<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
-----------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _________
Commission file number 0-4408
------------------------------
RESOURCE AMERICA, INC.
----------------------
(Exact name of small business issuer as specified in its charter)
Delaware 72-0654145
- ------------------------------- ------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1521 Locust Street, Philadelphia, Pennsylvania 19102
---------------------------------------------------------
(Address of principal executive offices)
(215) 546-5005
------------------------------------
(Issuer's telephone number)
--------------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
665,202
-------------------------
<PAGE>
RESOURCE AMERICA, INC.
INDEX
PAGE
NUMBER
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (Unaudited) December 31,
1995, and September 30, 1995. . . . . . . . . . . . . .1 & 2
Consolidated Statement of Income (Unaudited) - Three
Months Ended December 31, 1995, and 1994. . . . . . . . . .3
Consolidated Statement of Cash Flows (Unaudited) -
Three Months Ended December 31, 1995, and 1994. . . . . . .4
Notes to Consolidated Financial Statements (Unaudited). . 5-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . .11-13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . .14
<PAGE>
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEET (UNAUDITED)
RESOURCE AMERICA, INC., AND SUBSIDIARIES
December 31, 1995, and September 30, 1995
===================================================================
<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
------------ -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,496,918 $ 2,457,432
Accounts and notes receivable 1,661,076 1,303,556
Inventory 130,406 128,488
Prepaid expenses and other current assets 127,313 34,557
------------ -------------
Total Current Assets 7,415,713 3,924,033
PROPERTY AND EQUIPMENT
Oil and gas properties and equipment
(successful efforts) 24,142,976 24,039,762
Gas gathering and transmission facilities 1,514,127 1,514,127
Other 1,116,915 1,072,243
------------ -------------
26,774,018 26,626,132
Less - accumulated depreciation, depletion,
and amortization (14,328,386) (14,043,455)
------------ -------------
Net Property and Equipment 12,445,632 12,582,677
INVESTMENTS IN MORTGAGE LOANS 16,291,935 17,991,415
RESTRICTED CASH 1,026,119 904,409
OTHER ASSETS 2,085,045 2,147,430
------------ -------------
$39,264,444 $37,549,964
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED BALANCE SHEET (UNAUDITED)
RESOURCE AMERICA, INC., AND SUBSIDIARIES
December 31, 1995, and September 30, 1995
===================================================================
<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
---------------- -----------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 402,681 $ 721,673
Accrued liabilities 521,466 516,066
Accrued income taxes 250,322 -
Current portion of long-term debt 91,000 91,000
------------- ----------------
Total Current Liabilities 1,265,469 1,328,739
LONG-TERM DEBT 8,519,443 8,522,682
DEFERRED INCOME TAXES 1,520,000 1,147,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value, 1,000,000
authorized, none issued - -
Common stock, $.01 par value, 3,500,000
authorized shares, 817,912 issued and
outstanding shares (including 152,710 and
152,700 treasury shares) at December 31,
1995, and September 30, 1995, respectively 8,179 8,179
Additional paid-in capital 19,185,497 19,214,210
Retained earnings 11,969,611 10,532,719
Less cost of treasury shares (2,721,627) (2,721,437)
Less loan receivable from ESOP (482,128) (482,128)
------------ ------------
Total Stockholders' Equity 27,959,532 26,551,543
------------ ------------
$ 39,264,444 $ 37,549,964
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
RESOURCE AMERICA, INC., AND SUBSIDIARIES
Three Months Ended December 31, 1995, and 1994
===================================================================
<TABLE>
<CAPTION>
Three Months
Ended December 31,
-------------------------------
1995 1994
------------ -------------
<S> <C> <C>
REVENUES
Real estate finance $ 2,085,121 $ 687,781
Oil and gas production 821,991 841,256
Gas gathering and transmission 92,966 98,219
Well services 193,513 235,619
Equipment Leasing 608,761 -
Financial services 152,174 79,045
Interest 71,209 35,574
----------- ------------
4,025,735 1,977,494
COSTS AND EXPENSES
Production and transmission 354,851 396,014
Well services 192,238 208,627
Real estate 139,956 154,911
Financial services 37,381 49,775
Equipment Leasing (10,441)
Exploration 29,893 40,895
General and administrative 408,877 330,840
Depreciation and amortization 409,858 342,625
Interest 214,566 220,090
Other - net (2,079) (693)
----------- ------------
1,775,100 1,743,084
----------- ------------
INCOME FROM OPERATIONS 2,250,635 234,410
OTHER INCOME
Gain on sale of property 427 833
----------- ------------
Income before income taxes 2,251,062 235,243
Provision for federal income taxes 653,000 35,000
----------- ------------
NET INCOME $ 1,598,062 $ 200,243
=========== ============
NET INCOME PER COMMON SHARE $ 1.87 $ .27
=========== ============
Weighted average common shares outstanding 859,000 737,500
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
RESOURCE AMERICA, INC., AND SUBSIDIARIES
Three Months Ended December 31, 1995, and 1994
==================================================================
<TABLE>
<CAPTION>
Three Months
Ended December 31,
----------------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,598,062 $ 200,243
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 409,858 342,625
Amortization of discount on senior note and
deferred finance costs 18,662 18,038
Property impairments and abandonments 30,663 19,500
Deferred income taxes 373,000 35,000
Gain on dispositions and investments (1,447,454) (833)
Change in operating assets and liabilities
net of effects from purchase of subsidiaries:
(Increase) decrease in accounts receivable (357,520) 233,580
Increase in prepaid expenses and other
current assets (92,756) (71,724)
Decrease in accounts payable (318,992) (81,204)
Increase (decrease) in other current liabilities 255,721 (246,793)
Accretion of discount (128,666) (89,088)
Increase in inventory (1,918) (17,479)
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 338,660 341,865
INVESTING ACTIVITIES:
Capital expenditures (294,287) (256,092)
Proceeds from sale of assets 10,911,509 45,532
(Increase) decrease in other assets (17,423) 126,651
Increase in investments in mortgage loans (7,580,827) (5,044,708)
------------ ------------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES 3,018,972 (5,128,617)
FINANCING ACTIVITIES:
Long-term borrowings - 2,000,000
Dividends paid (161,155) -
Principal payments on long-term debt (6,365) (5,699)
(Increase) decrease in restricted cash (121,710) 5,157,173
Purchase of treasury stock (28,916) (70,769)
------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES (318,146) 7,080,705
INCREASE IN CASH AND CASH EQUIVALENTS 3,039,486 2,293,953
CASH AT BEGINNING OF YEAR 2,457,432 2,597,556
------------ ------------
CASH AT DECEMBER 31 $ 5,496,918 $ 4,891,509
============ ============
</TABLE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Accounting policies: Cash includes highly liquid investments with a
maturity of three months or less.
Interest: Cash paid during the first three months of 1996 for:
Interest $389,116
Federal income taxes 30,000
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
===================================================================
NOTE 1 - MANAGEMENT'S OPINION REGARDING INTERIM FINANCIAL STATEMENTS
In the opinion of management, all adjustments (consisting of
normal recurring accruals) necessary for a fair statement of the
results of operations for the interim period included herein have
been made.
The accounting policies followed by the Company are set forth
in Note 1 to the Company's consolidated financial statements for
the fiscal year ended September 30, 1995, included in the Company's
Annual Report on Form 10-KSB.
NOTE 2 - TRANSACTIONS WITH RELATED PARTIES
A law firm in which an officer of the Company holds "of
counsel" status provides legal services to the Company. The
Company believes that such services are provided on terms no less
favorable to the Company than those which would be obtainable from
third parties providing similar services.
The Company holds real estate loans with respect to nineteen
properties owned by third parties. These properties are managed by
a corporation in which an officer of the Company is an officer and
minority shareholder. Management fees payable under the management
agreements are subordinated to receipt by the Company of minimum
required debt service payments under the loans.
The Company maintains depository and investment accounts in a
bank subsidiary of JeffBanks, Inc., in which the Chairman of the
Company serves as a director. The Chairman's wife is a director
and executive officer of JeffBanks, Inc.
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
------------ -------------
<S> <C> <C>
Mortgage note payable to a bank, secured by real estate,
monthly installments of approximately $3,300 including
interest at 3/4% above the prime rate through May 2002 $ 234,982 $ 241,347
Loan payable to a bank, 20 equal semiannual installments
of $32,143 and quarterly payments of interest at 84% of
the prime rate through July 1996, at which time the rate
converts to 1/2% above the prime rate through 2003 482,128 482,128
9.5% senior secured note payable, interest due semi-
annually, principal due May 2004 7,893,333 7,890,207
------------ -------------
8,610,443 8,613,682
Less amounts payable in one year 91,000 91,000
------------ -------------
$ 8,519,443 $ 8,522,682
============ =============
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
===================================================================
The long-term debt maturing over the next five years is as
follows: 1996 - $91,000; 1997 - $94,000; 1998 - $97,000; 1999 -
$101,000; and 2000 - $105,000.
The senior secured note payable is collateralized by
substantially all of the Company's oil and gas properties. Certain
credit agreements require the Company to comply with certain
restrictive covenants. At December 31, 1995, the Company was in
compliance with such covenants.
NOTE 4 - FORMATION OF LIMITED PARTNERSHIPS
In 1989 and 1990, the Company sponsored two pipeline income
program limited partnerships (the "1989 Program" and "1990
Program") which purchased pipeline systems from the Company.
The Company had guaranteed that the limited partners in these
programs would receive cash distributions during each of the first
two years of the operation of the programs equal to 12% of their
capital contributions to the programs. To the extent that cash
flow to the programs was less than 12%, the Company contributed
sufficient capital to allow the guaranteed distributions to the
limited partners to be made. The Company believes the amount
contributed for such distributions ($693,000), for which it is
entitled to be repaid on a preferential basis upon termination of
the programs, will be realized upon final disposition of the
pipelines.
The limited partners in both programs have the right to sell
their interests in the programs to the Company following the fifth
anniversary of the respective program's closing at a price equal to
4.5 times the cash flow per unit during the fifth year of
partnership operations, subject to a maximum sale price of $50,000
per unit. The limited partners may also cause the sale of the
pipelines after the fifth year of the respective partnership's
operations. In accordance with the terms of the limited
partnership agreement, during fiscal 1995 the Company repurchased
a total of 20 units from limited partners in the 1989 Program, for
a total cost of approximately $240,000. The Company purchased four
units from limited partners in the 1990 program in the first
quarter of fiscal 1996 for approximately $38,000.
