NONQUALIFIED STOCK OPTION AGREEMENT
RAC FINANCIAL GROUP, INC.
This Agreement replaces any Option Agreement previously granted to
Employee. A Nonqualified Stock Option (the "Option") for a total of Ten Thousand
(10,000) shares (the "Shares") of common stock, par value $0.01 per share (the
"Common Stock"), of RAC Financial Group, Inc. (the "Company"), is hereby granted
to
XXXXXXX X. XXXXX
(the "Optionee") pursuant to the terms of this Option Agreement (the "Option
Agreement").
SECTION 1. EXERCISE PRICE. The exercise price is $29.00 for
each Share.
SECTION 2. EXERCISE OF THE OPTION. This Option may be exercised at any
time and from time to time during the term of this Option, in whole or in part
with respect to Shares that have vested. Shares subject to this Option shall
vest in equal one-third shares on the first, second and third anniversaries of
the date of grant. The Company may in its sole discretion accelerate the date on
which this Option may be exercised. Notwithstanding the foregoing, this Option
shall become fully exercisable upon the occurrence of certain significant
corporate events described in Section 2(e) below.
(A) METHOD OF EXERCISE. Options shall be deemed
exercised when:
(I) the Company has received written notice
of such exercise, including the number of Shares that are
being exercised, delivered to the Company in accordance with
the notice provisions herein signed by the person or persons
entitled to exercise this Option and, if this Option is being
exercised by any person or persons other than the Optionee, be
accompanied by proof, satisfactory to the Company, of the
right of such person or persons to exercise this Option;
(II) full payment of the aggregate exercise
price of the Shares as to which this Option is
exercised has been tendered to the Company; and
(III) arrangements that are satisfactory to
the Company in its sole discretion have been made for
the Optionee's payment to the Company of the amount,
if any, that the Company determines to be necessary
for the Company to withhold in accordance with
applicable federal or state income tax withholding
requirements.
(B) PAYMENT. The exercise price of any Shares purchased shall
be paid solely in cash, by certified or cashier's check, by money
order, by personal check (if approved by the Company), or in Common
Stock owned by the Optionee (if the Optionee owned such Common Stock
for six months prior to using such stock to exercise the Option) (or by
a combination of the above). If the exercise price is paid in whole or
in part with
CORPDAL:57914.1 28835-00003
Shares of Common Stock of the Company, such Common Stock shall be
valued at its Fair Market Value on the date of exercise. Any Common
Stock delivered in satisfaction of all or a portion of the exercise
price shall be appropriately endorsed for transfer and assignment to
the Company. For purposes hereof, "Fair Market Value" of a Share on a
particular date shall be the closing price or Common Stock, which shall
be (i) if the Common Stock is listed for trading on any United States
national securities exchange or the NASDAQ National Market System, the
last reported sale price of Common Stock on such exchange as reported
in any newspaper of general circulation, (ii) if the Common Stock is
not listed as provided in (i) above, but is otherwise quoted on NASDAQ
or any similar system of automated dissemination of quotations of
securities prices in common use, the mean between the closing high bid
and low asked quotations for such day of the Common Stock on such
system or (iii) if neither clause (i) nor (ii) is applicable, a value
determined by any fair and reasonable means prescribed by the Company.
(C) RESTRICTIONS ON EXERCISE.
(I) This Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities or
other law or valid regulation. As a condition to the exercise
of this Option, the Company may require the person exercising
this Option to make any agreements and undertakings that may
be required by any applicable law or regulation.
(II) Shares issued upon the exercise of this
Option without registration of such Shares under the
Securities Act of 1933, as amended (the "Act"), shall be
restricted securities subject to the terms of Rule 144 under
the Act. The certificates representing any such Shares shall
bear an appropriate legend restricting transfer and the
transfer agent of the Company shall be given stop transfer
instructions with respect to such Shares.
(D) SURRENDER OF OPTION. Upon exercise of this Option in part,
if requested by the Company, the Optionee shall deliver this Option
Agreement and any other written agreements executed by the Company and
the Optionee with respect to this Option to the Company which shall
endorse or cause to be endorsed thereon a notation of such exercise and
return all agreements to the Optionee.
