SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)
Hoenig Group Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01
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(Title of Class of Securities)
434396107
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(CUSIP Number)
Kathryn L. Hoenig, Vice President, General Counsel and Secretary,
Hoenig Group Inc., Royal Executive Park,
4 International Drive, Rye Brook, NY 10573
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 7, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP NO. 434396107.
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SCHEDULE 13D
CUSIP No. 434396107
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fredric P. Sapirstein
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)(a)|_| (b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
PF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
| 7 SOLE VOTING POWER
| 577,400
NUMBER OF |
SHARES | 8 SHARED VOTING POWER
BENEFICIALLY | 15,000
OWNED BY |
EACH | 9 SOLE DISPOSITIVE POWER
REPORTING | 577,400
PERSON |
WITH | 10 SHARED DISPOSITIVE POWER
15,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
592,400
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
14 TYPE OF REPORTING PERSON (See Instructions)
IN
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Item 1. Security and Issuer. 7
This Statement relates to shares of common stock, $.01 par value per share
(the "Common Stock"), of Hoenig Group Inc. (the "Corporation"). The
Corporation's principal executive office is located at Royal Executive Park, 4
International Drive, Rye Brook, NY 10573.
Item 2. Identity and Background.
(a) This Statement is being filed by Fredric P. Sapirstein (the "Reporting
Person").
(b) The business address of the Reporting Person is: c/o Hoenig Group
Inc., Royal Executive Park, 4 International Drive, Rye Brook, NY
10573.
(c) The Reporting Person's present principal occupation is Chairman of the
Board, Chief Executive Officer, President and Director of the
Corporation. The principal business of the Corporation is the
provision (through the Corporation's wholly-owned brokerage
subsidiaries) of global securities brokerage, marketing and
distribution of proprietary and independent third-party research and
related services to institutional investors; and the provision
(through the Corporation's investment advisory subsidiary) of
professional investment management to public and corporate employee
benefit plans, investment partnerships and other institutional
clients. The address of the Corporation is: Royal Executive Park, 4
International Drive, Rye Brook, NY 10573.
(d) During the past five years, the Reporting Person has not been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) During the past five years, the Reporting Person has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction, as a result of which he was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
(f) The Reporting Person is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Person originally purchased 250,000 shares of Common Stock
from the Corporation on September 5, 1996, for $906,250, pursuant to an
Employment Agreement, dated September 5, 1996, between the Corporation and the
Reporting Person (the "Employment Agreement"), a copy of which is attached as
Exhibit A to this Schedule 13D. The Reporting Person purchased additional shares
of Common Stock as follows:
Number of Shares Purchase Price Date of Purchase
- ---------------- -------------- ----------------
15,000 $63,750 November 19, 1996
2,800 $12,250 November 21, 1996
10,000 $43,437 November 22, 1996
5,000 $21,562.50 November 25, 1996
5,000 $21,562.50 November 26, 1996
14,900 $65,187.50 December 3, 1996
8,000 $36,375.20 December 10, 1996
6,700 $31,295.70 December 17, 1996
2,500 $12,187.50 March 3, 1997
7,500 $37,468.50 March 10, 1997
All of such shares were purchased with cash provided from personal funds.
In addition, pursuant to the Employment Agreement, the Reporting Person was
granted ten-year options to purchase 500,000 shares of Common Stock at $3.625
per share, consisting of a non-qualified stock option to purchase 382,500
shares, an incentive stock option to purchase 110,000 shares and a non-qualified
stock option to purchase 7,500 shares. No cash or other consideration was paid
in connection with the grant of these options. Options with respect to 125,000
shares vested on September 5, 1996 and are presently exercisable. Options to
purchase an additional 125,000 shares will vest and become exercisable on
September 5, 1997.
The Employment Agreement also provided for the grant to the Reporting
Person of ten-year, non-qualified options to purchase 500,000 shares of Common
Stock at $5.00 per share, consisting of a non-qualified option to purchase
132,500 shares and a non-qualified option to purchase 367,500 shares. The
non-qualified options to purchase 500,000 shares vest on the ninth anniversary
of the date of grant, subject to acceleration if the closing price of the Common
Stock equals or exceeds certain target stock prices prior to such date. No cash
or other consideration was paid in connection with the grant of these options.