NOTE 5 - INVESTMENTS IN REAL ESTATE
At December 31, 1995 the Company held real estate loans having
aggregate face values of $52,228,000 which were being carried at
aggregate costs of $16,292,000. The following is a summary of the
changes in the carrying value of the Company's investments in real
estate loans for the quarter ended December 31, 1995:
Balance, September 30, 1995 $ 17,991,415
New real estate loans 7,385,896
Additions to existing loans 194,931
Accretion of discount 128,666
Gains on sale of loan participations and
refinancings (revenue contribution) 1,447,027
Proceeds (cash):
Refinancings (6,487,000)
Participations (4,369,000)
--------------
Balance, December 31, 1995 $ 16,291,935
==============
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
===================================================================
Investments in real estate loans at December 31 consist of:
<TABLE>
<CAPTION>
December 31, September 30,
1995 1995
<S> <C> <C>
Property 001 Subordinated wraparound note, face value of
$4,500,000, secured by residential real estate
located in Pittsburgh, PA, interest at 14.5%,
due December 31, 2002 $ 2,331,951 $ 2,334,850
Property 002 Mortgage note, face value of $1,080,000,
secured by residential real estate located in
Philadelphia, PA, interest at 12%, due October
31, 1998. In June 1995, the Company sold a
senior participation in this mortgage for
$600,000, resulting in a remaining face value
due the Company of $797,000 178,132 147,972
Property 003 Mortgage note, face value of $1,312,000,
secured by residential real estate located in
Philadelphia, PA, interest at 2 1/2% over the
monthly national median annualized cost of
funds for SAIF-insured institutions as
announced by the Federal Deposit Insurance
Corporation, due October 31, 1998. In June
1995, the Company sold a senior participation
in this mortgage for $896,000, resulting in a
gain of $209,000 and a remaining face value
due the Company of $479,000 193,925 189,347
Property 004 Mortgage note, face value of $4,234,000,
secured by commercial real estate located in
Pittsburgh, PA, interest at 10.6%, due October
31, 1998. In June 1995, the Company sold a
senior participation in this mortgage for
$840,000, resulting in a gain of $146,000 and
a remaining face value due the Company of
$3,498,000 684,058 675,805
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
===================================================================
Property 005 Note, face value of $3,559,000, secured by
an unrecorded deed relating to real estate
located in Philadelphia, PA, interest at 2%
over the yield of one-year United States
Treasury securities, due July 31, 1998 720,474 724,422
Property 006 Mortgage note, face value of $1,798,000,
secured by residential real estate located in
Margate, NJ, interest at the Chase Manhattan
Bank prime rate (but not less than 9% nor
greater than 15.5%), due January 1, 2003. In
June 1995, the Company sold a senior
participation in this mortgage for $685,000,
resulting in a remaining face value due the
Company of $1,370,000 437,629 424,749
Property 007 Note, face value of $1,776,000, secured by a
judgment lien, relating to real estate located in
St. Cloud, MN, interest at 10%, due December
31, 2014 487,196 489,196
Property 008 Note, face value of $4,183,000, interest at 1/2%
over the Maryland National Bank prime rate,
due October 31, 1998 1,496,952 1,469,899
Property 009 Subordinated wraparound note, face value of
$12,000,000 consisting of a first mortgage held
by the Company of $9,000,000 secured by
commercial real estate located in Washington,
D.C., a note and a $3,000,000 second
mortgage held by an unrelated party, interest
at 12%, due November 30, 1998. In October
1995, the owner of the property refinanced the
note with an unaffiliated party, simultaneously
paying the Company $6,487,000 toward
principal and interest on this loan 3,000,945 9,252,716
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
===================================================================
Property 010 Mortgage note, face value of $1,211,000,
secured by residential real estate located in
Philadelphia, PA, interest at 3% over the
Federal Home Loan Bank of Pittsburgh rate,
due September 2, 1999. In June 1995, the
Company sold a senior participation in this
mortgage for $600,000, resulting in a remaining
face value due the Company of $827,000 109,713 107,450
Property 011 Mortgage note, face value of $900,000, secured
by commercial real estate located in
Washington, D.C., interest at 1 1/2% over the
First Union National Bank rate, due September
30, 1999. In June 1995, the Company sold a
senior participation in this mortgage for
$685,000, resulting in a remaining face value
due the Company of $345,000 308,310 289,504
Property 012 Note, face value of $736,000, interest at 2%
over the Mellon Bank prime rate, due October
31, 1999 552,824 545,077
Property 013 Mortgage notes, face value of $1,962,000,
secured by residential real estate located in
Philadelphia, PA, varying interest rates from
9 1/2% to 14.5%, due December 2, 1999. In
June 1995, the Company sold a senior
participation in this mortgage for $1,160,000,
resulting in a remaining face value due the
Company of $1,096,000 257,164 195,092
Property 014 Mortgage note, face value of $3,000,000,
secured by commercial real estate located in
Pasadena, CA, interest at 2.75% over the
average cost of funds to FSLIC-insured savings
and loan associations, 11th District (but not less
than 5.5% nor greater than 15.5%), due May
1, 2001. In September, 1995, the Company
sold a senior participation in this mortgage for
$2,000,000 resulting in a remaining face value
due the Company of $1,004,000 297,505 295,608
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
===================================================================
Property 015 Subordinated wraparound note, face value of
$3,500,000, secured by residential real estate
located in New Concord, NC, interest at 12%,
due August 25, 2000 203,224 146,765
Property 016 Wraparound note, face value of $5,198,000,
secured by real estate located in Rancho
Cordova, CA, interest at 8.5%, due December
31, 2019. In November 1995, the Company
bought the underlying first mortgage for
$1,328,000 and sold a senior participation in
this mortgage for $2,400,000 resulting in a
gain of $779,000 and a remaining face value
due the Company of $4,143,000 405,253 702,963
Property 017 Mortgage note, face value of $4,627,000,
secured by residential real estate located in
Philadelphia, PA, interest at 7.75%, due
September 12, 1998 3,697,650 -
Property 018 Mortgage note, face value of $2,615,000,
secured by commercial real estate located in
Northridge, CA, interest at 9%, due
December 27, 2000 579,030 -
Property 019 Subordinated wraparound note, face value of
$1,173,000 secured by commercial real estate located in
Elkins, WV, interest at 13.6%, due in equal installments
through December 31, 2018 350,000 -
------------ ------------
$ 16,291,935 $ 17,991,415
============ ============
</TABLE>
As referenced above, in December 1995, the Company sold senior
participations in two real estate loans to an insurance company,
pursuant to which the Company agreed to replace any non-performing
loan with a similar but performing loan. In addition, the Company
issued to the insurance company warrants to purchase 65,535 shares
of the Company's common stock at the price of $11.75 per share.
Further, as referenced above, owners of one property on which the
Company held a mortgage note refinanced that note with an
unaffiliated party. The Company received payments of principal and
interest on this mortgage.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Real estate finance revenues represent interest and fees
earned and gains recognized on real estate loans owned by the
Company. Real estate finance revenues increased to $2,085,000 in
the first quarter of fiscal 1996 from $688,000 in the prior year.
This increase was attributable to an increase in the average amount
of real estate loans outstanding and gains recognized on the
refinancing and sale of participations in loans held by the
Company. During the first quarter of 1996, the Company purchased
four real estate loans, for a total cost of $7,386,000 as compared
to four loans for a total cost of $4,985,000 in the prior year.
The Company also realized gains of $1,447,000 in connection with
the refinancing of one loan and the sale of participation interests
in two loans during the first quarter of fiscal 1996. No such
gains were recognized in the first quarter of the prior fiscal
year.
Oil and gas revenues for the quarter ended December 31, 1995
decreased 2% compared to the same quarter of the previous year. A
comparison of the Company's revenues, daily production volumes, and
average sales prices follows:
Quarter Ended December 31,
Revenues (in thousands) 1995 1994
-------------------------------------------------------------
Gas $ 680 $ 701
Oil 134 131
Production Volumes
-------------------------------------------------------------
Gas (Mcf/day) 3,398 3,183
Oil (Bbls/day) 87 85
Average Sales Price
-------------------------------------------------------------
Gas (per Mcf) $ 2.18 $ 2.39
Oil (per Bbl) 16.70 16.86
Natural gas revenues decreased 3% due to a 9% decrease in the
average price per mcf of natural gas produced partially offset by
a 7% increase in production volumes for the quarter ended December
31, 1995, as compared to the prior year. Oil revenues increased by
2% due to a 3% increase in production volumes and a 1% decrease in
the average price received per barrel of oil for the quarter ended
December 31, 1995, as compared to the prior year.
<PAGE>
Natural gas production volumes for the quarter were down 14%
in the Company's New York field of operations due to the natural
decline in production from existing wells. Production volumes in
the Company's Ohio fields of operation increased 15% compared to
the same period of the prior year as a result of the acquisition of
additional interests in existing wells from limited partners and
other third parties. The Company spent a total of $756,000 in the
prior two years to acquire these interests. The Company also
participated in the drilling of three successful exploratory wells
and recompleted one successful developmental well during fiscal
1995. During the first quarter of fiscal 1996 the Company
participated in the drilling of one successful developmental well
and intends to participate in the drilling of additional wells
during the remainder of fiscal 1996.
The Company's oil and gas revenues have been and will continue
to be affected by changes in oil and gas prices. The Company is
unable to control or accurately predict these changes in prices.
The Company's proved developed reserves are predominantly natural
gas.
Well services revenues decreased 18% over the same period of
the prior year due to a decrease in the number of wells operated
for limited partners.
Equipment leasing represents fees associated with managing
limited partnerships in which the Company is a general partner as
well as lease brokerage fees and the Company's pro rata share of
income from these partnerships. The Company acquired this business
in September, 1995.
Financial services revenues increased 42% for the quarter
ended December 31, 1995, as a result of additional tax reporting
services provided to certain leasing partnerships.
Interest income increased substantially in the first quarter
of fiscal 1996 over the similar period of the prior year. This
increase was due to higher average funds temporarily invested.
COSTS AND EXPENSES
Production and transmission expenses decreased $41,000, or
10%, for the quarter ended December 31, 1995. This decrease was
primarily attributable to decreased workover costs as compared to
the prior year.
Real estate finance expenses decreased 10% for the quarter
ended December 31, 1995, compared to the same period a year ago.
This decrease is a result of lower personnel costs associated with
the Company's real estate financing activities.
Equipment leasing expense includes costs incurred in the
managment of equipment leasing partnerships in which the Company is
a general partner. In accordance with the terms of the related
partnership agreements, the Company is reimbursed by the
partnerships for certain general and administrative expenses
incurred and allocable, directly or indirectly, to the
partnerships. Such reimbursements are netted against equipment
leasing expense.
Exploration costs decreased for the quarter due to reduced
impairment and abandonment of non-producing properties in the
current year.
General and administrative expenses increased 24% due to an
increase in legal and personnel costs.
<PAGE>
Depreciation and amortization consists primarily of
amortization of oil and gas properties which, as a percentage of
oil and gas revenues, increased from 28% to 32% in the first
quarter of fiscal 1996 as compared to the prior year. Variations
from period to period are attributable to changes in the Company's
oil and gas reserve quantities, product prices, and fluctuations in
the depletable costs basis of oil and gas properties.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased by $3,039,000 during the
three months ended December 31, 1995, primarily due to proceeds
received upon sales of loan participations and refinancings.
The Company invested $7,386,000 in the acquisition of four
real estate loans and advanced $195,000 on existing loans held by
the Company during the first quarter of fiscal 1996 as compared to
the investment of $4,985,000 in the acquisition of four real estate
loans and $60,000 in advances during the similar prior period. In
addition, the Company sold senior participations in two loans and
received proceeds upon the refinancing of one loan amounting to
$10,912,000 in the first quarter of fiscal 1996. No such proceeds
were received in the first quarter of the prior fiscal year. As a
result, the Company's cash provided by investing activities
increased $8,148,000 during the first quarter of fiscal 1996, as
compared to the prior year.
The Company's cash flow provided by financing activities
decreased $7,399,000 during the first quarter of fiscal 1996 as
compared to the prior year. During the first quarter of fiscal
1995, the Company (i) sold a $2,000,000 note, and (ii) by pledging
substantially all of the Company's oil and gas properties as
collateral security for the Company's May 1995 $8,000,000 senior
secured note, was able to make available for corporate investment
purposes $5,157,000 in previously restricted cash. In addition,
the Company resumed the payment of dividends in the fourth quarter
of fiscal 1995 and paid $161,000 in dividends the first quarter of
fiscal 1996.
The Company's capital spending is predominantly discretionary-
- -the ultimate level of spending will depend on, among other things,
the Company's assessment of investment opportunities in the real
estate finance, energy and equipment leasing industries. In real
estate, the Company will continue to expand its real estate loan
portfolio as, and when, economically attractive opportunities
become available. In energy, the Company will seek to add to its
reserve base through selected acquisition of producing properties
and further development of the Company's mineral interests.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
3.3 Amendment to Certificate of Incorporation of
Resource America, Inc., effective October 19, 1995.
10.21 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Daniel G. Cohen and Resource America, Inc. dated
December 18, 1995.
10.22 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Freddie M. Kotek and Resource America, Inc. dated
December 18, 1995.
10.23 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Michael L. Staines and Resource America, Inc. dated
December 18, 1995.
10.24 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Scott F. Schaeffer and Resource America, Inc. dated
December 18, 1995.
10.25 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Edward E. Cohen and Resource America, Inc. dated
December 18, 1995.
10.26 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Jeffrey C. Simmons and Resource America, Inc. dated
December 18, 1995.
10.27 Grant of Incentive Stock Option Pursuant to
Resource America, Inc. 1989 Key Employee Stock Option Plan
between Nancy J. McGurk and Resource America, Inc. dated
December 18, 1995.
10.28 Amendment No. 1 to the Resource America, Inc. 1989 Key
Employee Stock Option Plan effective October 16, 1995.
<PAGE>
10.29 Warrant to purchase 36,000 shares of Class B Common stock
of Resource America, Inc., issued to Physicians' Insurance
Company of Ohio, dated December 26, 1995.
10.30 Warrant to purchase 29,535 shares of Class B Common stock
of Resource America, Inc., issued to Physicians' Insurance
Company of Ohio, dated December 27, 1995.
11.1 Calculation of Primary and Fully Diluted Earnings per share.
27 Financial Data Schedule
b) Reports on Form 8-K:
During the quarter for which this report is being filed,
the Registrant filed a current report on Form 8-K dated September
27, 1995, reporting the acquisition of Fidelity Leasing
Corporation. This report included Financial Statements of the
business acquired and Pro Forma Financial Information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
RESOURCE AMERICA, INC.
(Registrant)
Date February 14, 1996 By /s/ Michael L. Staines
------------------------ ----------------------------
Michael L. Staines
Senior Vice President and Secretary
Date February 14, 1996 By /s/ Nancy J. McGurk
------------------------ ----------------------------
Nancy J. McGurk
Vice President - Finance and
Treasurer
<PAGE>
EXHIBIT 3.3
RESOURCE AMERICA, INC.
CERTIFICATE OF AMENDMENT
of
CERTIFICATE OF INCORPORATION
___________________________________
The undersigned, being the duly elected, qualified and acting
President and Secretary, respectively, of Resource America, Inc.,
a Delaware corporation, hereby certify that the Amendment of
Incorporation attached as an Exhibit hereto was duly adopted by
the stockholders of the Company at the Special Meeting of
Stockholders held on October 16, 1995, in accordance with Section
242 of the Delaware Corporation Law.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands
this 19th day of October, 1995.
RESOURCE AMERICA, INC.