(E) CERTAIN CORPORATE EVENTS. On the date thirty (30) days
prior to any occurrence described in this Section (2)(e)(i), (ii) or
(iii), but only where such anticipated occurrence actually takes place,
notwithstanding the exercise schedule in this Option Agreement, this
Option shall immediately become exercisable in full where there (i) is
any transaction (which shall include a series of transactions occurring
within 60 days or occurring pursuant to a plan) that has the result
that shareholders of the Company immediately before such transaction
cease to own at least 51% of (x) the voting stock of the Company or (y)
any entity that results from the participation of the Company in a
reorganization, consolidation, merger, liquidation or any other form of
corporate transaction; (ii) is a merger, consolidation, reorganization,
liquidation or dissolution in
CORPDAL:57914.1 28835-00003
which the Company does not survive; (iii) is a sale, lease, exchange or
other disposition of all or substantially all the property and assets
of the Company.
(F) ACCELERATION SHARES. Notwithstanding any provisions hereof
to the contrary, if this Option is accelerated under this Section 2,
the portion of this Option that may be exercised to acquire Shares that
the Optionee would not be entitled to acquire but for such acceleration
(the "Acceleration Shares"), is limited to that number of Acceleration
Shares that can be acquired without causing the Optionee to have an
"excess parachute payment" as determined under Section 280G of the
Code, determined by taking into account all of the Optionee's
"parachute payments" determined under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"). If as a result of this
Section 2(f), the Optionee may not acquire all of the Acceleration
Shares, then the Acceleration Shares that the Optionee may acquire
shall be the last shares that the Optionee would have been entitled to
acquire had this Option not been accelerated.
SECTION 3. TERM OF OPTION. This Option may not be exercised after the
expiration of ten (10) years from the Date of Grant of this Option and is
subject to earlier termination as provided in Section 4 below. In addition, this
Option is subject to cancellation by the Company upon a significant corporate
event as provided in Section 4 below. This Option may be exercised during such
times only in accordance with the Plan and the terms of this Option Agreement.
SECTION 4. TERMINATION OF OPTION PERIOD.
(A) The unexercised portion of this Option shall automatically
and without notice terminate and become null and void at the time of
the earliest to occur of the following:
(I) except as provided in Section 4(a)(iii), thirty
(30) days after the date that the Optionee ceases to be
employed by the Company or a subsidiary of the Company or
ceases to be a consultant or advisor to the Company or a
subsidiary of the Company, as the case may be, regardless of
the reason therefor other than as a result of such termination
by reason of (x) death, (y) mental or physical disability of
the Optionee as determined by a medical doctor satisfactory to
the Company or (z) termination of the Optionee's employment or
consulting contract or advisory services, as the case may be,
with the Company or a subsidiary for cause;
(II) except as provided in Section 4(a)(iii), one (1)
year after the date on which the Optionee suffers a mental or
physical disability as determined by a medical doctor
satisfactory to the Company;
(III) either (y) one (1) year after the date that the
Optionee ceases to be a consultant to or ceases to be employed
by, as the case may be, the Company or a Subsidiary, by reason
of death of the Optionee, or (z) six (6) months after the date
on which the Optionee shall die, if the Optionee's death shall
occur during the
CORPDAL:57914.1 28835-00003
thirty-day period described in Section 4(a)(i) or the one-year
period described in
Section 4(a)(ii);
(IV) the date that the Optionee ceases to be a
consultant to or ceases to be employed by, as the case may be,
the Company or a subsidiary as a result of a termination for
cause; and
(V) the tenth (10th) anniversary of the date of
grant of this Option.
(B) If provided in an Option, the Company in its sole
discretion may, by giving written notice (a "Cancellation Notice")
cancel, effective upon the date of the consummation of any of the
transactions described in Section 2(e), all or any portion of this
Option that remains unexercised on such date. Such Cancellation Notice
shall be given a reasonable period of time (but not less than 15 days)
prior to the proposed date of such cancellation, and may be given
either before or after shareholder approval of such transaction.
SECTION 5. ADJUSTMENT OF SHARES.
(A) If at any time while unexercised Options are outstanding
hereunder, there shall be any increase or decrease in the number of
issued and outstanding shares of Common Stock through the declaration
of a stock dividend or through any recapitalization resulting in a
stock split-up, combination or exchange of shares, then and in such
event appropriate adjustment shall be made in the number of Shares and
the exercise price per Share thereof then subject to this Option, so
that the same proportion of the Company's issued and outstanding shares
shall remain subject to purchase at the same aggregate exercise price.
