CENTERLINE HOLDING COMPANY ROSS NON-QUALIFIED SHARE OPTION AGREEMENT
Exhibit
10.1
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NON-QUALIFIED SHARE OPTION AGREEMENT
THIS
NON-QUALIFIED SHARE OPTION
AGREEMENT (this “Agreement”) is made as of July 13,
2007 (the “Grant Date”), by and between Centerline
Holding Company, a Delaware statutory trust (the
“Company”), and Xxxxxxx X. Xxxx (the
“Optionee”).
WHEREAS,
in consideration of the Optionee agreeing to serve as Non-Executive Chairman
of
the Board of Trustees of the Company (“Non-Executive
Chairman”), the Company has undertaken to issue to the Optionee an
option to purchase common shares of beneficial interest of the Company (the
“Company Shares”) in accordance with the further terms
of this Agreement.
NOW,
THEREFORE, the parties hereto agree as follows:
Section
1. Grant
of Option.
The
Company hereby grants to the Optionee the right and option (the
“Option”) to purchase all or any part of an aggregate
of 800,000 common shares of beneficial interest of the Company (the
“Option Shares”), subject to, and in accordance with,
the terms and conditions set forth in this Agreement. The Option is
not intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.
Section
2. Purchase
Price.
The
price
at which the Optionee shall be entitled to purchase Option Shares upon the
exercise of the Option shall be $17.78 per Option
Share.
Section
3. Shares
Subject to this Agreement.
The
Company shall reserve for issuance, for the purposes of this Agreement, out
of
its authorized but unissued Company Shares, or out of Company Shares held
in the
Company’s treasury, or partly out of each, the Option Shares. If the
Option expires or terminates, according to the applicable provisions hereunder,
for any reason without having been exercised in full, the Optionee shall
not
have any rights with respect to the Company Shares subject to the unexercised
portion of the Option.
Section
4. Duration
of the Option.
The
Option shall be exercisable to the extent and in the manner provided herein
to
and including November 17, 2013 (the “Exercise Term”);
provided, however, that the Option may be terminated
earlier as
provided in Section 5(b), 7(a), 7(b), 11(a) or 11(b). Any unexercised
portion of the Option that is not exercised during the Exercise Term shall
be
deemed
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terminated
at the end of the Exercise Term (or at such earlier time as provided in Section
5(b), 7(a), 7(b), 11(a) or 11(b)).
Section
5. Exercisability
of Option.
(a) Unless
otherwise provided in this Agreement, the Option shall entitle the Optionee
to
purchase, in whole at any time, or in part from time to time, 400,000 of
the
total number of Option Shares covered by the Option on and after the date
hereof, an additional 200,000 Option Shares on and after November 17, 2007,
and
the remaining 200,000 Option Shares on and after November 17, 2008, and each
such right of purchase shall be cumulative and shall continue, unless sooner
exercised or terminated as herein provided, during the remaining period of
the
Exercise Term.
(b) If
the Optionee dies during the Exercise Term and the Option has not otherwise
terminated in accordance with the terms of this Agreement, all Option Shares
covered by the Option that have not already vested pursuant to Section 5(a)
shall vest upon the death of the Optionee and the unexercised portion of
the
Option may be exercised during the Exercise Term by the executor or
administrator of the Optionee’s estate, or by the person(s) to whom the
unexercised portion of the Option is transferred by will or the laws of decent
and distribution.
Section
6. Manner
of Exercise and Payment.
(a) Subject
to the terms and conditions of this Agreement, the Option may be exercised
by
delivery of written notice to the Company, in substantially the form attached
hereto as Appendix I, at its principal executive office. Such
notice shall state that the Optionee is electing to exercise the Option and
the
number of Option Shares to be exercised under the Option and shall be signed
by
the Optionee. If requested by the Company, the Optionee shall (i)
deliver this Agreement to the Company which shall endorse thereon a notation
of
such exercise and (ii) provide satisfactory proof as to the right of the
Optionee to exercise the Option.