By: /s/ Edward E. Cohen
_____________________
Edward E. Cohen
President
Attest: /s/ Michael L. Staines
_____________________
Michael L. Staines
Secretary
<PAGE>
EXHIBIT A
---------
AMENDMENT TO
CERTIFICATE OF INCORPORATION
The first paragraph of Article IV ("ARTICLE IV") of the Company's
Certificate of Incorporation, as heretofore amended (the
"CERTIFICATE"), be further amended to read in its entirety as
follows:
"The total number of shares of capital stock which the
Corporation shall have authority to issue is four million
five hundred thousand (4,500,000), of which two million
(2,000,000) shall be shares of Class A Common Stock
(hereinafter called "CLASS A COMMON STOCK"), with a par
value of one cent ($.01) per share, one million five hundred
thousand (1,500,000) shall be shares of Class B Common Stock
(hereinafter called "CLASS B COMMON STOCK") (Class A Common
Stock and Class B Common Stock are hereinafter sometimes
collectively called "COMMON STOCK"), with a par value of one
cent ($.01) per share and one million (1,000,000) shall be
shares of Preferred Stock (hereinafter call "PREFERRED
STOCK"), with a par value of one dollar ($1.00) per share.";
and further that Article IV be further amended by adding the
following as a new subparagraph 1, with all subsequent
subparagraphs being renumbered accordingly:
"1. The rights, preferences and limitations of all of
the shares of Class A Common Stock and Class B Common Stock
shall be identical except for the following:
(i) Subject to subparagraph 1(ii), below, at all
shareholder's meetings for the election of directors,
the holders of Class A Common Stock, voting separately,
shall be entitled to elect a majority of the directors.
(ii) So long as there are any shares of Class A Common
Stock issued and outstanding, at all shareholders'
meetings for the election of directors, the holders of
Class B Common Stock, voting separately, shall be
entitled to elect a number of directors being one (1)
less than the number of directors elected by Class A
Common Stock, provided, however, if there are no shares
of Class B Common Stock outstanding, all directors
shall be elected by the holders of Class A Common
Stock, and provided further that if the number of
shares of Class A Common Stock issued and outstanding
exceeds the number of shares of Class B Common Stock
issued and outstanding, the number of directors which
the holders of Class B Common Stock are entitled to
elect hereunder (subject, however to the limitation
first above stated in this subparagraph 1(ii)) shall be
equal to the total number of all directors multiplied
by the ratio of outstanding shares of Class B Common
Stock to the total number of outstanding shares of
Common Stock of both classes, with such product rounded
down to the nearest whole number.
(iii) Where the board of directors of the Corporation
is divided into classes of directors, the positions of
the directors electable by the Class B Common Stock (a)
shall be allocated equally among the classes of
directors in inverse order of the initially established
dates of expiration of terms of such classes and (b) if
the number of directors electable by the Class B Common
Stock is greater than the number of classes of
directors (but not evenly divisible thereby), then the
positions of such directors shall be allocated equally
among the classes of directors until there remains a
number of unallocated director positions which is less
than the number of classes, and such unallocated
director positions shall be allocated to classes as set
forth in clause (a). Allocations of director positions
due to an increase in the number of directors electable
by the Class B Common Stock shall be made as if prior
allocations were made as part of the new allocation.
Termination of director positions due to a decrease in
the number of directors electable by the Class B Common
Stock shall be done in inverse order of establishment
of such positions or, if the number of positions to be
terminated is less than the number of positions
established at a particular time, then in inverse order
of the dates of termination of the class terms, and in
all other cases by lot.
(iv) The shares of Class B Common Stock will be
automatically converted into Class A Common Stock upon
the first to occur of the following events: (A) a
Change in Control (as such term is hereinafter defined)
of the Corporation; (B) the date on which the
Securities and Exchange Commission declares effective a
registration statement filed by the Company under the
Securities Act of 1933, as amended (the "1933 ACT")
with respect to the offer and sale of either class of
Common Stock, except for a registration statement on
Form S-8 (relating to an offering of securities
pursuant to employee benefit plans); (C) a material
monetary default by the Company under any of its loan
obligations; (D) the later to occur of May 1, 2001 or
four years following exercise of one or more Warrants
(as such term is defined below); (E) the death of
Edward E. Cohen ("COHEN"), (F) the disability of Cohen
such that he is incapable of discharging his duties as
an officer of the Company provided that such disability
shall operate continuously for a period of not less
than one hundred eighty (180) days; (G) the resignation
or removal of Cohen as an officer and director of the
Company; (H) a reduction in the aggregate number of
shares of Common Stock of all classes held by
Cohen directly or indirectly to an amount less than 75%
of the amount held by him as of August 15, 1995
(provided that, for these purposes, shares transferred
by Cohen to his spouse or their children, or to
entities of which fifty percent (50%) or more of the
equity or beneficial interest is owned by one or more
of Cohen, his spouse or their children ("FAMILY
MEMBERS") or to other affiliates as such term is
defined under the 1933 Act shall be deemed to be held
by Cohen); (I) the sale, transfer or other conveyance
by Cohen of all or substantially all of the aggregate
voting rights in common stock in the Corporation and
Bryn Mawr Resources, Inc. ("BRYN MAWR") held by him of
record, or beneficially (with power to direct voting),
to one or more unaffiliated third parties for a period
in excess of one year; or (J) the filing by the
Corporation of a petition under Chapters 7 or 11 of the
United States Bankruptcy Code. For purposes of this
subparagraph 1(iv), a Change of Control of the
Corporation means (X) an acquisition by any person
(other than Family Members or other affiliates of
Cohen) of 50% or more of the shares of Class A Common
Stock without approval of a majority of the incumbent
board of directors of the Corporation, including a
majority of the directors elected by the Class A Common
Stock; (Y) a change in the composition of a majority of
the directors elected by the Class A Common Stock from
the composition on August 1, 1995 except changes
approved by a majority of directors comprising the
incumbent board, including a majority of the directors
elected by the Class A Common Stock; and (Z)
acquisition of 50% or more of the voting securities of
Bryn Mawr by any person (other than Family Members or
affiliates of Cohen) without approval of a majority of
the then incumbent board of directors of Bryn Mawr.
For purposes of clause (H) of this subparagraph 1(iii),
Cohen shall be deemed to hold, directly or indirectly,
shares of Common Stock held by Bryn Mawr, B&C
Investments, Inc. ("B&C") (or their successors in
interest) or other entities in which he, either by
himself or in combination with or through Family
Members or affiliates, owns fifty percent (50%) or more
of the equity of beneficial interest; provided,
however, that Cohen's indirect interest in shares of
Common Stock held by Bryn Mawr or B&C shall be
proportionate to his equity interest in Bryn Mawr and
B&C. For purposes of clause (C) of this subparagraph
1(iii), Warrants shall mean those warrants for the
purchase of up to 350,000 shares of the Corporation's
Class B Common Stock issued or issuable to Physician's
Insurance Company of Ohio as of August 1, 1995, and
such other warrants as the Board of Directors shall
determine by majority vote.
(v) At such time as all Class B Common Stock shall have
been converted to Class A Common Stock, no additional
Class B Common Stock shall be issued and all Class A
Common Stock shall become common stock of the
Corporation without further designation and all
provisions herein relating separately to Class B Common
Stock shall have no further force and effect."
and further that Article IV be further amended by adding in
subparagraph 6 (formerly designated subparagraph 5) at the
beginning thereof, the phrase
"Subject to subparagraph 1, above,"
This Amendment, and the changes provided for herein, shall be
effective at 4:30 P.M. on the date that such amendment is filed
with the Secretary of State of Delaware.
<PAGE>
EXHIBIT 10.21
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between DANIEL G. COHEN, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 4,000 shares of Stock at a price of $23.00 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Daniel G. Cohen
-----------------------------
DANIEL G. COHEN, Grantee
<PAGE>
EXHIBIT 10.22
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between FREDDIE M. KOTEK, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 14,000 shares of Stock at a price of $23.00 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Freddie M. Kotek
-----------------------------
FREDDIE M. KOTEK, Grantee
<PAGE>
EXHIBIT 10.23
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between MICHAEL L. STAINES, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 4,000 shares of Stock at a price of $23.00 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Michael L. Staines
-----------------------------
MICHAEL L. STAINES, Grantee
<PAGE>
EXHIBIT 10.24
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between SCOTT F. SCHAEFFER, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 8,000 shares of Stock at a price of $23.00 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Scott F. Schaeffer
-----------------------------
SCOTT F. SCHAEFFER, Grantee
<PAGE>
EXHIBIT 10.25
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between EDWARD E. COHEN, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 34,000 shares of Stock at a price of $25.30 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of five years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Edward E. Cohen
-----------------------------
EDWARD E. COHEN, Grantee
<PAGE>
EXHIBIT 10.26
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between JEFFREY C. SIMMONS, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 4,000 shares of Stock at a price of $23.00 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Jeffrey C. Simmons
-----------------------------
JEFFREY C. SIMMONS, Grantee
<PAGE>
EXHIBIT 10.27
GRANT OF INCENTIVE STOCK OPTION
PURSUANT TO RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
-----------------------------------
THIS AGREEMENT, made this 18th day of December, 1995
("Date of Grant") by and between NANCY J. MCGURK, Grantee and
RESOURCE AMERICA, INC. (together with its successors or assigns
hereinafter referred to as the "Company").
WHEREAS, the Board of Directors of Resource America, Inc.
(the "Board") previously adopted, with subsequent stockholder
approval, the Resource America, Inc. 1989 Key Employee Stock Option
Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock options by a committee to be appointed by the Board (the
"Committee") to eligible employees of the Company to purchase, or
to exercise certain rights with respect to, shares of the Class A
Common Stock of the Company, par value $.01 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a
person who is eligible for a grant of incentive stock options under
the Plan, and has determined that it would be in the best interest
of the Company to grant the incentive stock options on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set
forth, the Company, with the approval and at the direction of the
Committee, hereby grants to the Grantee, an option to purchase up
to 4,000 shares of Stock at a price of $23.00 per share. Such
option is hereinafter referred to as the "Option" and the shares of
stock purchasable upon exercise of the Option are hereinafter
sometimes referred to as the "Option Shares." The Option is
intended by the parties hereto to be, and shall be treated as, an
incentive stock option (as such term is defined under Section 422
of the Internal Revenue code of 1986).
2. INSTALLMENT EXERCISE.
(a) Subject to such further limitations as are
provided herein, the Option shall become exercisable in four (4)
installments, the Grantee having the right hereunder to purchase
from the Company the following number of Option Shares upon
exercise of the Option, on and after the following dates, in
cumulative fashion:
(i) on and after the first anniversary of the
Date of Grant, up to 25% (ignoring fractional shares) of the total
number of Option Shares;
(ii) on and after the second anniversary of the Date
of Grant, up to an additional 25% (ignoring fractional shares) of
the total number of Option Shares; and
(iii) on and after the third anniversary of the
Date of Grant, up to an additional 25% (ignoring fractional shares)
of the total number of Option Shares; and
(iv) on and after the fourth anniversary of the
Date of Grant, the remaining Option Shares.
(b) Subsection (a) notwithstanding, in the event of
a "Change in Control," all of the Option Shares granted hereunder
may be exercised immediately. For purposes of this Agreement, a
"Change in Control" takes place when either of the following
occurs:
(i) Any person (other than the Company or any
of its subsidiaries or employee benefit plan sponsored by the
Company) or group of persons acting in concert acquires, within any
12-month period, in excess of 20% of the then outstanding shares of
the common stock of the Company.
(ii) the failure of the Board of Directors of
the Company as it is constituted on December 1, 1995, to constitute
the majority of the Board of Directors, unless such failure results
from an election of directors in which a majority of the
outstanding shares of the common stock of the Company (excluding
all common stock beneficially owned by a person who beneficially
owns 30% or more of the outstanding shares) are voted in favor of
the successor directors. In determining a person's stock ownership
the attribution rules of Section 318(a) of the Code shall apply.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with
respect thereto, to the extent such rights shall not have been
exercised, shall terminate and become null and void after the
expiration of ten years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing
for any reason to be employed by the Employer (such occurrence
being a "termination of the Grantee's employment"), the Option, to
the extent no previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the Grantee's
employment is by reason of retirement, disability or death, or
after a Change in Control.
Upon a termination of the Grantee's employment by
reason of retirement, disability or death, or after A Change in
Control, the Option may be exercised during the following periods,
but only to the extent that the Option was outstanding and
exercisable on any such date of retirement, disability or death:
(i) the six-month period following the date of such termination of
the Grantee's employment in the case of a disability (within the
meaning of Section 22(e)(3) of the Code) or after a Change in
Control, (ii) the six-month period following the date of issuance
of letters testamentary or letters of administration to the
executor or administrator of a deceased Grantee, in the case of the
Grantee's death during his employment by the Employer, but not
later than one year after the Grantee's death, and (iii) the three-
month period following the date of such termination in the case of
retirement on or after attainment of age 65, or in the case of
disability other than as described in (i) above. In no event,
however, shall any such period extend beyond the Option Term.
(c) In the event of the death of the Grantee,
the Option may be exercised by the Grantee's legal
representative(s), but only to the extent that the Option would
otherwise have been exercisable by the Grantee.
(d) A transfer of the Grantee's employment
between Company and any subsidiary of Company, or between any
subsidiaries of Company, shall not be deemed to be a termination of
the Grantee's employment.
(e) Notwithstanding any other provisions set
forth herein or in the Plan, if the Grantee shall (i) commit any
act of malfeasance or wrongdoing affecting the Company or any
subsidiary of Company, (ii) breach any covenant not to compete, or
employment contract, with Company or any subsidiary of Company, or
(iii) engage in conduct that would warrant the Grantee's discharge
for cause (excluding general dissatisfaction with the performance
of the Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon the Company or any
subsidiary of the Company), any unexercised portion of the Option
shall immediately terminate and be void.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with
respect to all or any part of the number of Option Shares then
exercisable hereunder by giving the Secretary of Company written
notice of intent to exercise. The notice of exercise shall specify
the number of Option Shares as to which the Option is to be
exercised and the date of exercise thereof, which date shall be at
least five days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the
Grantee of the option price for the Option Shares purchased shall
be made on or before the exercise date specified in the notice of
exercise in cash, or, with the prior written consent of the
Committee, in whole or in part through the surrender of previously
acquired shares of Stock at their fair market value on the exercise
date.
