EXCAL ENTERPRISES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made and entered into as of this 12th
day of November, 1999, by and between EXCAL ENTERPRISES, INC., a
Delaware corporation (the "Company"), and R. Park Newton, an
employee and a director of the Company, and Francine Newton, his
wife (collectively, the "Optionee"), as tenants in their
entireties.
W I T N E S S E T H :
WHEREAS, on November 12, 1999, the Board of Directors
of the Company (the "Board") approved the grant of stock options
to purchase shares of the Company's common stock, $.001 par value
(the "Common Stock"), to the Optionee; and,
WHEREAS, the option granted under this Agreement is not
intended to constitute an incentive stock option ("Nonqualified
Stock Option"), as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"); and,
NOW, THEREFORE, in consideration of the premises and of
the covenants and agreements herein set forth, the parties hereby
mutually covenant and agree as follows:
1. Grant.
(a) Option. Subject to the terms and conditions
of this Agreement, the Company confirms the grant to the Optionee
of a Nonqualified Stock Option to purchase from the Company all,
or any part, of the aggregate number of 75,000 shares of Common
Stock (hereinafter referred to as the "Optioned Shares," and the
option to purchase the Optioned Shares referred to as the
"Option").
(b) Reload Option. In addition to the Option
granted hereby (the "Underlying Option"), the Company will grant
to the Optionee a reload option (the "Reload Option") if the
Optionee acquires shares of Common Stock pursuant to the exercise
of the Underlying Option and pays for such shares and/or the tax
obligation incurred by reason of the exercise of the Underlying
Option (the "withholding taxes") with shares of Common Stock
already owned by, or otherwise issuable to, the Optionee (the
"Tendered Shares"). The Reload Option grants to the Optionee the
right to purchase shares of Common Stock equal in number to the
number of Tendered Shares. The date on which the Tendered Shares
are tendered to, or withheld by, the Company in full or partial
payment of the purchase price and withholding taxes for the
shares of Common Stock acquired pursuant to the exercise of the
Underlying Option is the Reload Grant Date. The exercise price
of the Reload Option is the fair market value of the Tendered
Shares on the Reload Grant Date. The fair market value of the
Tendered Shares shall be the closing bid price per share of the
Common Stock on the Reload Grant Date. The Reload Option shall
expire on November 12, 2009. Except as provided herein the
Reload Option is subject to all of the other terms and provisions
of this Agreement governing the Option.
2. Option Price. The price to be paid for the
Optioned Shares shall be $1.40625 per share.
3. Time of Exercise. The Option is fully exercisable
as of the date of this Agreement and may be exercised by the
Optionee in whole or in part at any time and from time to time,
after the date hereof.
4. Manner of Exercise and Payment. The Option may be
exercised only by written notice to the Company by the Optionee
of the Optionee's intent to exercise the Option, delivered to the
Company at its principal office, specifying the number of shares
with respect to which the Option is being exercised, accompanied
by full payment for such shares: (a) in cash or its equivalent;
(b) with the consent of the Board, by tendering shares of Common
Stock valued at their fair market value at the time of exercise;
or (c) with the consent of the Board, by any combination of (a)
and (b).
5. Issuance of Stock Certificates. Upon satisfaction
of the conditions of Section 4, the Company shall promptly
deliver to the Optionee a certificate or certificates for the
number of shares of Common Stock in respect of which Options have
been exercised, legended to reflect the agreements and conditions
applicable to such shares referred to in Section 11.
6. Nontransferability of Option. The Option is not
transferable by the Optionee otherwise than by will or the laws
of descent and distribution.
7. Term. The Option shall expire on November 12,
2009, and shall not be exercisable thereafter.
8. Termination of Employment. The Option shall
terminate and shall not be exercisable upon the date of
expiration specified in Section 7 hereof and shall not otherwise
terminate as a result of a termination of Optionee's employment
with the Company.
9. Tax Withholding.
(a) It shall be a condition of the obligation of
the Company to issue or transfer shares of Common Stock upon
exercise of the Option, that the Optionee shall pay to the
Company upon its demand, or agree that the Company may withhold
from compensation due the R. Park Newton, such amount as may be
requested by the Company for the purpose of satisfying its
liability to withhold federal, state or local income or other
taxes incurred by reason of the exercise of the Option. If the
Optionee fails to comply with this Section 9, the Company may
refuse to issue or transfer shares of Common Stock upon exercise
of the Option.