The Reporting Person is also the beneficial owner of 15,000 shares of
Common Stock owned by the Estate of Milton Sapirstein, M.D. (the "Estate"), for
which the Reporting Person serves as an executor.
Item 4. Purpose of Transaction.
The Reporting Person has acquired his beneficial ownership in the shares of
Common Stock for investment purposes. The Reporting Person does not have any
present plan or proposal as a stockholder which relates to, or would result in
any action with respect to, the matters listed in paragraphs (b) through (j) of
Item 4 of Schedule 13D. In the future, the Reporting Person may decide to
purchase additional shares of Common Stock in the open market or a private
transaction, or to sell any or all of his shares of Common Stock.
Item 5. Interest in Securities of the Issuer.
(a) According to the Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, as of August 13, 1997, the Corporation had issued
and outstanding 9,319,605 shares of Common Stock.
The Reporting Person is the beneficial owner of 592,400 shares of Common
Stock or 6.2% of the outstanding Common Stock, consisting of (i) 327,400 shares
of Common Stock owned directly, (ii) 125,000 shares of Common Stock which the
Reporting Person has a right to acquire pursuant to presently exercisable stock
options, (iii) 125,000 shares of Common Stock which the Reporting Person has a
right to acquire pursuant to stock options exercisable on September 5, 1997, and
(iv) 15,000 shares of Common Stock owned by the Estate for which the Reporting
Person serves as an executor.
(b) The Reporting Person has the sole power to vote, or to direct the vote
of, 577,400 shares of Common Stock, and shared power to vote, or to direct the
vote of, 15,000 shares of Common Stock; and sole power to dispose of, or to
direct the disposition of, 577,400 shares of Common Stock and shared power to
dispose of, or to direct the disposition of, 15,000 shares of Common Stock.
The Reporting Person shares power to vote, or to direct the vote, and power
to dispose of, or to direct the disposition of, the 15,000 shares of Common
Stock held by the Estate with Dr. Victor Sapirstein ("Dr. Sapirstein"), who is a
co-executor of the Estate. Dr. Sapirstein's present principal occupation is
Research Professor of Psychiatry at New York University and Senior Research
Scientist and Director of the Division of Neurobiology of the Nathan S. Kline
Institute for Psychiatric Research, a research affiliate of the New York
University Department of Psychiatry. Dr. Sapirstein's business address is c/o
Nathan S. Kline Institute, 140 Old Orangeburg Road, Orangeburg, NY 10962. During
the past five years, Dr. Sapirstein has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) and has not
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction, as a result of which he was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws. Dr. Sapirstein is a citizen of the United
States.
(c) The Reporting Person became the beneficial owner of more than 5% of the
outstanding shares of Common Stock as of July 7, 1997, which date is sixty days
prior to the vesting date of options with respect to 125,000 shares of Common
Stock. No transactions were effected by the Reporting Person during the sixty
days prior to July 7, 1997, and no transactions in the Common Stock have been
effected by the Reporting Person during the past sixty days.
(d) The Estate has the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of, 15,000 of the shares of
Common Stock beneficially owned by the Reporting Person.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Pursuant to the terms of the Employment Agreement, on September 5, 1996,
the Reporting Person purchased 250,000 shares of Common Stock from the
Corporation for $3.625 per share, which was the closing price on the last
trading day before his employment began. The Employment Agreement prohibits the
sale or other disposition of such shares of Common Stock prior to September 5,
1998, and provides that such shares will be "restricted securities" under Rule
144 issued under the Securities Act of 1933 ("Rule 144"), subject to the
Corporation's obligation to provide one registration statement on demand to any
pledgee of such Common Stock at the Corporation's cost and expense.