On the exercise date specified in the Grantee's
notice or as soon thereafter as is practicable, Company shall cause
to be delivered to the Grantee, a certificate or certificates for
the Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Company may elect) upon full payment
for such Option Shares. The obligation of Company to deliver Stock
shall, however, be subject to the condition that if at any time the
Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the Option or the issuance or purchase of Stock thereunder, the
Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the
Option Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may be
terminated by Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF COMPANY.
In the event of a reorganization, recapitalization,
change of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of Company, the
Committee shall make such adjustment as it deems appropriate in the
number and kind of shares of Stock subject to the Option or in the
option price; provided, however, that no such adjustment shall give
the Grantee any additional benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share
of Stock shall be the arithmetic mean of the closing bid and ask
sale prices for the Shares reported by the NASDAQ on a given day or
if there is no sale on such day, then the arithmetic mean of such
closing bid and ask sale prices on the last previous date on which
a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative
shall be, or shall have any of the rights and privileges of, a
stockholder of Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be trans-
ferable except, in the case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In no
event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
Company may terminate the Option by notice to the Grantee and it
shall thereupon become null and void.
9. EMPLOYMENT NOT AFFECTED.
The granting of the Option nor its exercise shall
not be construed as granting to the Grantee any right with respect
to continuance of employment of the Company. Except as may other-
wise be limited by a written agreement between the Company and the
Grantee, the right of the Company to terminate at will the
Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
Company, or the employing subsidiary (whichever the case may be),
and acknowledged by the Grantee.
10. AMENDMENT OF OPTION.
The Option may be amended by the Board or the
Committee at any time (i) if the Board or the Committee determines,
in its sole discretion, that amendment is necessary or advisable in
the light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal or
state securities law or other law or regulation, which change
occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. NOTICE.
Any notice to Company provided for in this
instrument shall be addressed to it in care of its Secretary at its
executive offices at 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the
payroll records of the Employer. Any notice shall be deemed to be
duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.
12. INCORPORATION OF PLAN BY REFERENCE.
The Option is granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and
the Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. GOVERNING LAW.
The validity, constructions, interpretation and
effect of this instrument shall exclusively be governed by and
determined in accordance with the law of the State of Ohio, except
to the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Company has caused its duly
authorized officers to execute and attest this Grant of Incentive
Stock Option, and to apply the corporate seal hereto, and the
Grantee has placed his or her signature hereon, effective as of the
Date of Grant.
RESOURCE AMERICA, INC.
By: /S/ Edward E. Cohen
-----------------------
President
Attest: /s/ Michael L. Staines
-----------------------
Secretary
ACCEPTED AND AGREED TO:
By: /s/ Nancy J. McGurk
-----------------------------
NANCY J. MCGURK, Grantee
<PAGE>
EXHIBIT 10.28
AMENDMENT NO. 1
TO THE
RESOURCE AMERICA, INC.
1989 KEY EMPLOYEE STOCK OPTION PLAN
The RESOURCE AMERICA, INC., 1989 KEY EMPLOYEE STOCK
OPTION PLAN (the "Plan"), effective October 1, 1989, is hereby
amended as follows:
1. Section 1(p) of the Plan is amended to read in
its entirety as follows:
(p) Shares. Shares shall mean the shares of
the Company's Class A common stock, $0.01 par value, and (i) any
stock or securities of the Company into which such common stock
is converted, (ii) any stock or securities of the company which
are distributed with respect to such common stock and (iii) the
stock and securities of any other corporation into which such
common stock is converted as a result of the Company's engaging
in any transaction described in Sec. 425(a) of the Code.
2. Section 3 of the Plan is amended by increasing
the number of shares for which Options or Stock Appreciation
Rights may be granted under the Plan from 70,000 (as adjusted for
the 10-to-1 reverse stock split) to 140,000.
3. All references in the Plan to "Sec. 422A of the
Code" shall be deemed to refer to "Sec. 422 of the Code."
4. The effective date of Section 1 of this
Amendment is October 16, 1995. The effective date of Section 2
of this Amendment shall be the later of the date the Amendment is
approved by an affirmative vote of the majority of the
shareholders of Resource America, Inc., or the date of adoption
by the Board of Directors. The effective date of Section 3 of
this Amendment shall be November 5, 1990.
5. All other terms of the Plan shall remain in full
force and effect.
IN WITNESS WHEREOF, the undersigned has caused this
Amendment to be executed by its duly authorized officers on this
16th day of October, 1995.
RESOURCE AMERICA, INC.
By: /s/ Edward E. Cohen
-------------------------
President
Attest: /s/ Michael L. Staines
-------------------------
Secretary
<PAGE>
EXHIBIT 10.29
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
VOID AFTER 5:00 P.M. PHILADELPHIA TIME ON DECEMBER 26, 2005 OR IF
NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., PHILADELPHIA
TIME, ON THE NEXT FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
36,000
SHARES OF CLASS B COMMON STOCK
OF
RESOURCE AMERICA, INC.
This Certifies that, for good and valuable consideration,
Physicians Insurance Company of Ohio, and its registered, permitted
assigns (collectively, the "Warrantholder"), is entitled to
purchase from Resource America, Inc., a corporation incorporated
under the laws of the State of Delaware (the "Company"), subject to
the terms and conditions hereof, at any time or after 9:00 A.M.,
Philadelphia time, on December 26, 1995, and before 5:00 P.M.,
Philadelphia time, on December 26, 2005 (or, if such day is not a
Business Day, at or before 5:00 P.M., Philadelphia time, on the
next following Business Day), the number of fully paid and non-
assessable shares of Class B Common Stock of the Company stated
above at the Exercise Price (as defined herein). The Exercise
Price and the number of shares purchasable hereunder are subject to
adjustment from time to time as provided in Article III hereof.
ARTICLE I
SECTION 1.01. DEFINITION OF TERMS. As used in this Warrant,
the following capitalized terms shall have the following respective
meanings:
(a) BUSINESS DAY: A day other than a Saturday, Sunday or
other day on which banks in the Commonwealth of Pennsylvania are
authorized by law to remain closed.
(b) CLASS B COMMON STOCK: Class B Common Stock, $.01 par
value per share, of the Company.
(c) CLASS B COMMON STOCK EQUIVALENTS: Securities that are
convertible into or exercisable for shares of Class B Common Stock.
(d) COMMON STOCK: All Common Stock, $.01 par value per
share, of the Company, regardless of the class.
(e) COMMON STOCK EQUIVALENTS: Securities that are
convertible into or exercisable for shares of Common Stock.
(f) EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended.
(g) EXERCISE PRICE: $11.75 per Warrant Share, as such
price may be adjusted from time to time pursuant to Article III
hereof.
(h) EXPIRATION DATE: 5:00 P.M., Philadelphia time, on
December 26, 2005 or if such day is not a Business Day, the next
succeeding day which is a Business Day.
(i) HOLDER: Any person owning or having a right to
acquire Warrant Shares or any assignee thereof.
(j) NASD: National Association of Securities Dealers,
Inc. and NASDAQ: NASD Automatic Quotation System.
(k) PERSON: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or
any department or agency thereof.
(l) PIGGYBACK REGISTRATION: See Article IV.
(m) REGISTERED SECURITIES: Any Registrable Securities
which have been included in an effective Registration Statement
pursuant to the terms of Article IV hereof.
(n) REGISTRABLE SECURITIES: Any Warrant Shares issued
to Physicians Insurance Company of Ohio and/or its designees or
transferees as permitted under Section 6.02 and/or other securities
that may be or are issued by the Company upon exercise of this
Warrant, including those which may thereafter be issued by the
Company in respect of any such securities by means of any stock
splits, stock dividends, recapitalizations, reclassifications or
the like, and as adjusted pursuant to Article III hereof; provided,
however, that as to any particular security contained in
Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a Registration Statement with
respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been
disposed of in accordance with such Registration Statement; or (ii)
they shall have been sold to the public pursuant to Rule 144 (or
any successor provision) under the Securities Act; or (iii) they
shall have been sold, assigned or otherwise transferred except as
permitted by Section 6.02 below.
(o) REGISTRATION STATEMENT: Any registration statement
of the Company filed or to be filed with the Securities and
Exchange Commission which covers any of the Registrable Securities
pursuant to the provisions of this Warrant, including all
amendments (including post-effective amendments) and supplements
thereto, all exhibits thereto and all material incorporated therein
by reference.
(p) SECURITIES ACT: The Securities Act of 1933, as
amended.
(q) TRANSFER: See Section 6.02.
(r) WARRANT: This Warrant and all other warrants that may
be issued in its or their place, together evidencing the right to
purchase an aggregate of 36,000 shares of Class B Common Stock as
the same may be adjusted pursuant to this Warrant.
(s) WARRANTHOLDER: The person(s) or entity(ies) to whom
this Warrant is originally issued, or any successor in interest
thereto, or any assignee or transferee thereof, in whose name this
Warrant is registered upon the books to be maintained by the
Company for that purpose.
(t) WARRANT SHARES: Class B Common Stock, Class B Common
Stock Equivalents and other securities purchased or purchasable
upon exercise of the Warrant.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
SECTION 2.01. DURATION OF WARRANT. The Warrantholder may
exercise this Warrant at any time and from time to time after 9:00
A.M., Philadelphia time, on December 26, 1995, and before 5:00
P.M., Philadelphia time, on the Expiration Date. If this Warrant
is not exercised on the Expiration Date, it shall become void, and
all rights hereunder shall thereupon cease.
SECTION 2.02. EXERCISE OF WARRANT.
(a) The Warrantholder may exercise this Warrant, in whole
or in part, by presentation and surrender of this Warrant to the
Company at its principal corporate office or at the office of its
stock transfer agent, if any, with the Subscription Form annexed
hereto duly executed and accompanied by payment of the full
Exercise Price for each Warrant Share to be purchased.
(b) Upon receipt of this Warrant with the Subscription
Form fully executed and accompanied by payment of the aggregate
Exercise Price for the Warrant Shares for which this Warrant is
then being exercised, the Company shall cause to be issued
certificates for the total number of whole shares of Class B Common
Stock for which this Warrant is being exercised (adjusted to
reflect the effect of the anti-dilution provisions contained in
Article III hereof, if any, and as provided in Section 2.04 hereof)
in such denominations as are requested for delivery to the
Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder. The Warrantholder shall be
deemed to be the holder of record of the shares of Class B Common
Stock issuable upon such exercise, notwithstanding that the stock
transfer books of the Company shall then be closed or that
certificates representing such shares of Class B Common Stock shall
not then be actually delivered to the Warrantholder. At the time
this Warrant is exercised, the Company may require the
Warrantholder to make such representations, and may place such
legends on certificates representing the Warrant Shares, as may be
reasonably required in the opinion of counsel to the Company to
permit the Warrant Shares to be issued in compliance with the
Securities Act.
(c) In case the Warrantholder shall exercise this Warrant
with respect to less than all of the Warrant Shares that may be
purchased under this Warrant, the Company shall execute a new
warrant in the form of this Warrant for the balance of such Warrant
Shares and deliver such new warrant to the Warrantholder.
(d) The Company shall pay any and all stock transfer and
similar taxes which may be payable in respect of the issue of any
Warrant Shares to the holder of the Warrant being exercised.
SECTION 2.03. RESERVATION OF SHARES. The Company hereby
agrees that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant such number of shares of
Class B Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant.
All such shares shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights.
SECTION 2.04. FRACTIONAL SHARES. The Company shall not be
required to issue any fraction of a share of its capital stock in
connection with the exercise of this Warrant, and in any case where
the Warrantholder would, except for the provisions of this Section
2.04, be entitled under the terms of this Warrant to receive a
fraction of a share upon the exercise of this Warrant, the Company
shall, upon the exercise of this Warrant and receipt of the
Exercise Price, issue the largest number of whole shares
purchasable upon exercise of this Warrant. The Company shall not
be required to make any cash or other adjustment in receipt of such
fraction of a share to which the Warrantholder would otherwise be
entitled.
ARTICLE III
ADJUSTMENT OF SHARES OF CLASS B COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares
shall be subject to adjustment from time to time upon the happening
of certain events as provided in this Article III.
SECTION 3.01. MECHANICAL ADJUSTMENTS.
(a) If at any time prior to the exercise of this Warrant
in full, the Company shall (i) declare a dividend or make a
distribution on the Common Stock payable in shares of its capital
stock (whether shares of Common Stock or of capital stock of any
other class); (ii) subdivide, reclassify or recapitalize its
outstanding Common Stock into a greater number of shares; (iii)
combine, reclassify or recapitalize its outstanding Common Stock
into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of its Common Stock (including
any such reclassification in connection with a consolidation or a
merger in which the Company is the continuing corporation), the
Exercise Price in effect at the time of the record date of such
dividend, distribution, subdivision, combination, reclassification
or recapitalization shall be adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of
shares which, if this Warrant had been exercised in full
immediately prior to such event, it or he would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination, reclassification
or recapitalization. Any adjustment required by this Paragraph
3.01(a) shall be made immediately after the record date, in the
case of a dividend or distribution, or the effective date, in the
case of a subdivision, combination, reclassification or
recapitalization, to allow the purchase of such aggregate number
and kind of shares.