(b) With the consent of the Board, the Optionee
may elect to have the Company withhold that number of Optioned
Shares otherwise issuable to the Optionee upon exercise of the
Option or to deliver to the Company a number of Shares, in each
case, having a fair market value at the time of exercise, as
determined by the Board, equal to the minimum amount required to
be withheld as a result of such exercise. The election must be
made in writing and delivered to the Company on or prior to the
date of exercise. The shares so withheld or delivered shall be
free of all adverse claims and shall be endorsed in blank by the
Optionee or accompanied by stock powers duly endorsed in blank.
10. Capital Adjustments Affecting Stock. In the event
of a capital adjustment resulting from a stock dividend, stock
split, spin-off, reorganization, recapitalization, merger,
consolidation, reclassification, combination or exchange of
shares, the Optioned Shares shall be adjusted in a manner
consistent with such capital adjustment. The price of any shares
under the Option shall be adjusted such that there will be no
change in the aggregate purchase price payable upon exercise of
the Option. To the extent deemed equitable and appropriate by
the Board, subject to any required action by stockholders, in any
merger, consolidation, reorganization, liquidation or
dissolution, the Option shall pertain to the securities and other
property to which a holder of the number of shares of stock
covered by the Option would have been entitled to receive in
connection with any such event.
11. Restriction on Transfer of Common Stock. The
shares to be acquired upon exercise of the Option may not be sold
or offered for sale except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as
amended (the "Act") or any applicable state securities laws, (ii)
in a transaction satisfying the requirements of Rule 144
promulgated under the Act, or (iii) in a transaction which, in
the opinion of counsel for the Company, is exempt from the
registration provisions of the Act or applicable state securities
laws. The Optionee agrees that any certificate representing
shares acquired upon exercise of the Option may bear the
following legend:
The shares of Common Stock represented by
this certificate are restricted securities as that
term is defined under Rule 144 promulgated under
the Securities Act of 1933, as amended (the
"Act"). These shares may not be sold, transferred
or disposed of unless they are registered under
the Act, sold in a transaction satisfying the
requirements of Rule 144 or unless the request to
transfer is accompanied by an opinion of counsel
acceptable to the issuer, that the transfer will
not result in a violation of the Act or any
applicable state securities laws.
12. Specific Restrictions Upon Optioned Shares. The
Optionee hereby agrees with the Company that the Optionee shall
acquire the Optioned Shares for investment purposes only and not
with a view to resale or other distribution thereof to the public
in violation of the Act, and shall not dispose of the Optioned
Shares in any transaction which, in the opinion of counsel to the
Company, would violate the Act, or the rules and regulations
thereunder, or any applicable state securities or blue sky laws.
13. Rights as Shareholder. The Optionee shall not be
deemed for any purposes to be a shareholder of the Company with
respect to any of the Optioned Shares except to the extent that
the Option shall have been exercised, such shares shall have been
fully paid, and a stock certificate issued therefor.
14. Power of Company Not Affected. The existence of
the Option shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes
in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or dissolution
or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
15. Amendment or Modification. No term or provision
of this Agreement may be amended, modified or supplemented
orally, but only by an instrument in writing signed by the party
against which or whom the enforcement of the amendment,
modification or supplement is sought.
16. Governing Law. This Agreement shall be governed
by the internal laws of the State of Florida as to all matters,
including, but not limited to, matters of validity, construction,
effect, performance and remedies.
17. Entire Agreement. This Agreement entered into
between the Optionee and the Company sets forth the entire
agreement of the parties hereto in respect of the subject matter
contained herein and supersedes all prior agreements, promises,
covenants, arrangements, communications, representations or
warranties, whether oral or written, by any officer, employee or
representative of any party hereto; and any prior agreement of
the parties hereto in respect of the subject matter contained
herein, other than the Employment Agreement, is hereby terminated
and canceled.
18. Delegation by Board. Except to the extent
prohibited by applicable law or the applicable rules of a stock
exchange or market, the Board may delegate all or any portion of
its responsibilities and powers to any one or more of its
members. Any such delegation may be revoked by the Board at any
time.
19. Heirs and Successors. This Agreement shall be
binding upon, and inure to the benefit of, the Company and its
successors and assigns, and upon any person acquiring all or
substantially all of the Company's assets and business. In the
event of the Optionee's death prior to exercise of the Option,
the Option may be exercised by the estate of the Optionee to the
extent such exercise is otherwise permitted by this Agreement.
IN WITNESS WHEREOF, the Company has caused this
instrument to be executed by its duly authorized officer, and the
Optionee has executed this Agreement as of the day and year first
above written.
EXCAL ENTERPRISES, INC.
________________________________
By: Timothy R. Barnes
Title: Vice President/CFO
OPTIONEE:
________________________________
R. Park Newton
________________________________
Francine Newton