The Employment Agreement also provided for the grant to the Reporting
Person of ten-year options to purchase 500,000 shares of Common Stock at $3.625
per share, consisting of a non-qualified stock option to purchase 382,500
shares, an incentive stock option to purchase 110,000 shares and a non-qualified
stock option to purchase 7,500 shares. These options (the "Service-Based
Options") were granted under the Corporation's 1991 Stock Option Plan, a copy of
which is attached as Exhibit B to this Schedule 13D; the 1991 Stock Option Plan
Non-Statutory Stock Option Agreement, dated September 5, 1996, between the
Corporation and the Reporting Person, a copy of which is attached as Exhibit C
to this Schedule 13D; the Corporation's 1994 Stock Option Plan (the "1994
Plan"), a copy of which is attached as Exhibit D to this Schedule 13D; the 1994
Stock Option Plan Incentive Stock Option Agreement, dated September 5, 1996,
between the Corporation and the Reporting Person, a copy of which is attached as
Exhibit E to this Schedule 13D; and the 1994 Stock Option Plan Non-Qualified
Stock Option Agreement, dated September 5, 1996, between the Corporation and the
Reporting Person, a copy of which is attached as Exhibit F to this Schedule 13D.
The Service-Based Options vest 25% on the date of grant and 25% on each of the
first three anniversaries of the grant date. Options to purchase 125,000 shares
vested on September 5, 1996 and are presently exercisable. Options to purchase
an additional 125,000 shares will vest and become exercisable on September 5,
1997.
In addition, pursuant to the Employment Agreement, the Reporting Person was
granted ten-year, non-qualified options to purchase 500,000 shares of Common
Stock at $5.00 per share, consisting of a non-qualified option to purchase
132,500 shares and a non-qualified option to purchase 367,500 shares. These
options were granted under the 1994 Plan; the 1994 Stock Option Plan
Non-Qualified Stock Option Agreement, dated September 5, 1996, between the
Corporation and the Reporting Person, a copy of which is attached as Exhibit G
to this Schedule 13D; the Corporation's 1996 Long-Term Stock Incentive Plan, a
copy of which is attached as Exhibit H to this Schedule 13D and the 1996
Long-Term Stock Incentive Plan Grant Certificate, dated November 14, 1996,
issued to the Reporting Person, a copy of which is attached as Exhibit I to this
Schedule 13D. The non-qualified options to purchase 500,000 shares vest on the
ninth anniversary of the date of grant, subject to accelerated vesting as
follows: (i) 50% vests if the average closing price of the Common Stock equals
or exceeds $7.00 per share for twenty consecutive trading days; and (ii) 100%
vests if the average closing price of the Common Stock equals or exceeds $8.00
per share for twenty consecutive trading days.
All of the above options will vest immediately upon a "change of control",
and the Service-Based Options will vest immediately following termination of the
Reporting Person's employment other than for "cause" or for "good reason" if
such termination occurs after September 5, 1997. The options are not assignable
or transferable except by will or by the laws of descent and distribution and do
not grant any privileges as a stockholder with respect to any shares of Common
Stock until the options are exercised. The shares of Common Stock acquired upon
exercise of the options will be "restricted securities" under Rule 144.
Item 7. Material to Be Filed as Exhibits.
Exhibit A - Employment Agreement, dated September 5, 1996 between
Fredric P. Sapirstein and Hoenig Group Inc.
Exhibit B - Hoenig Group Inc. 1991 Stock Option Plan
Exhibit C - 1991 Stock Option Plan Non-Statutory Stock Option
Agreement, dated September 5, 1996, between Hoenig Group Inc. and
Fredric P. Sapirstein
Exhibit D - Hoenig Group Inc. 1994 Stock Option Plan
Exhibit E - Hoenig Group Inc. 1994 Stock Option Plan Incentive Stock
Option Agreement, dated September 5, 1996, between Hoenig Group Inc.
and Fredric P. Sapirstein
Exhibit F - Hoenig Group Inc. 1994 Stock Option Plan Non-Qualified
Stock Option Agreement, dated September 5, 1996, between Hoenig Group
Inc. and Fredric P. Sapirstein
Exhibit G - Hoenig Group Inc. 1994 Stock Option Plan Non-Qualified
Stock Option Agreement, dated September 5, 1996, between Hoenig Group
Inc. and Fredric P. Sapirstein
Exhibit H - Hoenig Group Inc. 1996 Long-Term Stock Incentive Plan
Exhibit I - Hoenig Group Inc. 1996 Long-Term Stock Incentive Plan
Grant Certificate, dated November 14, 1996, issued to Fredric P.