(B) The Company may change the terms of this Option, with
respect to the exercise price or the number of Shares subject to this
Option, or both, when, in the Company's sole discretion, such
adjustments become appropriate by reason of any significant corporate
transaction.
(C) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into shares of capital stock of any class,
either in connection with direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to the number of or exercise price of Shares then
subject to this Option.
(D) Without limiting the generality of the foregoing, the
existence of this Option shall not affect in any manner the right or
power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or
consolidation of the
CORPDAL:57914.1 28835-00003
Company; (iii) any issue by the Company of debt securities, or
preferred or preference stock that would rank above the Shares subject
to this Option; (iv) the dissolution or liquidation of the Company; (v)
any sale, transfer or assignment of all or any part of the assets or
business of the Company; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
SECTION 6. ASSIGNABILITY OF OPTION. This Option may not be
transferred or assigned by the Optionee otherwise than by will or the laws of
descent and distribution.
SECTION 7. ISSUANCE OF SHARES. No person shall be, or have any rights
or privileges of, a shareholder of the Company with respect to any of the Shares
subject to this Option unless and until certificates representing such Shares
have been issued and delivered to such person. As a condition of any issuance of
a stock certificate for Shares, the Company may obtain such agreements or
undertakings, if any, as it may deem necessary or advisable to assure compliance
with any provision of this Option Agreement or any law or regulation, including,
but not limited to, the following:
(A) a representation and warranty by the Optionee to the
Company, at the time this Option is exercised, that he/she is acquiring
the Shares to be issued to him/her for investment and not with a view
to, or for sale in connection with the distribution of any such Shares;
and
(B) a representation, warranty or agreement to be bound by any
legends that are, in the opinion of the Company, necessary or
appropriate to comply with the provisions of any securities law deemed
by the Company to be applicable to the issuance of the Shares and are
endorsed upon the certificates representing the Shares.
SECTION 8. ADMINISTRATION OF THIS OPTION.
(A) The determinations and the interpretation and
construction of any provision of this Option by the Company shall be
final and conclusive.
(B) Subject to the express provisions of this Option, the
Company shall have the authority, in its sole and absolute discretion
(i) to adopt, amend, and rescind administrative and interpretive rules
and regulations relating to this Option; (ii) to construe the terms of
this Option; (iii) as provided in Section 5(a), upon certain events to
make appropriate adjustments to the exercise price and number of Shares
subject to this Option; and (iv) to make all other determinations and
perform all other acts necessary or advisable for administering this
Option, including the delegation of such ministerial acts and
responsibilities as the Company deems appropriate. The Company may
correct any defect or supply any omission or reconcile any
inconsistency in this Option in the manner and to the extent it shall
deem expedient to carry it into effect, and it shall be the sole and
final judge of such expediency. The Company shall have full discretion
to make all determinations on the matters referred to in this Section
8(b), and such determinations shall be final, binding and conclusive.
CORPDAL:57914.1 28835-00003
SECTION 9. GOVERNMENT REGULATIONS. The granting and exercise of this
Option and the obligation of the Company to sell and deliver Shares under this
Option, shall be subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
SECTION 10. LAW GOVERNING. THIS OPTION IS INTENDED TO BE PERFORMED
IN THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH STATE.
SECTION 11. NOTICES. All notices and other communications that are
required to be or may be given under this Option Agreement shall be in writing
and shall be deemed to have been duly given when delivered in person,
transmitted by confirmed telecopy, upon receipt after dispatch by courier or by
certified or registered mail, postage prepaid, to the party to whom the notice
is given. Notices shall be given at the address under the signature of the
appropriate party to this Option Agreement or to such other address as such
party may designate by giving notice to the other party to this Option
Agreement.
SECTION 12. MISCELLANEOUS.
(A) The grant of this Option is in addition to any other
compensation that may be paid to the Optionee or other stock option
plans of the Company or other benefits with respect to the Optionee's
position with or relationship to the Company or its subsidiaries. This
Option shall not confer upon the Optionee the right to continue as an
employee, consultant or advisor, or interfere in any way with the
rights of the Company to terminate the Optionee's status as an
employee, consultant or advisor.