(b) If at any time prior to the exercise of this Warrant
in full, the Company shall (i) issue or sell any Common Stock or
Common Stock Equivalents without consideration or for consideration
per share less than the Exercise Price in effect immediately prior
to the date of such issuance or sale (other than issuances of
securities upon the exercise of options granted under the Company's
currently existing stock option plans or upon the exercise of other
currently outstanding options) or (ii) fix a record date for the
issuance of subscription rights, options or warrants to all holders
of Common Stock entitling them to subscribe for or purchase Common
Stock (or Common Stock Equivalents) at a price (or having an
exercise or conversion price per share) less than the Exercise
Price in effect immediately prior to the record date described
below, the Exercise Price shall be adjusted so that the Exercise
Price shall equal the price determined by multiplying the Exercise
Price in effect immediately prior to the date of such sale or
issuance (which date in the event of distribution to shareholders
shall be deemed to be the record date set by the Company to
determine shareholders entitled to participate in such
distribution) by a fraction, the numerator of which shall be (i)
the number of shares of Common Stock outstanding on the date of
such sale or issuance, plus (ii) the number of additional shares of
Common Stock which the aggregate consideration received by the
Company upon such issuance or sale (plus the aggregate of any
additional amount to be received by the Company upon the exercise
of such subscription rights, options or warrants) would purchase at
such current Exercise Price per share of the Common Stock; and the
denominator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such issuance or sale, plus (ii)
the number of additional shares of Common Stock offered for the
subscription or purchase (or into which the Common Stock
Equivalents so offered are exercisable or convertible). Any
adjustments required by this paragraph 3.01(b) shall be made
immediately after such issuance or sale or record date, as the case
may be. Such adjustments shall be made successively whenever such
event shall occur. To the extent that shares of Common Stock (or
Common Stock Equivalents) are not delivered after the expiration of
such subscription rights, options or warrants, the Exercise Price
shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights,
options or warrants been made upon the basis of delivery of only
the number of shares of Common Stock (or Common Stock Equivalents)
actually delivered.
(c) If at any time prior to the exercise of this Warrant
in full, the Company shall fix a record date for the issuance or
distribution to all holders of the Common Stock (including any such
distribution to be made in connection with a consolidation or
merger in which the Company is to be the continuing corporation) of
evidences of its indebtedness, any other securities of the Company
or any cash, property or other assets (excluding a combination,
reclassification or recapitalization referred to in Section
3.01(a), regular cash dividends or cash distributions paid out of
net profits legally available therefor and in the ordinary course
of business or subscription rights, options or warrants for Common
Stock or Common Stock Equivalents (excluding those referred to in
Section 3.01(b) (any such non-excluded event being herein called a
"Special Dividend")), (i) the Exercise Price shall be decreased
immediately after the record date for such Special Dividend to a
price determined by multiplying the Exercise Price then in effect
by a fraction, the numerator of which shall be the Exercise Price
in effect on such record date less the fair market value (as
determined by the Company's Board of Directors) of the evidences of
indebtedness, securities or property, or other assets issued or
distributed in such Special Dividend applicable to one share of
Common Stock or of such subscription rights or warrants applicable
to one share of Common Stock and the denominator of which shall be
such Exercise Price then in effect and (ii) the number of shares of
Common Stock subject to purchase upon exercise of this Warrant
shall be increased to a number determined by multiplying the number
of shares of Common Stock subject to purchase immediately before
such Special Dividend by a fraction, the numerator of which shall
be the Exercise Price in effect immediately before such Special
Dividend and the denominator of which shall be the Exercise Price
in effect immediately after such Special Dividend. Any adjustment
required by this Section 3.01(c) shall be made successively
whenever such a record date is fixed and in the event that such
distribution is not so made, the Exercise Price shall again be
adjusted to be that in effect immediately prior to such record
date.
(d) If at any time prior to the exercise of this Warrant
in full, the Company shall make a distribution to all holders of
the Common Stock or stock of a subsidiary or securities convertible
into or exercisable for such stock, then in lieu of an adjustment
in the Exercise Price or the number of Warrant Shares purchasable
upon the exercise of this Warrant, each Warrantholder, upon the
exercise hereof at any time after such distribution, shall be
entitled to receive from the Company, such subsidiary or both, as
the Company shall determine, the stock or other securities to which
such Warrantholder would have been entitled if such Warrantholder
had exercised this Warrant immediately prior thereto, all subject
to further adjustment as provided in this Article III, and the
Company shall reserve, for the life of the Warrant, such securities
of such subsidiary or other corporation; provided, however, that no
adjustment in respect of dividends or interest on such stock or
other securities shall be made during the term of this Warrant or
upon its exercise.
(e) (i) If at any time prior to the exercise of this
Warrant in full, the Company shall issue securities upon the
exercise of options, warrants or other Common Stock Equivalents
granted under any stock option plan of the Company (except with
respect to up to 2,000 shares of Common Stock issuable in
connection with the Company's existing stock option plan) created
after the date of the issuance of this Warrant, then, in addition
to the adjustment in Exercise Price required by Section 3.01(b)
hereof, if any, the aggregate number of shares of Common Stock
issuable hereunder shall be increased to that number of shares
which is in the same ratio to the number of shares issuable prior
to the exercise giving rise to the need for adjustment hereunder as
the number of shares of Common Stock outstanding immediately prior
to the exercise giving rise to the need for adjustment hereunder is
to the number of shares of Common Stock outstanding immediately
after such exercise.
(ii) Except in the case of a transaction requiring
an adjustment pursuant to Section 3.01(e)(i) above, whenever the
Exercise Price payable upon exercise of this Warrant is adjusted
pursuant to paragraph (a), (b) or (c) of this Section 3.01, the
Warrant Shares shall simultaneously be adjusted by multiplying the
number of Warrant Shares initially issuable upon exercise of each
Warrant by the Exercise Price in effect on the date thereof and
dividing the product so obtained by the Exercise Price, as
adjusted.
(f) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least five cents ($.05) in such price; provided, however, that any
adjustments which by reason of this paragraph (f) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 3.01
shall be made to the nearest cent or the nearest one-hundredth of
a share, as the case may be. Notwithstanding anything in this
Section 3.01 to the contrary, the Exercise Price shall not be
reduced to less than the then existing par value of the Common
Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any
adjustment made pursuant to Section 3.01(a), the Warrantholder
shall become entitled to receive any shares of capital stock of the
Company other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Section 3.01(a) or this Section
3.01(g).
(h) In the case of an issue of additional Common Stock or
Common Stock Equivalents for cash, the consideration received by
the Company therefor before deducting therefrom any discount or
commission or other expenses paid by the Company for any
underwriting of, or otherwise in connection with, the issuance
thereof, shall be deemed to be the amount received by the Company
therefor. The term "issue" shall include the sale or other
disposition of shares held by or on account of the Company or in
the treasury of the Company but until so sold or otherwise disposed
of such shares shall not be deemed outstanding.
SECTION 3.02. NOTICES OF ADJUSTMENT. Whenever the number of
Warrant Shares or the Exercise Price is adjusted as herein
provided, the Company shall prepare and deliver forthwith to the
Warrantholder a certificate signed by an officer of the Company
setting forth the adjusted number of shares purchasable upon the
exercise of this Warrant and the Exercise Price of such shares
after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by
which adjustment was made.
SECTION 3.03. NO ADJUSTMENT FOR DIVIDENDS. Except as
provided in Section 3.01 of this Warrant, no adjustment in respect
of any cash dividends shall be made during the term of this Warrant
or upon the exercise of this Warrant.
SECTION 3.04. PRESERVATION OF PURCHASE RIGHTS IN CERTAIN
TRANSACTIONS. In case of any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common
Stock) or in case of any consolidation or merger of the Company
with or into another corporation (other than merger with a
subsidiary in which the Company is the continuing corporation and
that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock of the class issuable upon exercise of this Warrant) or in
the case of any sale, lease, transfer or conveyance to another
corporation of the property and assets of the Company as an
entirety or substantially as an entirety, the Company shall, as a
condition precedent to such transaction cause such successor or
purchasing corporation, as the case may be, to execute with the
Warrantholder an agreement granting the Warrantholder the right
thereafter, upon payment of the Exercise Price in effect
immediately prior to such action, to receive upon exercise of this
Warrant the kind and amount of shares and other securities and
property which he would have owned or have been entitled to receive
after the happening of such reclassification, change,
consolidation, merger, sale or conveyance had this Warrant been
exercised immediately prior to such action. Such agreement shall
provide for adjustments in respect of such shares of stock and
other securities and property, which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this
Article III. In the event that in connection with any such
reclassification, capital reorganization, change, consolidation,
merger, sale or conveyance, additional shares of Common Stock shall
be issued in exchange, conversion, substitution of payment, in
whole or in part, for, or of, a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common
Stock covered by the provisions of Article III. The provisions of
this Section 3.04 shall similarly apply to successive
reclassifications, capital reorganizations, consolidations,
mergers, sales or conveyances.
SECTION 3.05. FORM OF WARRANT AFTER ADJUSTMENTS. The form of
this Warrant need not be changed because of any adjustments in the
Exercise Price or the number or kind of the Warrant Shares, and
Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in this
Warrant, as initially issued.
ARTICLE IV
REGISTRATION UNDER THE SECURITIES ACT
SECTION 4.01. DEMAND REGISTRATION RIGHTS.
(a) If the Company shall receive, at any time after the
date hereof and while the Company is a reporting company as defined
in the Exchange Act, a written request (the "REQUEST") from the
Warrantholder that the Company file a Registration Statement under
the Securities Act covering the registration of the shares of
Registrable Securities that are the subject of the Request (a
"DEMAND REGISTRATION"), then the Company shall, subject to the
limitations of Section 4.02, use its best efforts to effect as soon
as practicable the registration under the Securities Act in
accordance with Subsection 4.02(a) hereof, of all Registrable
Securities which the Warrantholder requests be registered within
ninety (90) days of the Company's receipt of the Request.
(b) If the Warrantholder intends to distribute the
Registerable Securities covered by the Request by means of an
underwriting, the Warrantholder shall so advise the Company as a
part of the Request. In such event, the Warrantholder shall
(together with the Company as provided in Section 4.02(e)) enter
into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting which
underwriters shall include a regional or national underwriting firm
which is a member in good standing of the National Association of
Securities Dealers, Inc.
(c) Notwithstanding the foregoing, if the Company shall
furnish to the Warrantholders a certificate, signed in good faith
by the President of the Company, stating that the good faith
judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such
registration statement to be filed and it therefore essential to
defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period ending on the one
hundred eightieth day after the Company's receipt of the Request.
SECTION 4.02. OBLIGATIONS OF THE COMPANY. Whenever
required under this Warrant to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as
reasonably possible:
(a) Prepare and file with the SEC a Registration Statement
with respect to such Registrable Securities and use its best
efforts to cause such Registration Statement to become effective,
and, upon the request of the Warrantholder keep such Registration
Statement effective for up to one hundred twenty (120) days.
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used
in connection with such Registration Statement as may be necessary
to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration
Statement.
(c) Furnish to Warrantholder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition
of Registered Securities owned by it.
(d) Use its best efforts to register and qualify the
Registered Securities under such other securities or Blue Sky laws
of such jurisdictions as shall be reasonably requested by the
Warrantholder, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the manager
underwriter of such offering. The Warrantholder participating in
such underwriting shall also enter into and perform its obligations
under such agreement.
(f) Notify the Warrantholder in the event the Company has
delivered preliminary or final prospectuses to the Warrantholder
and, after having done so, such prospectus is amended to comply
with the requirements of the Securities Act. Upon such
notification, the Warrantholder shall immediately cease making
offers of Registered Securities and return all prospectuses to the
Company. The Company shall promptly provide the Warrantholders
with revised prospectuses and, following receipt of the revised
prospectuses, the Warrantholder shall be free to resume making
offers of the Registered Securities.
(g) Furnish, at the request of the Warrantholder on the
date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant
to this Warrant, if such securities are being sold through
underwriters, on the date that the Registration Statement with
respect to such securities become effective, (i) an opinion, dated
such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed to
the underwriters, if any, and to the Warrantholder and (ii) the
letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily
given by certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if
any, and to the Warrantholder.
SECTION 4.03. FURNISH INFORMATION. It shall be a
condition precedent to the obligations of the Company to take any
action pursuant to this Warrant with respect to the Registrable
Securities of the Warrantholder that shall furnish to the Company
such information regarding itself, the Registrable Securities held
by it, and the intended method of disposition of such securities as
shall be required to effect the registration.
SECTION 4.04. EXPENSES OF DEMAND REGISTRATION. All
expenses (including underwriting discounts and commissions)
incurred in connection with registrations, filings or
qualifications pursuant to Subsection 6.01, including (without
limitation) all registration, filing and qualification fees,
printing and accounting fees, fees and disbursements of counsel for
the Company, and the reasonable fees and disbursements of counsel
for the Warrantholder shall be borne by the Warrantholder.
SECTION 4.05. PIGGYBACK REGISTRATION RIGHTS.