(b) The
notice of exercise described in Section 6(a) hereof shall be accompanied by
the full purchase price for the Option Shares to be acquired under the Option
by
any one or a combination of the following: (i) cash (by certified check or
wire
transfer of immediately available funds), (ii) if requested by the Optionee,
to
the extent permitted by applicable law, transferring fully paid Company Shares
held at least six (6) months to the Company with a Fair Value (as defined
in
Section 15(c) below) equal to the aggregate purchase price (less any portion
paid in cash pursuant to clause (i) or by the surrender of a vested right
to
Option Shares pursuant to clause (iii)) or (iii) if requested by the Optionee,
to the extent permitted by applicable law, surrendering the vested right
of the
Optionee to exercise this Option for Option Shares with a Fair Value in excess
of the Exercise Price for such Option Shares equal to the aggregate purchase
price (less any portion paid in cash pursuant to clause (i) or by transfer
of
Company Shares pursuant to clause (ii)). In addition, the Optionee
may provide instructions to the Company that upon receipt of the Option purchase
price in cash, by certified check or by wire transfer of immediately available
funds, from a broker or dealer acting at the direction of the Optionee, in
payment for any Option Shares pursuant to the exercise of the Option, the
Company shall issue such Option Shares directly to the designated broker
or
dealer. Any Company Shares to be valued in connection with a transfer
of Company Shares to the Company
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or
Option
Shares to be valued in connection with a surrender of vested rights to exercise
this Option for Option Shares as payment of the purchase price under the
Option
shall be valued at their Fair Value on the day preceding the date of exercise
of
the Option. No fractional Option Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Option Shares
that
may be purchased upon exercise shall be rounded to the nearest number of
whole
Option Shares.
(c) Upon
receipt of notice of exercise and full payment for the Option Shares in respect
of which the Option is being exercised, the Company shall, subject to Section
9
of this Agreement, take such action as may be necessary to effect the transfer
to the Optionee of the number of Option Shares as to which such exercise
was
effective within five (5) Business Days thereof, including, without limitation,
issuing and delivering the
Option
Shares to the Optionee and entering the Optionee’s name as a shareholder of
record on the books of the Company with respect to the Option
Shares.
(d) The
Optionee shall not be deemed to be
the holder of, or to have any of the rights of a holder with respect to,
any
Option Shares subject to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the Optionee shall
have
paid the full purchase price for the number of Option Shares to be acquired
under the Option, (ii) the Company shall have issued and delivered the
Option Shares to the Optionee, and (iii) the Optionee’s name shall have
been entered as a shareholder of record on the books of the Company with
respect
to the Option Shares, whereupon the Optionee shall have full voting and other
ownership rights with respect to such Option Shares. Except as
otherwise expressly provided in this Agreement, no adjustment shall be made
for
cash dividends or other distributions or rights for which the record date
is
prior to the date on which any Option Shares are issued.
Section
7. Termination
of Option.
(a) Service
as Non-Executive Chairman. Except to the extent otherwise
provided in Section 5(b), if the Optionee resigns, retires or otherwise
voluntarily ceases to serve as Non-Executive Chairman or as a Managing Trustee
of the Company, the right to exercise the Option shall terminate immediately
on
the date the Optionee resigns, retires or otherwise voluntarily ceases to
serve
as Non-Executive Chairman or as a Managing Trustee with respect to any Option
Shares that have not vested on such date. The Optionee may exercise
the Option with respect to any Option Shares that have vested prior to such
date
during the Exercise Period.