(B) The members of the Board of Directors of the Company shall
not be liable for any act, omission, or determination taken or made in
good faith with respect to this Option, and members of the Board shall,
in addition to all other rights of indemnification and reimbursement,
be entitled to indemnification and reimbursement by the Company in
respect of any claim, loss, damage, liability or expense (including
attorneys' fees, the costs of settling any suit, provided such
settlement is approved by independent legal counsel selected by the
Company, and amounts paid in satisfaction of a judgment, except a
judgment based on a finding of bad faith) arising from such claim,
loss, damage, liability or expense to the full extent permitted by law
and under any directors' and officers' liability or similar insurance
coverage that may from time to time be in effect.
(C) Any issuance or transfer of Shares to the Optionee, or to
the Optionee's legal representative, heir, legatee, or distributee, in
accordance with the provisions of this Option, shall, to the extent
thereof, be in full satisfaction of all claims of such persons under
this Option. The Company may require the Optionee, or any legal
representative, heir, legatee or distributee as a condition precedent
to such payment or issuance or transfer of Shares, to execute a release
and receipt for such payment or issuance or transfer of Shares in such
form as it shall determine.
CORPDAL:57914.1 28835-00003
(D) Neither the Board nor the Company guarantees Shares
from loss or depreciation.
(E) All expenses incident to the administration, termination,
or protection of this Option, including, but not limited to, legal and
accounting fees, shall be paid by the Company; provided, however, the
Company may recover any and all damages, fees, expenses and costs
arising out of any actions taken by the Company to enforce its rights
under this Option.
(F) Records of the Company shall be conclusive for all
purposes under this Option, unless determined by the Board to be
incorrect.
(G) Any action required of the Company relating to this Option
shall be by resolution of the Board or by a person authorized to act by
resolution of the Board.
(H) If any provision of this Option is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of this Option, but such provision shall be
fully severable, and this Option shall be construed and enforced as if
the illegal or invalid provision had never been included in this
Option.
(I) Whenever any notice is required or permitted under this
Option, such notice must be in writing and personally delivered or sent
by mail or delivery by a nationally recognized courier service. Any
notice required or permitted to be delivered under this Option shall be
deemed to be delivered on the date on which it is personally delivered,
or, if mailed, whether actually received or not, on the third Business
Day after it is deposited in the United States mail, certified or
registered, postage prepaid, addressed to the person who is to receive
it at the address that such person has previously specified by written
notice delivered in accordance with this subsection or, if by courier,
seventy-two (72) hours after it is sent, addressed as described in this
subsection. The Company or the Optionee may change, at any time and
from time to time, by written notice to the other, the address that was
previously specified for receiving notices. Until changed in accordance
with this Option, the Company and the Optionee shall specify as its and
his or her address for receiving notices the address set forth in this
Option pertaining to the Shares to which such notice relates.
(J) Any person entitled to notice under this Option may
waive such notice.
(K) This Option shall be binding upon the Optionee, his legal
representatives, heirs, legatees and distributees upon the Company, its
successors, and assigns, and upon the Board and its successors.
(L) The titles and headings of Sections are included for
convenience of reference only and are not to be considered in
construction of this Option's provisions.
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(M) All questions arising with respect to the provisions of
this Option shall be determined by application of the laws of the State
of Texas, except to the extent Texas law is preempted by federal law or
Nevada corporate law that is controlling. The obligation of the Company
to sell and deliver the Shares under this Option is subject to
applicable laws and to the approval of any governmental authority
required in connection with the authorization, issuance, sale, or
delivery of such Shares.
(N) Words used in the masculine shall apply to the feminine
where applicable, and wherever the context of this Option dictates, the
plural shall be read as the singular and the singular as the plural.
DATE OF GRANT: RAC FINANCIAL GROUP, INC.
June 1, 1996
By:
Address: Name: Xxxxxx X. Xxxxxxxx
Title: President
0000 X. Xxxxxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Optionee represents that he/he is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all the terms and
provisions of this Option Agreement. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Company
upon any questions arising under this Option Agreement.
By:
XXXXXXX X. XXXXX, Optionee
Address:
CORPDAL:57914.1 28835-00003