(a) If at any time prior to the Expiration Date, the
Company proposes to register any of its stock or other securities
under the Securities Act in connection with the public offering of
such securities solely for cash (other than a registration relating
solely to (i) the sale of securities to participants in a Company
stock option plan, stock purchase plan, savings or similar plan, or
(ii) the sale of securities as part of an acquisition, merger or
exchange of stock or a registration on any form which does not
include substantially the same information as would be included in
a Registration Statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give the
holder of Registrable Securities written notice of such
registration. Upon the written request of the Holder given within
twenty (20) days after mailing of such notice by the Company in
accordance with Section 7.08, the Company shall use its best
efforts, subject to the provisions of Section 4.03, to cause to be
registered under the Securities Act all of the Registrable
Securities that each Holder has requested to be registered;
provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this Section 4.01(a)
without obligation to any holder.
(b) The Company is obligated to effect only two (2) such
registrations of Registrable Securities under this Section 4.05.
SECTION 4.06. EXPENSES OF PIGGYBACK REGISTRATION. The
holder of Registrable Securities shall bear an equitable portion of
all expenses incurred in connection with any registration, filing
or qualification of Registrable Securities with respect to all
registrations pursuant to Section 4.05 including, without
limitation, all registration, filing, and qualification fees,
printing and accounting fees relating or apportionable thereto,
disbursements of counsel and underwriting discounts and commissions
relating to the Registrable Securities.
SECTION 4.07. UNDERWRITING REQUIREMENTS. In connection
with any offering involving an underwriting of shares of the
Company's capital stock, the Company shall not be required under
Section 4.05 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as
agreed upon between the Company and the underwriters selected by
the Company, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success
of the offering by the Company.
SECTION 4.08. DELAY OF REGISTRATION. No Holder shall
have any right to obtain or seek an injunction restraining or
otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Warrant.
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDER
SECTION 5.01. NO RIGHTS AS SHAREHOLDER; NOTICE TO
WARRANTHOLDER. Nothing contained in this Warrant shall be
construed as conferring upon the Warrantholder or his, her or its
transferee the right to vote or to receive dividends or to consent
or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any
other matter, or any rights whatsoever as a shareholder of the
Company.
SECTION 5.02. WARRANTHOLDER RIGHTS IN OFFERING. The
Warrantholder shall have the right to participate in any rights
offering which may be undertaken by the Company prior to the
Expiration Date, on a pro rata basis with the holders of the
Company's Common Stock (including oversubscription rights), as if
the Warrantholder had exercised this Warrant prior to any such
offering. For the purposes of this Section 5.02, each share into
which this Warrant may be converted shall be deemed to be an
outstanding share of the Company's Class B Common Stock.
SECTION 5.03. LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS.
If this Warrant is lost, stolen, mutilated or destroyed, the
Company may, on such terms as to indemnity or otherwise as it may
in its discretion impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of
like denomination and tenor as, and in substitution for, this
Warrant.
ARTICLE VI
SPLIT-UP, COMBINATION
EXCHANGE AND TRANSFER OF WARRANTS
SECTION 6.01. SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF
WARRANTS. Subject to the provisions of Section 6.02 hereof, this
Warrant may be split up, combined or exchanged for another warrant
or warrants containing the same terms to purchase a like aggregate
number of Warrant Shares. If the Warrantholder desires to split
up, combine or exchange this Warrant, he, she or it shall make such
request in writing delivered to the Company and shall surrender to
the Company this Warrant and any other Warrants to be so split up,
combined or exchanged. Upon any such surrender for split up,
combination or exchange, the Company shall execute and deliver to
the person entitled thereto a Warrant or Warrants, as the case may
be, as so requested. The Company shall not be required to effect
any split up, combination or exchange which will result in the
issuance of a Warrant entitling the Warrantholder to purchase upon
exercise a fraction of a share of Class B Common Stock or a
fractional Warrant. The Company may require such Warrantholder to
pay a sum sufficient to cover any expenses of the Company
(including fees of counsel to the Company), and any tax or
governmental charge that may be imposed, in connection with any
split up, combination or exchange of Warrants.
SECTION 6.02. RESTRICTIONS ON TRANSFER. Neither this Warrant
nor the Warrant Shares may be disposed of or encumbered (any such
action, a "Transfer") other than to an affiliate of the
Warrantholder, except with the written consent of the Company which
consent shall not be unreasonably withheld and except, in all
cases, including a Transfer to an affiliate, in accordance with and
subject to the provisions of the Securities Act and the rules and
regulations promulgated thereunder. If at the time of a Transfer,
a registration statement is not in effect to register this Warrant
or the Warrant Shares, the Company may require the Warrantholder to
make such representations, and may place such legends on
certificates representing this Warrant, as may be reasonably
required in the opinion of counsel to the Company to permit a
Transfer without such registration. The Company may require any
Warrantholder requesting a transfer to pay a sum sufficient to
cover the expenses of the Company (including fees of counsel to the
Company), and any tax or governmental charge that may be imposed.
ARTICLE VII
OTHER MATTERS
SECTION 7.01. SUCCESSORS AND ASSIGNS. All the covenants and
provisions of this Warrant by or for the benefit of the Company
shall bind and inure to the benefit of its successors and assigns
hereunder.
SECTION 7.02. NO INCONSISTENT AGREEMENTS. The Company will
not on or after the date of this Warrant enter into any agreement
with respect to its securities which is inconsistent with the
rights granted to the Warrantholder in this Warrant or otherwise
conflicts with the provisions hereof. The rights granted to the
Warrantholder hereunder do not in any way conflict with and are not
inconsistent with the rights granted to holders of the Company's
securities under any other agreements.
SECTION 7.03. INTEGRATION/ENTIRE AGREEMENT. This Warrant is
intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions,
promises, warranties or undertaking, other than those set forth or
referred to herein with respect to the registration rights granted
by the Company with respect to the Warrants. This Warrant
supersedes all prior agreements, and understandings between the
parties with respect to such subject matter.
SECTION 7.04. AMENDMENTS AND WAIVERS. The provisions of this
Warrant, including the provisions of this sentence, may not be
amended, modified or supplemented, and waiver of or consents to
departure from the provisions hereof may not be given unless the
Company has obtained the written consent of the Warrantholders
whose Warrants entitle them to purchase a majority of the
outstanding Warrant Shares.
SECTION 7.05. COUNTERPARTS. This Warrant may be executed in
any number of counterparts, and by the parties hereto in separate
counterparts, each of which so executed shall be deemed to be an
original and all of which taken together shall constitute one and
the same agreement.
SECTION 7.06. GOVERNING LAW. This Warrant shall be governed
by and construed in accordance with the laws of the State of Ohio.
SECTION 7.07. SEVERABILITY. In the event that any one or
more of the provisions contained herein, or the application thereof
in any circumstances, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provisions in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
SECTION 7.08. NOTICE. Any notices or certificates by the
Company to the Warrantholder and by the Warrantholder to the
Company shall be deemed delivered if in writing and delivered in
person or by registered mail (return receipt requested) to the
Warrantholder addressed to it at 13515 Yarmouth Drive, N.W.
Pickerington, OH 43147, or, if the Warrantholder has designated, by
notice in writing to the Company, any other address, to such other
address; and if to the Company, addressed to it at: Resource
America, Inc., 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, or, if the Company has designated, by notice in
writing to the Warrantholder, any other address, to such other
address.
The Company may change its address by written notice to the
Warrantholder and the Warrantholder may change its address by
written notice to the Company.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the 26th day of December,
1995.
Attest: RESOURCE AMERICA, INC.
By: /S/ Scott F. Schaeffer By: /s/ Michael L. Staines
---------------------- ----------------------
Scott F. Schaeffer, Michael L. Staines,
Assistant Secretary Senior Vice President
[CORPORATE SEAL]
<PAGE>
EXHIBIT 10.30
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
VOID AFTER 5:00 P.M. PHILADELPHIA TIME ON DECEMBER 27, 2005 OR IF
NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., PHILADELPHIA
TIME, ON THE NEXT FOLLOWING BUSINESS DAY.
WARRANT TO PURCHASE
29,535
SHARES OF CLASS B COMMON STOCK
OF
RESOURCE AMERICA, INC.
This Certifies that, for good and valuable consideration,
Physicians Insurance Company of Ohio, and its registered, permitted
assigns (collectively, the "Warrantholder"), is entitled to
purchase from Resource America, Inc., a corporation incorporated
under the laws of the State of Delaware (the "Company"), subject to
the terms and conditions hereof, at any time or after 9:00 A.M.,
Philadelphia time, on December 27, 1995, and before 5:00 P.M.,
Philadelphia time, on December 27, 2005 (or, if such day is not a
Business Day, at or before 5:00 P.M., Philadelphia time, on the
next following Business Day), the number of fully paid and non-
assessable shares of Class B Common Stock of the Company stated
above at the Exercise Price (as defined herein). The Exercise
Price and the number of shares purchasable hereunder are subject to
adjustment from time to time as provided in Article III hereof.
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITION OF TERMS. As used in this Warrant,
the following capitalized terms shall have the following respective
meanings:
(a) BUSINESS DAY: A day other than a Saturday, Sunday or
other day on which banks in the Commonwealth of Pennsylvania are
authorized by law to remain closed.
(b) CLASS B COMMON STOCK: Class B Common Stock, $.01 par
value per share, of the Company.
(c) CLASS B COMMON STOCK EQUIVALENTS: Securities that are
convertible into or exercisable for shares of Class B Common Stock.
(d) COMMON STOCK: All Common Stock, $.01 par value per
share, of the Company, regardless of the class.
(e) COMMON STOCK EQUIVALENTS: Securities that are
convertible into or exercisable for shares of Common Stock.
(f) EXCHANGE ACT: The Securities Exchange Act of 1934, as
amended.
(g) EXERCISE PRICE: $11.75 per Warrant Share, as such price
may be adjusted from time to time pursuant to Article III hereof.
(h) EXPIRATION DATE: 5:00 P.M., Philadelphia time, on
December 27, 2005 or if such day is not a Business Day, the next
succeeding day which is a Business Day.
(i) HOLDER: Any person owning or having a right to acquire
Warrant Shares or any assignee thereof.
(j) NASD: National Association of Securities Dealers, Inc.
and NASDAQ: NASD Automatic Quotation System.
(k) PERSON: An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or
any department or agency thereof.
(l) PIGGYBACK REGISTRATION: See Article IV.
(m) REGISTERED SECURITIES: Any Registrable Securities
which have been included in an effective Registration Statement
pursuant to the terms of Article IV hereof.
(n) REGISTRABLE SECURITIES: Any Warrant Shares issued to
Physicians Insurance Company of Ohio and/or its designees or
transferees as permitted under Section 6.02 and/or other securities
that may be or are issued by the Company upon exercise of this
Warrant, including those which may thereafter be issued by the
Company in respect of any such securities by means of any stock
splits, stock dividends, recapitalizations, reclassifications or
the like, and as adjusted pursuant to Article III hereof; provided,
however, that as to any particular security contained in
Registrable Securities, such securities shall cease to be
Registrable Securities when (i) a Registration Statement with
respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been
disposed of in accordance with such Registration Statement; or (ii)
they shall have been sold to the public pursuant to Rule 144 (or
any successor provision) under the Securities Act; or (iii) they
shall have been sold, assigned or otherwise transferred except as
permitted by Section 6.02 below.
(o) REGISTRATION STATEMENT: Any registration statement of
the Company filed or to be filed with the Securities and Exchange
Commission which covers any of the Registrable Securities pursuant
to the provisions of this Warrant, including all amendments
(including post-effective amendments) and supplements thereto, all
exhibits thereto and all material incorporated therein by
reference.
(p) SECURITIES ACT: The Securities Act of 1933, as amended.
(q) TRANSFER: See Section 6.02.
(r) WARRANT: This Warrant and all other warrants that may
be issued in its or their place, together evidencing the right to
purchase an aggregate of 29,535 shares of Class B Common Stock as
the same may be adjusted pursuant to this Warrant.
(s) WARRANTHOLDER: The person(s) or entity(ies) to whom
this Warrant is originally issued, or any successor in interest
thereto, or any assignee or transferee thereof, in whose name this
Warrant is registered upon the books to be maintained by the
Company for that purpose.
(t) WARRANT SHARES: Class B Common Stock, Class B Common
Stock Equivalents and other securities purchased or purchasable
upon exercise of the Warrant.
ARTICLE II
DURATION AND EXERCISE OF WARRANT
SECTION 2.01. DURATION OF WARRANT. The Warrantholder may
exercise this Warrant at any time and from time to time after 9:00
A.M., Philadelphia time, on December 27, 1995, and before 5:00
P.M., Philadelphia time, on the Expiration Date. If this Warrant
is not exercised on the Expiration Date, it shall become void, and
all rights hereunder shall thereupon cease.
SECTION 2.02. EXERCISE OF WARRANT.
(a) The Warrantholder may exercise this Warrant, in whole or
in part, by presentation and surrender of this Warrant to the
Company at its principal corporate office or at the office of its
stock transfer agent, if any, with the Subscription Form annexed
hereto duly executed and accompanied by payment of the full
Exercise Price for each Warrant Share to be purchased.
(b) Upon receipt of this Warrant with the Subscription Form
fully executed and accompanied by payment of the aggregate Exercise
Price for the Warrant Shares for which this Warrant is then being
exercised, the Company shall cause to be issued certificates for
the total number of whole shares of Class B Common Stock for which
this Warrant is being exercised (adjusted to reflect the effect of
the anti-dilution provisions contained in Article III hereof, if
any, and as provided in Section 2.04 hereof) in such denominations
as are requested for delivery to the Warrantholder, and the Company
shall thereupon deliver such certificates to the Warrantholder.