Sapirstein
<PAGE>
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: August 26, 1997
Fredric P. Sapirstein
/s/ Fredric P. Sapirstein
---------------------------
<PAGE>
EXHIBIT A
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated September 5, 1996 (this "Agreement"), by and
between Hoenig Group Inc., a Delaware corporation (the "Company"), and Fredric
P. Sapirstein (the "Executive").
WHEREAS, the Company desires to employ the Executive as President and Chief
Executive Officer, and the Executive desires to be retained in such capacities,
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
made herein, the Company and the Executive agree as follows:
1. Employment; Duties.
(a) The Company shall employ the Executive as President and Chief
Executive Officer for the "Employment Period" as defined in Section 2. The
Executive, in his capacity as President and Chief Executive Officer, shall have
such duties, responsibilities and authority normally incident to such offices,
subject to the provisions of the bylaws of the Company. The precise duties,
responsibilities and authority of the Executive may be expanded, limited or
modified, from time to time, at the discretion of the Board of Directors of the
Company (the "Board") consistent with the ordinary duties, responsibilities and
authority of a President and Chief Executive Officer.
(b) The Company shall use its best efforts to cause the Executive to
be elected to the Board and serve as its Chairman and shall include him in the
management slate for election as a director at every stockholders' meeting at
which his term as a director would otherwise expire. If requested by the Board,
the Executive shall serve as a member of the board of directors of any one or
more subsidiaries of the Company.
(c) During the Employment Period, the Executive shall render his
services solely in the performance of his duties hereunder. The Executive agrees
that during the Employment Period, he shall devote his full working time,
attention, knowledge and experience and give his best effort, skill and
abilities, exclusively to promote the business and interests of the Company. The
Executive may not serve as an officer or director of, make investments in, or
otherwise participate in, any other entity without the prior written approval of
the Board; provided, that the foregoing shall not be deemed to prohibit the
Executive from acquiring, directly or indirectly, solely as an investment, not
more than two percent (2%) of any class of securities of any entity that are
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended (the "1934 Act") or investments in non-public entities pursuant to
policies and procedures generally applicable to executives of the Company and
its direct or indirect subsidiaries; and provided further, that so long as it
does not interfere with the Executive's employment, the Executive may serve as
an officer, director or otherwise participate in purely educational, welfare,
social, religious and civic organizations.
2. Employment Period. This Agreement shall have a term commencing on the
date hereof and ending on December 31, 1999 (the "Initial Period"), unless
sooner terminated in accordance with the provisions of Section 4. On the
expiration of the Initial Period and on each yearly anniversary thereof, this
Agreement shall automatically renew for an additional one-year period (each such
one-year period being referred to as a "Renewal Period"), unless sooner
terminated in accordance with the provisions of Section 4, provided, however,
that no renewal shall occur if the Company or the Executive notifies the other
in writing of its intention not to renew this Agreement not less than six months
prior to such expiration date or anniversary, as the case may be. The term of
this Agreement, as in effect from time to time, is referred to herein as the
"Employment Period".
3. Compensation and Benefits. The Executive shall be entitled to the
following compensation and benefits, in each case subject to applicable
statutory withholdings:
(a) Base Compensation. The Executive shall be paid an aggregate base
salary (the "Base Salary") of $400,000 per annum. The Base Salary shall be
payable in a manner consistent with the normal payroll practices of the Company
in effect from time to time. The Board, in its sole discretion, or at the
recommendation of the Compensation Committee, may increase (but not decrease)
the Base Salary, at any time.