(b) Breach
of Future Relations Agreement. In the event the Optionee or the
Contributor Affiliated Parties (as defined in the Future Relations Agreement,
dated as of November 17, 2003 (the “Future Relations
Agreement”), by and among Centerline Capital Company LLC (“CCC”,
formerly known as CharterMac Capital Company, LLC), the Optionee, Related
General II L.P. and The Related Companies, L.P.) are in material breach of
the
Future Relations Agreement and such breach is not cured within thirty (30)
days
following the giving by the Company of written notice of such breach, specifying
in reasonable detail the nature of such breach, to the Optionee (or, if the
breach is not capable of cure within such thirty (30) day period and the
Optionee is proceeding diligently to cure such breach, within sixty (60)
days
following
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the
giving by the Company of written notice of such breach to the Optionee),
the
Option shall terminate immediately upon the expiration of the thirty (30)
day
(or, if applicable, sixty (60) day) cure period with respect to any Option
Shares that have not vested on such date; provided, however, that the Option
shall not terminate if (i) the breach is a single occurrence that is incapable
of being cured and (ii) Optionee is able to make the Company and CCC whole
with
respect to the breach and promptly does so to the Company’s and CCC’s reasonable
satisfaction following receipt by Optionee of written notice of such breach
from
the Company. The Optionee may exercise the Option with respect to any
Option Shares that have vested prior to the applicable termination date during
the Exercise Period. Notwithstanding any provision hereof to the
contrary, the Optionee’s right to exercise all or any portion of the Option
shall be suspended during the period beginning on the date notice of breach
is
given to the Optionee and ending on the date that the breach has been
cured.
Section
8.
Nontransferability.
The
Option shall not be assignable or transferable by the Optionee, either
voluntarily or by operation of law, except by will or the laws of descent
and
distribution; provided, however, that following the fifth anniversary of
the
Grant Date the Option may be assigned or transferred to any Permitted Transferee
or any other Person consented to by the Company if such Permitted Transferee
or
other Person shall furnish to the Company a written agreement to be bound
by and
comply with the provisions of this Agreement applicable to the
Optionee.
Section
9.
General Restrictions.
(a)
Optionee Representations. As a condition to any exercise of
rights to purchase Option Shares the Optionee shall be required to represent
and
warrant that he is acquiring the Option Shares solely for his own account
for
the purpose of investment and not with a view to or for sale in connection
with
any distribution of any thereof. The Optionee shall be required to
agree that he will not, directly or indirectly, offer, transfer, sell, pledge,
hypothecate or otherwise dispose of the Option Shares (or solicit any offers
to
buy, purchase or otherwise acquire or take a pledge of the Option Shares)
except
in compliance with the Securities Act of 1933, as amended, and the rules
and
regulations thereunder. Certificates representing the Option Shares
issued upon exercise of the Option shall bear such legends as are deemed
appropriate by legal counsel to the Company, unless the Optionee provides
a
written opinion of legal counsel, satisfactory to the Company, that any such
legend is not required.
(b)
Compliance with Securities Laws. The Company shall
provide the Optionee with such information, statements, discussions and analyses
with respect to the Company in such manner and at such times as may be required
under state or federal securities laws.
Section
10. Recapitalization.
In
the
event that the outstanding Company Shares are changed into or exchanged for
a
different number or kind of shares or other securities of the Company by
reason
of any recapitalization, reclassification, stock split, stock dividend,
combination or subdivision, an
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appropriate
and proportionate adjustment shall be made in the number and kind of shares
subject to this Agreement and in the number, kind and per share exercise
price
of shares subject to the unexercised portion of the Option. Any such
adjustment to the unexercised portion of the Option shall be made without
change
in the total price applicable to the unexercised portion of the Option as
of the
date of such adjustment.
Section
11. Reorganization.
(a) In
the event that the Company is merged, consolidated or otherwise reorganized
with
another entity or person other than an Affiliate, and the Company is not
a
surviving entity, the board of directors or other governing body of any entity
assuming the obligations of the Company shall either (i) make appropriate
provision for the protection of the unexercised portion of the Option by
the
substitution on an equivalent basis of appropriate shares or other securities
of
the merged, consolidated or otherwise reorganized entity that will be issuable
in respect of the Option Shares (provided that no additional benefits shall
be
conferred upon the Optionee as a result of such substitution), or (ii) upon
written notice to the Optionee, provide that the unexercised portion of the
Option is vested in full (if not already so vested) and must be exercised
within
a specified number of days of the date of such notice or the unexercised
portion
of the Option will be terminated, or (iii) upon written notice to the
Optionee, provide that the unexercised portion of the Option is vested in
full
(if not already so vested) and shall be purchased by the successor entity
within
a specified number of days of the date of such notice at a price equal to
the
value the Optionee would have received if he then exercised his unexercised
portion of the Option and immediately received full payment in respect of
such
exercise, as determined in good faith by the successor entity; provided,
however, that in the event the common shareholders of the Company will receive
shares or other securities of the merged, consolidated or otherwise reorganized
entity, the board of directors or other governing body of any entity assuming
the obligations of the Company shall make appropriate provision for the
protection of the unexercised portion of the Option by the substitution on
an
equivalent basis of such shares or other securities of the merged, consolidated
or otherwise reorganized entity that will be issuable in respect of the Option
Shares (provided that no additional benefits shall be conferred upon the
Optionee as a result of such substitution).