The Warrantholder shall be deemed to be the holder of record of the
shares of Class B Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such shares of
Class B Common Stock shall not then be actually delivered to the
Warrantholder. At the time this Warrant is exercised, the Company
may require the Warrantholder to make such representations, and may
place such legends on certificates representing the Warrant Shares,
as may be reasonably required in the opinion of counsel to the
Company to permit the Warrant Shares to be issued in compliance
with the Securities Act.
(c) In case the Warrantholder shall exercise this Warrant
with respect to less than all of the Warrant Shares that may be
purchased under this Warrant, the Company shall execute a new
warrant in the form of this Warrant for the balance of such Warrant
Shares and deliver such new warrant to the Warrantholder.
(d) The Company shall pay any and all stock transfer and
similar taxes which may be payable in respect of the issue of any
Warrant Shares to the holder of the Warrant being exercised.
SECTION 2.03. RESERVATION OF SHARES. The Company hereby
agrees that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant such number of shares of
Class B Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant.
All such shares shall be validly issued, fully paid and
nonassessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and
clear of all preemptive rights.
SECTION 2.04. FRACTIONAL SHARES. The Company shall not be
required to issue any fraction of a share of its capital stock in
connection with the exercise of this Warrant, and in any case where
the Warrantholder would, except for the provisions of this Section
2.04, be entitled under the terms of this Warrant to receive a
fraction of a share upon the exercise of this Warrant, the Company
shall, upon the exercise of this Warrant and receipt of the
Exercise Price, issue the largest number of whole shares
purchasable upon exercise of this Warrant. The Company shall not
be required to make any cash or other adjustment in receipt of such
fraction of a share to which the Warrantholder would otherwise be
entitled.
ARTICLE III
ADJUSTMENT OF SHARES OF CLASS B COMMON STOCK
PURCHASABLE AND OF EXERCISE PRICE
The Exercise Price and the number and kind of Warrant Shares
shall be subject to adjustment from time to time upon the happening
of certain events as provided in this Article III.
SECTION 3.01. MECHANICAL ADJUSTMENTS.
(a) If at any time prior to the exercise of this Warrant in
full, the Company shall (i) declare a dividend or make a
distribution on the Common Stock payable in shares of its capital
stock (whether shares of Common Stock or of capital stock of any
other class); (ii) subdivide, reclassify or recapitalize its
outstanding Common Stock into a greater number of shares; (iii)
combine, reclassify or recapitalize its outstanding Common Stock
into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of its Common Stock (including
any such reclassification in connection with a consolidation or a
merger in which the Company is the continuing corporation), the
Exercise Price in effect at the time of the record date of such
dividend, distribution, subdivision, combination, reclassification
or recapitalization shall be adjusted so that the Warrantholder
shall be entitled to receive the aggregate number and kind of
shares which, if this Warrant had been exercised in full
immediately prior to such event, it or he would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination, reclassification
or recapitalization. Any adjustment required by this Paragraph
3.01(a) shall be made immediately after the record date, in the
case of a dividend or distribution, or the effective date, in the
case of a subdivision, combination, reclassification or
recapitalization, to allow the purchase of such aggregate number
and kind of shares.
(b) If at any time prior to the exercise of this Warrant in
full, the Company shall (i) issue or sell any Common Stock or
Common Stock Equivalents without consideration or for consideration
per share less than the Exercise Price in effect immediately prior
to the date of such issuance or sale (other than issuances of
securities upon the exercise of options granted under the Company's
currently existing stock option plans or upon the exercise of other
currently outstanding options) or (ii) fix a record date for the
issuance of subscription rights, options or warrants to all holders
of Common Stock entitling them to subscribe for or purchase Common
Stock (or Common Stock Equivalents) at a price (or having an
exercise or conversion price per share) less than the Exercise
Price in effect immediately prior to the record date described
below, the Exercise Price shall be adjusted so that the Exercise
Price shall equal the price determined by multiplying the Exercise
Price in effect immediately prior to the date of such sale or
issuance (which date in the event of distribution to shareholders
shall be deemed to be the record date set by the Company to
determine shareholders entitled to participate in such
distribution) by a fraction, the numerator of which shall be (i)
the number of shares of Common Stock outstanding on the date of
such sale or issuance, plus (ii) the number of additional shares of
Common Stock which the aggregate consideration received by the
Company upon such issuance or sale (plus the aggregate of any
additional amount to be received by the Company upon the exercise
of such subscription rights, options or warrants) would purchase at
such current Exercise Price per share of the Common Stock; and the
denominator of which shall be (i) the number of shares of Common
Stock outstanding on the date of such issuance or sale, plus (ii)
the number of additional shares of Common Stock offered for the
subscription or purchase (or into which the Common Stock
Equivalents so offered are exercisable or convertible). Any
adjustments required by this paragraph 3.01(b) shall be made
immediately after such issuance or sale or record date, as the case
may be. Such adjustments shall be made successively whenever such
event shall occur. To the extent that shares of Common Stock (or
Common Stock Equivalents) are not delivered after the expiration of
such subscription rights, options or warrants, the Exercise Price
shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights,
options or warrants been made upon the basis of delivery of only
the number of shares of Common Stock (or Common Stock Equivalents)
actually delivered.
(c) If at any time prior to the exercise of this Warrant in
full, the Company shall fix a record date for the issuance or
distribution to all holders of the Common Stock (including any such
distribution to be made in connection with a consolidation or
merger in which the Company is to be the continuing corporation) of
evidences of its indebtedness, any other securities of the Company
or any cash, property or other assets (excluding a combination,
reclassification or recapitalization referred to in Section
3.01(a), regular cash dividends or cash distributions paid out of
net profits legally available therefor and in the ordinary course
of business or subscription rights, options or warrants for Common
Stock or Common Stock Equivalents (excluding those referred to in
Section 3.01(b) (any such non-excluded event being herein called a
"Special Dividend")), (i) the Exercise Price shall be decreased
immediately after the record date for such Special Dividend to a
price determined by multiplying the Exercise Price then in effect
by a fraction, the numerator of which shall be the Exercise Price
in effect on such record date less the fair market value (as
determined by the Company's Board of Directors) of the evidences of
indebtedness, securities or property, or other assets issued or
distributed in such Special Dividend applicable to one share of
Common Stock or of such subscription rights or warrants applicable
to one share of Common Stock and the denominator of which shall be
such Exercise Price then in effect and (ii) the number of shares of
Common Stock subject to purchase upon exercise of this Warrant
shall be increased to a number determined by multiplying the number
of shares of Class B Common Stock subject to purchase immediately
before such Special Dividend by a fraction, the numerator of which
shall be the Exercise Price in effect immediately before such
Special Dividend and the denominator of which shall be the Exercise
Price in effect immediately after such Special Dividend. Any
adjustment required by this Section 3.01(c) shall be made
successively whenever such a record date is fixed and in the event
that such distribution is not so made, the Exercise Price shall
again be adjusted to be that in effect immediately prior to such
record date.
(d) If at any time prior to the exercise of this Warrant in
full, the Company shall make a distribution to all holders of the
Common Stock or stock of a subsidiary or securities convertible
into or exercisable for such stock, then in lieu of an adjustment
in the Exercise Price or the number of Warrant Shares purchasable
upon the exercise of this Warrant, each Warrantholder, upon the
exercise hereof at any time after such distribution, shall be
entitled to receive from the Company, such subsidiary or both, as
the Company shall determine, the stock or other securities to which
such Warrantholder would have been entitled if such Warrantholder
had exercised this Warrant immediately prior thereto, all subject
to further adjustment as provided in this Article III, and the
Company shall reserve, for the life of the Warrant, such securities
of such subsidiary or other corporation; provided, however, that no
adjustment in respect of dividends or interest on such stock or
other securities shall be made during the term of this Warrant or
upon its exercise.
(e) (i) If at any time prior to the exercise of this
Warrant in full, the Company shall issue securities upon the
exercise of options, warrants or other Common Stock Equivalents
granted under any stock option plan of the Company (except with
respect to up to 2,000 shares of Common Stock issuable in
connection with the Company's existing stock option plan) created
after the date of the issuance of this Warrant, then, in addition
to the adjustment in Exercise Price required by Section 3.01(b)
hereof, if any, the aggregate number of shares of Common Stock
issuable hereunder shall be increased to that number of shares
which is in the same ratio to the number of shares issuable prior
to the exercise giving rise to the need for adjustment hereunder as
the number of shares of Common Stock outstanding immediately prior
to the exercise giving rise to the need for adjustment hereunder is
to the number of shares of Common Stock outstanding immediately
after such exercise.
(ii) Except in the case of a transaction requiring an
adjustment pursuant to Section 3.01(e)(i) above, whenever the
Exercise Price payable upon exercise of this Warrant is adjusted
pursuant to paragraph (a), (b) or (c) of this Section 3.01, the
Warrant Shares shall simultaneously be adjusted by multiplying the
number of Warrant Shares initially issuable upon exercise of each
Warrant by the Exercise Price in effect on the date thereof and
dividing the product so obtained by the Exercise Price, as
adjusted.
(f) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least five cents ($.05) in such price; provided, however, that any
adjustments which by reason of this paragraph (f) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 3.01
shall be made to the nearest cent or the nearest one-hundredth of
a share, as the case may be. Notwithstanding anything in this
Section 3.01 to the contrary, the Exercise Price shall not be
reduced to less than the then existing par value of the Common
Stock as a result of any adjustment made hereunder.
(g) In the event that at any time, as a result of any
adjustment made pursuant to Section 3.01(a), the Warrantholder
shall become entitled to receive any shares of capital stock of the
Company other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Warrant shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Section 3.01(a) or this Section
3.01(g).
(h) In the case of an issue of additional Common Stock or
Common Stock Equivalents for cash, the consideration received by
the Company therefor before deducting therefrom any discount or
commission or other expenses paid by the Company for any
underwriting of, or otherwise in connection with, the issuance
thereof, shall be deemed to be the amount received by the Company
therefor. The term "issue" shall include the sale or other
disposition of shares held by or on account of the Company or in
the treasury of the Company but until so sold or otherwise disposed
of such shares shall not be deemed outstanding.
SECTION 3.02. NOTICES OF ADJUSTMENT. Whenever the number of
Warrant Shares or the Exercise Price is adjusted as herein
provided, the Company shall prepare and deliver forthwith to the
Warrantholder a certificate signed by an officer of the Company
setting forth the adjusted number of shares purchasable upon the
exercise of this Warrant and the Exercise Price of such shares
after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by
which adjustment was made.
SECTION 3.03. NO ADJUSTMENT FOR DIVIDENDS. Except as provided
in Section 3.01 of this Warrant, no adjustment in respect of any
cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
SECTION 3.04. PRESERVATION OF PURCHASE RIGHTS IN CERTAIN
TRANSACTIONS. In case of any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common
Stock) or in case of any consolidation or merger of the Company
with or into another corporation (other than merger with a
subsidiary in which the Company is the continuing corporation and
that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common
Stock of the class issuable upon exercise of this Warrant) or in
the case of any sale, lease, transfer or conveyance to another
corporation of the property and assets of the Company as an
entirety or substantially as an entirety, the Company shall, as a
condition precedent to such transaction cause such successor or
purchasing corporation, as the case may be, to execute with the
Warrantholder an agreement granting the Warrantholder the right
thereafter, upon payment of the Exercise Price in effect
immediately prior to such action, to receive upon exercise of this
Warrant the kind and amount of shares and other securities and
property which he would have owned or have been entitled to receive
after the happening of such reclassification, change,
consolidation, merger, sale or conveyance had this Warrant been
exercised immediately prior to such action. Such agreement shall
provide for adjustments in respect of such shares of stock and
other securities and property, which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this
Article III. In the event that in connection with any such
reclassification, capital reorganization, change, consolidation,
merger, sale or conveyance, additional shares of Common Stock shall
be issued in exchange, conversion, substitution of payment, in
whole or in part, for, or of, a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common
Stock covered by the provisions of Article III. The provisions of
this Section 3.04 shall similarly apply to successive
reclassifications, capital reorganizations, consolidations,
mergers, sales or conveyances.
SECTION 3.05. FORM OF WARRANT AFTER ADJUSTMENTS. The form of
this Warrant need not be changed because of any adjustments in the
Exercise Price or the number or kind of the Warrant Shares, and
Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in this
Warrant, as initially issued.
ARTICLE IV
REGISTRATION UNDER THE SECURITIES ACT
SECTION 4.01. DEMAND REGISTRATION RIGHTS.
(a) If the Company shall receive, at any time after the date
hereof and while the Company is a reporting company as defined in
the Exchange Act, a written request (the "REQUEST") from the
Warrantholder that the Company file a Registration Statement under
the Securities Act covering the registration of the shares of
Registrable Securities that are the subject of the Request (a
"DEMAND REGISTRATION"), then the Company shall, subject to the
limitations of Section 4.02, use its best efforts to effect as soon
as practicable the registration under the Securities Act in
accordance with Subsection 4.02(a) hereof, of all Registrable
Securities which the Warrantholder requests be registered within
ninety (90) days of the Company's receipt of the Request.
(b) If the Warrantholder intends to distribute the
Registerable Securities covered by the Request by means of an
underwriting, the Warrantholder shall so advise the Company as a
part of the Request. In such event, the Warrantholder shall
(together with the Company as provided in Section 4.02(e)) enter
into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting which
underwriters shall include a regional or national underwriting firm
which is a member in good standing of the National Association of
Securities Dealers, Inc.