(b) Annual Bonus. In addition to the Base Salary, the Executive shall
be entitled to receive a discretionary annual bonus for each fiscal year of the
Company that ends during the Employment Period (the "Bonus Award") based upon
the achievement of annual Company and individual performance goals to be set by
the Compensation Committee in consultation with the Executive, provided, that in
no case shall the Bonus Award for fiscal years ending December 31, 1997 and
December 31, 1998 be less than $300,000, and for the fiscal year ending on
December 31, 1996, $300,000 pro-rated based on the portion of the fiscal year
that includes the Employment Period. Such minimum shall operate as a draw
against the Bonus Award otherwise payable. To the extent necessary to avoid the
limitation on the federal tax deductibility of the Bonus Award for any year
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), payment thereof may, at the discretion of the Company, be either (i)
made pursuant to a plan to be adopted by the Company, which plan may be
contingent upon approval by the Company's stockholders (in which case, if
stockholder approval is not obtained, the Bonus Award above the minimum shall
not be paid), or (ii) deferred to the first taxable year of the Company in which
the payment would be fully deductible. Except as provided in the preceding
sentence, the Bonus Award for a fiscal year shall be payable as soon as
practicable after the release of the Company's audited financial statements for
such fiscal year. In the case of clause (i) above, such a plan shall conform to
the requirements of Section 162(m) of the Code and shall be adopted by the Board
prior to, and presented for the approval of Stockholders at, a meeting of the
Company's stockholders occurring no later than the Company's 1997 Annual Meeting
of Stockholders. In the case of clause (ii) above, amounts deferred shall be
credited with such interest and on such other terms as the Company and the
Executive shall mutually agree.
(c) Stock Options.
(1) The Executive shall be granted, on the date hereof, options
to purchase 500,000 shares of the Company's common stock, par value $.01 per
share ("Common Stock") as follows: (i) an option with respect to 382,500 shares
of Common Stock shall be granted under the Company's 1991 Stock Option Plan, and
(ii) an option with respect to 117,500 shares of Common Stock shall be granted
under the Company's 1994 Stock Option Plan (the "Non-Performance Options", and
collectively, with the options granted pursuant to clause (2), the "Options").
The exercise price per share of Common Stock subject to the Non-Performance
Options shall equal the closing sales price of a share of Common Stock on the
date of this Agreement. The Non-Performance Options shall be immediately vested
and exercisable on the date hereof as to 25% of the shares subject thereto, and,
subject to clause (3) below, an additional 25% shall become vested and
exercisable on each of the first three anniversaries of the date hereof.
Non-Performance Options granted under the Company's 1991 Stock Option Plan shall
be non-qualified options, and of those granted under the Company's 1994 Stock
Option Plan, 110,000 shall be incentive stock options and 7,500 shall be
non-qualified options.
(2) The Executive shall be granted non-qualified options to
purchase an additional 500,000 shares of Common Stock as follows: (i) an option
with respect to 132,500 shares of Common Stock shall be granted as of the date
hereof under the Company's 1994 Stock Option Plan, and (ii) an option with
respect to 367,500 shares of Common Stock shall be granted on the date of the
next meeting of stockholders which shall take place no later than the Company's
1997 Annual Meeting of Stockholders, provided that at such meeting the
stockholders approve an amendment to one or more of the Company's stock option
plans or the adoption of a new plan that will enable such option to be granted
(the "Performance Options"). The exercise price per share of Common Stock
subject to the Performance Options shall equal $5.00. Subject to acceleration as
provided in the next sentence, the Performance Options shall become vested and
exercisable on the ninth anniversary of the date such options are granted,
subject to clause (3) below. If, during any period of at least 20 consecutive
trading days commencing after the date of this Agreement, the average of the
closing price of the Common Stock on each such trading day shall equal or exceed
the target stock prices as set forth below, then each Performance Options shall,
subject to clause (3) below, become vested and exercisable as of the end of such
20-day period (or, if later, the date the option is granted) as to such number
of shares equal to the total number of shares subject to the option on the date
the option is granted, multiplied by the applicable vesting percentage set forth
below:
Target Stock Price Vesting Percentage
$7.00 50%
$8.00 100%.