(b) In
the event that all or substantially all of the assets or more than 51% of
the
outstanding equity securities of the Company entitled to vote for trustees
is
acquired by any other entity or person other than an Affiliate or an entity
or
person or any Affiliate thereof owning 5% or more of the outstanding voting
stock of the Company, or there is a liquidation of the Company, the Company
may
either (i) upon written notice to the Optionee, provide that the unexercised
portion of the Option is vested in full (if not already so vested) and must
be
exercised within a specified number of days of the date of such notice or
the
unexercised portion of the Option will be terminated, or (ii) upon written
notice to the Optionee, provide that the unexercised portion of the Option
is
vested in full (if not already so vested) and shall be purchased by the Company
or its successor within a specified number of days of the date of such notice
at
a price equal to the value the Optionee would have received if he then exercised
his unexercised portion of the Option and immediately received full payment
in
respect of such exercise, as determined in good faith by the
Company.
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Section
12. Trustee
Rights.
Nothing
contained in this Agreement shall constitute evidence of any agreement or
understanding, express or implied, that the Optionee has a right to continue
as
a Managing Trustee for any period of time.
Section
13. Withholding
of Taxes and Notice of Disposition.
The
Company shall have the right to deduct from any distribution of cash to the
Optionee an amount equal to the federal, state and local income taxes and
other
amounts as may be required by law to be withheld (the “Withholding
Taxes”) with respect to the Option. In addition, if the
Optionee is entitled to receive Option Shares upon exercise of the Option,
the
Optionee shall pay the Withholding Taxes to the Company in cash prior to
the
issuance, or release from escrow, of such Option Shares. In
satisfaction of the obligation to pay Withholding Taxes to the Company, the
Company may, in its discretion and subject to compliance with applicable
securities laws and regulations, withhold Option Shares having an aggregate
Fair
Value on the date preceding the date of such issuance equal to the Withholding
Taxes.
Section
14. Modification
of Agreement.
This
Agreement may be modified, amended, suspended or terminated, and any
terms or conditions may be waived, but only by a written instrument
executed by the parties hereto (which, in the case of the Company, shall
require
the approval of a majority of the independent trustees of the
Company).
Section
15. Definitions.
(a) Affiliate. The
term “Affiliate” shall mean a corporation or other entity or person which, at
the time of reference, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
the
Company.
(b) Business
Day. The term “Business Day” shall mean any day that the New York
Stock Exchange is open for business.
(c) Fair
Value. The term “Fair Value” of an Option Share or a Company
Share, as applicable, shall mean (i) if the Company Shares are traded on a
national securities exchange, the closing price for the Company Shares on
the
day immediately preceding the date of determination or if there is no closing
price on such date, the last preceding closing price, (ii) if the Company
Shares are not traded on a national securities exchange, the mean of the
high
bid and ask quotes of the Company Shares as reported in the NASDAQ/NMS reports
or the National Quotation Bureau Inc.’s pink sheets or in the NASD Bulletin
Board on the day immediately preceding the date of determination or if there
were no high bid and ask quotes on such date, the last preceding day that
there
were, and (iii) if neither (i) or (ii) are applicable, as determined in
good faith by the Company (which determination shall require the approval
of a
majority of the independent trustees of the Company).