(c) Notwithstanding the foregoing, if the Company shall
furnish to the Warrantholders a certificate, signed in good faith
by the President of the Company, stating that the good faith
judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such
registration statement to be filed and it therefore essential to
defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period ending on the one
hundred eightieth day after the Company's receipt of the Request.
SECTION 4.02. OBLIGATIONS OF THE COMPANY. Whenever required
under this Warrant to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a Registration Statement
with respect to such Registrable Securities and use its best
efforts to cause such Registration Statement to become effective,
and, upon the request of the Warrantholder keep such Registration
Statement effective for up to one hundred twenty (120) days.
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used
in connection with such Registration Statement as may be necessary
to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration
Statement.
(c) Furnish to Warrantholder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition
of Registered Securities owned by it.
(d) Use its best efforts to register and qualify the
Registered Securities under such other securities or Blue Sky laws
of such jurisdictions as shall be reasonably requested by the
Warrantholder, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any
such states or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement,
in usual and customary form, with the manager underwriter of such
offering. The Warrantholder participating in such underwriting
shall also enter into and perform its obligations under such
agreement.
(f) Notify the Warrantholder in the event the Company has
delivered preliminary or final prospectuses to the Warrantholder
and, after having done so, such prospectus is amended to comply
with the requirements of the Securities Act. Upon such
notification, the Warrantholder shall immediately cease making
offers of Registered Securities and return all prospectuses to the
Company. The Company shall promptly provide the Warrantholders
with revised prospectuses and, following receipt of the revised
prospectuses, the Warrantholder shall be free to resume making
offers of the Registered Securities.
(g) Furnish, at the request of the Warrantholder on the date
that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to this
Warrant, if such securities are being sold through underwriters, on
the date that the Registration Statement with respect to such
securities become effective, (i) an opinion, dated such date, of
the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Warrantholder and (ii) the letter
dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by
certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the
Warrantholder.
SECTION 4.03. FURNISH INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action
pursuant to this Warrant with respect to the Registrable Securities
of the Warrantholder that shall furnish to the Company such
information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as
shall be required to effect the registration.
SECTION 4.04. EXPENSES OF DEMAND REGISTRATION. All expenses
(including underwriting discounts and commissions) incurred in
connection with registrations, filings or qualifications pursuant
to Subsection 6.01, including (without limitation) all
registration, filing and qualification fees, printing and
accounting fees, fees and disbursements of counsel for the Company,
and the reasonable fees and disbursements of counsel for the
Warrantholder shall be borne by the Warrantholder.
SECTION 4.05. PIGGYBACK REGISTRATION RIGHTS.
(a) If at any time prior to the Expiration Date, the Company
proposes to register any of its stock or other securities under the
Securities Act in connection with the public offering of such
securities solely for cash (other than a registration relating
solely to (i) the sale of securities to participants in a Company
stock option plan, stock purchase plan, savings or similar plan, or
(ii) the sale of securities as part of an acquisition, merger or
exchange of stock or a registration on any form which does not
include substantially the same information as would be included in
a Registration Statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give the
holder of Registrable Securities written notice of such
registration. Upon the written request of the Holder given within
twenty (20) days after mailing of such notice by the Company in
accordance with Section 7.08, the Company shall use its best
efforts, subject to the provisions of Section 4.03, to cause to be
registered under the Securities Act all of the Registrable
Securities that each Holder has requested to be registered;
provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this Section 4.01(a)
without obligation to any holder.
(b) The Company is obligated to effect only two (2) such
registrations of Registrable Securities under this Section 4.05.
SECTION 4.06. EXPENSES OF PIGGYBACK REGISTRATION. The
holder of Registrable Securities shall bear an equitable portion of
all expenses incurred in connection with any registration, filing
or qualification of Registrable Securities with respect to all
registrations pursuant to Section 4.05 including, without
limitation, all registration, filing, and qualification fees,
printing and accounting fees relating or apportionable thereto,
disbursements of counsel and underwriting discounts and commissions
relating to the Registrable Securities.
SECTION 4.07. UNDERWRITING REQUIREMENTS. In connection
with any offering involving an underwriting of shares of the
Company's capital stock, the Company shall not be required under
Section 4.05 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as
agreed upon between the Company and the underwriters selected by
the Company, and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success
of the offering by the Company.
SECTION 4.08. DELAY OF REGISTRATION. No Holder shall have
any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or
implementation of this Warrant.
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDER
SECTION 5.01. NO RIGHTS AS SHAREHOLDER; NOTICE TO
WARRANTHOLDER. Nothing contained in this Warrant shall be
construed as conferring upon the Warrantholder or his, her or its
transferee the right to vote or to receive dividends or to consent
or to receive notice as a shareholder in respect of any meeting of
shareholders for the election of directors of the Company or of any
other matter, or any rights whatsoever as a shareholder of the
Company.
SECTION 5.02. WARRANTHOLDER RIGHTS IN OFFERING. The
Warrantholder shall have the right to participate in any rights
offering which may be undertaken by the Company prior to the
Expiration Date, on a pro rata basis with the holders of the
Company's Common Stock (including oversubscription rights), as if
the Warrantholder had exercised this Warrant prior to any such
offering. For the purposes of this Section 5.02, each share into
which this Warrant may be converted shall be deemed to be an
outstanding share of the Company's Class B Common Stock.
SECTION 5.03. LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS.
If this Warrant is lost, stolen, mutilated or destroyed, the
Company may, on such terms as to indemnity or otherwise as it may
in its discretion impose (which shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of
like denomination and tenor as, and in substitution for, this
Warrant.
ARTICLE VI
SPLIT-UP, COMBINATION
EXCHANGE AND TRANSFER OF WARRANTS
SECTION 6.01. SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF
WARRANTS. Subject to the provisions of Section 6.02 hereof, this
Warrant may be split up, combined or exchanged for another warrant
or warrants containing the same terms to purchase a like aggregate
number of Warrant Shares. If the Warrantholder desires to split
up, combine or exchange this Warrant, he, she or it shall make such
request in writing delivered to the Company and shall surrender to
the Company this Warrant and any other Warrants to be so split up,
combined or exchanged. Upon any such surrender for split up,
combination or exchange, the Company shall execute and deliver to
the person entitled thereto a Warrant or Warrants, as the case may
be, as so requested. The Company shall not be required to effect
any split up, combination or exchange which will result in the
issuance of a Warrant entitling the Warrantholder to purchase upon
exercise a fraction of a share of Class B Common Stock or a
fractional Warrant. The Company may require such Warrantholder to
pay a sum sufficient to cover any expenses of the Company
(including fees of counsel to the Company), and any tax or
governmental charge that may be imposed, in connection with any
split up, combination or exchange of Warrants.
SECTION 6.02. RESTRICTIONS ON TRANSFER. Neither this Warrant
nor the Warrant Shares may be disposed of or encumbered (any such
action, a "Transfer") other than to an affiliate of the
Warrantholder, except with the written consent of the Company which
consent shall not be unreasonably withheld and except, in all
cases, including a Transfer to an affiliate, in accordance with and
subject to the provisions of the Securities Act and the rules and
regulations promulgated thereunder. If at the time of a Transfer,
a registration statement is not in effect to register this Warrant
or the Warrant Shares, the Company may require the Warrantholder to
make such representations, and may place such legends on
certificates representing this Warrant, as may be reasonably
required in the opinion of counsel to the Company to permit a
Transfer without such registration. The Company may require any
Warrantholder requesting a transfer to pay a sum sufficient to
cover the expenses of the Company (including fees of counsel to the
Company), and any tax or governmental charge that may be imposed.
ARTICLE VII
OTHER MATTERS
SECTION 7.01. SUCCESSORS AND ASSIGNS. All the covenants and
provisions of this Warrant by or for the benefit of the Company
shall bind and inure to the benefit of its successors and assigns
hereunder.
SECTION 7.02. NO INCONSISTENT AGREEMENTS. The Company will
not on or after the date of this Warrant enter into any agreement
with respect to its securities which is inconsistent with the
rights granted to the Warrantholder in this Warrant or otherwise
conflicts with the provisions hereof. The rights granted to the
Warrantholder hereunder do not in any way conflict with and are not
inconsistent with the rights granted to holders of the Company's
securities under any other agreements.
SECTION 7.03. INTEGRATION/ENTIRE AGREEMENT. This Warrant is
intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions,
promises, warranties or undertaking, other than those set forth or
referred to herein with respect to the registration rights granted
by the Company with respect to the Warrants. This Warrant
supersedes all prior agreements, and understandings between the
parties with respect to such subject matter.
SECTION 7.04. AMENDMENTS AND WAIVERS. The provisions of this
Warrant, including the provisions of this sentence, may not be
amended, modified or supplemented, and waiver of or consents to
departure from the provisions hereof may not be given unless the
Company has obtained the written consent of the Warrantholders
whose Warrants entitle them to purchase a majority of the
outstanding Warrant Shares.
SECTION 7.05. COUNTERPARTS. This Warrant may be executed in
any number of counterparts, and by the parties hereto in separate
counterparts, each of which so executed shall be deemed to be an
original and all of which taken together shall constitute one and
the same agreement.
SECTION 7.06. GOVERNING LAW. This Warrant shall be governed
by and construed in accordance with the laws of the State of Ohio.
SECTION 7.07. SEVERABILITY. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstances, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provisions in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
SECTION 7.08. NOTICE. Any notices or certificates by the
Company to the Warrantholder and by the Warrantholder to the
Company shall be deemed delivered if in writing and delivered in
person or by registered mail (return receipt requested) to the
Warrantholder addressed to it at 13515 Yarmouth Drive, N.W.
Pickerington, OH 43147, or, if the Warrantholder has designated, by
notice in writing to the Company, any other address, to such other
address; and if to the Company, addressed to it at: Resource
America, Inc., 1521 Locust Street, Suite 400, Philadelphia,
Pennsylvania 19102, or, if the Company has designated, by notice in
writing to the Warrantholder, any other address, to such other
address.
The Company may change its address by written notice to the
Warrantholder and the Warrantholder may change its address by
written notice to the Company.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
Company under its corporate seal as of the 27th day of December,
1995.
Attest: RESOURCE AMERICA, INC.
By: /S/ Scott F. Schaeffer By: /s/ Michael L. Staines
------------------------ ---------------------------
Scott F. Schaeffer, Michael L. Staines,
Assistant Secretary Senior Vice President
[CORPORATE SEAL]
<PAGE>
EXHIBIT 11.1
CALCULATION OF PRIMARY AND FULLY
DILUTED EARNINGS PER SHARE
<TABLE>
<CAPTION>
PRIMARY EARNINGS PER SHARE
Computation for Statement of Operations
- ---------------------------------------
December 31,
Reconciliation of net income per statement of operations to amount used in primary 1995 1994
earnings per share computation: ---------- ---------
<S> <C> <C>
Net income $1,598,062 $ 200,243
Add-Interest on short-term debt, net of tax effect, on application of assumed
proceeds from exercise of options and warrants in excess of 20% limitation 7,835 -
---------- ---------
Net income, as adjusted $1,605,897 $ 200,243
Additional Primary Computation
- ------------------------------
Net income, as adjusted per primary computation above $1,605,897 $ 200,243
Additional adjustment to weighted average number of shares outstanding:
Weighted average number of shares outstanding 665,200 683,000
Add-Dilutive effect of outstanding options and warrants (as determined by
the application of the treasury stock method) 193,800 54,500
---------- ---------
Weighted average number of shares outstanding 859,000 737,500
========== =========
Primary earnings per share, as adjusted $1.87 $ .27
========== =========
FULLY DILUTED EARNINGS PER SHARE
Computation for Statement of Operations
- ---------------------------------------
Reconciliation of net income per statement of operations to amount used in primary
earnings per share computation:
Income before extraordinary items $1,598,062 $ 200,243
Add-Interest on short-term debt, net of tax effect, on application of assumed
proceeds from exercise of options and warrants in excess of 20% limitation 1,105 -
---------- ---------
Net income, as adjusted $1,599,167 $ 200,243
Additional Primary Computation
- ------------------------------
Net income, as adjusted per primary computation above $1,599,167 $ 200,243
Additional adjustment to weighted average number of shares outstanding:
Weighted average number of shares outstanding 665,200 683,000
Add-Dilutive effect of outstanding options and warrants (as determined by
the application of the treasury stock method) 193,800 54,500
---------- ---------
Weighted average number of shares outstanding 859,000 737,500
========== =========
Primary earnings per share, as adjusted $1.86 $ .27
========== =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,496,918
<SECURITIES> 0
<RECEIVABLES> 1,661,076
<ALLOWANCES> 0
<INVENTORY> 127,313
<CURRENT-ASSETS> 7,415,713
<PP&E> 26,774,018
<DEPRECIATION> 14,328,386
<TOTAL-ASSETS> 39,264,444
<CURRENT-LIABILITIES> 1,265,469
<BONDS> 0
0
0
<COMMON> 8,179
<OTHER-SE> 27,951,353
<TOTAL-LIABILITY-AND-EQUITY> 39,264,444
<SALES> 1,260,644
<TOTAL-REVENUES> 4,025,735
<CGS> 614,363
<TOTAL-COSTS> 1,775,100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 214,566
<INCOME-PRETAX> 2,250,635
<INCOME-TAX> 653,000
<INCOME-CONTINUING> 1,598,062
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,598,062
<EPS-PRIMARY> 1.87
<EPS-DILUTED> 1.86
</TABLE>
