters provided herein, and no representations, promises or agreements, oral or
otherwise, not expressly contained herein shall be binding on any party with
respect to the subject matter hereof. This Agreement may not be modified or
amended except by an instrument in writing signed by each party hereto or its
respective successor in interest. This Agreement is executed and delivered in,
and shall be enforced, construed and governed in accordance with the laws of,
the State of Florida. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
12. NOTICES. All notices, consents, requests, and demands to or upon
the respective parties hereto to be effective shall be in writing and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (a) on the date delivered in person, (b) on the date indicated on the
return receipt if mailed postage prepaid, by certified or registered U.S. Mail,
with return receipt requested, (c) on the date transmitted by facsimile, if sent
on a business day by 5:00 P.M., Eastern Time, and confirmation of receipt
-7-
thereof is reflected or obtained, or (d) if sent by Federal Express or other
nationally recognized overnight courier service or overnight express U.S. Mail
in time for and specifying next day or next business day delivery, with service
charges or postage prepaid, then on the next business day after delivery to the
courier service or U.S. Mail. In each case (except for personal delivery) such
notices, requests, demands, and other communications shall be sent to the party
at its address or facsimile number as follows, or as otherwise designated by one
party to the other by notice in accordance herewith:
If to the COMPANY, to:
JWGenesis Financial Corp.
000 Xxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier: 561.338.2827
If to the OPTIONEE, to the address on the signature page.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the date and year first above written.
COMPANY:
JWGENESIS FINANCIAL CORP.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice Chairman and Chief Operating Officer
[SIGNATURES CONTINUE ON NEXT PAGE.]
-8-
OPTIONEE:
____________________________________
Xxxx Xxxxx
Address____________________________
____________________________
____________________________
Telecopier:________________________
-9-
APPENDIX A
EXERCISE OF OPTION
The undersigned Optionee under that certain Stock Option
Agreement dated July 15, 1999 (the "Agreement"), hereby exercises the Option
evidenced thereby for the following number of shares of common stock, $.001 par
value, of JWGenesis Financial Corp., and agrees to be subject to and bound by
the terms and conditions of the Agreement:
Number of shares being purchased: _________
Purchase price submitted herewith: $ _____________
_______________________________
(Signature)
_______________________________
(Date)