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(d) Managing
Trustee. The term “Managing Trustee” shall have the meaning
ascribed thereto in the Second Amended and Restated Trust Agreement of the
Company dated as of November 17, 2003.
(e) Permitted
Transferee. The term “Permitted Transferee” shall mean: (i) any
spouse, parent, lineal descendent, parent-in-law, nephew, niece, brother,
sister, brother-in-law, sister-in-law, stepchild, son-in-law and daughter-in-law
of the Optionee or his spouse; (ii) any corporation, limited partnership
or
limited liability company in which all of the shares, partnership interests
or
membership interests are owned by the Optionee or the persons listed in (i)
above; (iii) in case of the death of any of the foregoing persons, a transfer
by
will or by the laws of the intestate succession to executors, administrators,
testamentary trustees, legatees or beneficiaries; or (iv) trusts, the only
beneficiaries of which are the Optionee, the persons listed in (i), (ii)
and
(iii) and/or are charitable organizations.
Section
16. Severability.
Should
any provision of this Agreement be held by a court of competent jurisdiction
to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full
force
in accordance with their terms.
Section
17. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of New York without giving effect to
the
conflicts of laws principles thereof.
Section
18. Successors
in Interest.
This
Agreement shall inure to the benefit of and be binding upon any successor
to the
Company. This Agreement shall inure to the benefit of the Optionee’s
legal representatives. All obligations imposed upon the Optionee and
all rights granted to the Company under this Agreement shall be final, binding
and conclusive upon the Optionee’s heirs, executors, administrators and
successors.
[Signature
page follows]
8
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above written.
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By:
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/s/
Xxxx X. Xxxxxxxxx
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Name:
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Xxxx
X. Xxxxxxxxx
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Title:
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Chief
Executive Officer and President
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OPTIONEE:
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| /s/ Xxxxxx X. Xxxx | |
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XXXXXXX
X. XXXX
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Appendix
I
NOTICE
OF EXERCISE OF OPTION UNDER
THE
NON-QUALIFIED
SHARE OPTION
AGREEMENT
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx
Xxxx 00000
Gentlemen:
I
hereby exercise my option to purchase
common shares of beneficial interest (the “Option Shares”) in Centerline Holding
Company (the “Company”), under the terms and conditions of that certain
Non-Qualified Share Option Agreement, dated as of July [__], 2007, by and
between Xxxxxxx X. Xxxx and the Company, as follows:
(1) Number
of shares:
(2) Option
price per
share:
(3) Aggregate
purchase price [(1) x
(2)]:
Enclosed
or accompanying delivery of
this notice is payment in the form of:
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(a)
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Cash. Cash,
certified check,
or wire transfer of immediately available funds in United States
dollars
payable to the order of the Company in the amount of the aggregate
purchase price [(3) above].
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(b)
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Company
Shares. To
the extent
permitted by applicable law, certificates duly endorsed in blank
for
Company Shares with a Fair Value on the day preceding the date
of this
notice equal to the aggregate purchase price [(3)
above].
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(c)
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Surrender
of Option
Rights. To
the extent
permitted by applicable law, surrender of my vested right to exercise
the
Option for Option Shares with a Fair Value in excess of the
Exercise Price for such Option Shares equal to the aggregate purchase
price [(3) above].
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(d)
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Any
combination of the
above.
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Note:
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If
any portion of the payment is
to be made in Company Shares, please consult the Company prior
to
submitting this form as to the proper method of
payment.
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Upon
receipt of the aggregate purchase
price [(3) above], please issue the certificates as follows:
(a) In
my name; or
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(b)
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In
the name of my designated
broker or dealer, to the extent the Company has received in cash,
certified check or wire transfer of immediately available funds,
the
aggregate purchase price [(3) above] from such broker or dealer
acting at
my direction.
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Please
deliver the certificates (including those representing excess shares submitted)
and/or any excess cash to:
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Name
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Name | |||||
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Address
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City
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State | Zip Code | City | State | Zip Code | |
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Social
Security Number
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Dated:
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(Signature)
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