(3) Upon Executive's termination of employment with the Company
for any reason (except termination for Cause) (i) all Options that are not then
vested and exercisable shall immediately terminate, except in the event of
termination of Executive's employment after September 5, 1997, by the Company
other than for Cause or by the Executive with Good Reason, in which event all
Non-Performance Options shall become fully vested and exercisable at the time of
such termination of employment, and (ii) all Options that are or become vested
and exercisable at the time of such termination of employment shall remain
exercisable thereafter for a period of three months, or, if such termination is
by reason of death or Disability, for a period of one year. If such termination
is for Cause, all Options, whether or not vested and exercisable, shall
terminate. In no event may any option be exercised after the tenth anniversary
of the date such Option is granted.
(4) Each Option shall be subject to the terms and conditions of
the plans pursuant to which it is granted (including acceleration of vesting
upon a change in control of the Company), and shall be evidenced by an option
agreement which shall contain terms not inconsistent with the provisions of this
Section 3(c).
(d) Stock Purchase. On the date of this Agreement, the Executive shall
purchase from the Company 250,000 shares of Common Stock (the "Shares") at a
price per share equal to the closing sales price of a share of Common Stock on
the last trading date immediately prior to the date of this Agreement, payable
by the Executive no later than the third business day following the date of this
Agreement. The Executive may not sell or otherwise dispose of the Shares prior
to the second anniversary of the date of this Agreement. The Shares will be
restricted securities under Rule 144 issued under the Securities Act of 1933,
provided that the Company will provide one registration statement on demand to
any pledgee of the Shares at the Company's cost and expense. The Shares shall be
duly authorized, validly issued, fully paid and nonassessable. The Shares shall
be represented by stock certificates registered in the name of the Executive,
and shall bear a legend reflecting the restrictions set forth above.
(e) Benefits. The Executive shall also be entitled to participate in
the employee and fringe benefit and group insurance programs provided by the
Company for its officers and employees generally and in accordance with the
terms of the applicable plan documents as they may be revised from time to time.
Executive shall be entitled to receive such other benefits as are generally
provided to executives of the Company and its subsidiaries. The Executive shall
also be entitled to reimbursement for reasonable out-of-pocket expenses incurred
in connection with the business of the Company in accordance with the Company's
policies and procedures.
4. Termination.
(a) The Company may, with or without prior notice, terminate this
Agreement with or without Cause, or upon the Executive's Disability. The
Executive may terminate this Agreement for Good Reason, or upon the Executive's
Disability. This Agreement shall automatically terminate upon the Executive's
death. This Agreement shall also terminate upon expiration of the Initial Period
or any Renewal Period if notice is provided by either party in accordance with
Section 2. Except as provided in Sections 3(c) and 4(b), in the event this
Agreement is terminated, the Executive's rights and the obligations of the
Company hereunder shall cease as of the effective date of the termination,
provided, however, that the Executive shall be entitled to receive any accrued
but unpaid Base Salary, any earned but unpaid Bonus Awards and any amount
accrued under Company benefit plans as provided pursuant to the terms of such
plans (the "Accrued Obligations").
(b) In the event the Company terminates this Agreement other than for
Cause, or if the Executive terminates this Agreement for Good Reason, the
Executive shall be entitled to receive, in addition to the Accrued Obligations,
the following payments ("Termination Payments"), in each case subject to
applicable statutory withholdings :
(1) if such termination occurs on or prior to the first
anniversary hereof, a payment equal to $700,000, such payment to be made in
equal monthly installments over the one-year period following such termination;
(2) if such termination occurs after the first anniversary
hereof, and on or prior to the second anniversary hereof, a payment equal to
$1,400,000, such payment to be made in equal monthly installments over the
two-year period following such termination; and
(3) if such termination occurs after the second anniversary
hereof, a payment equal to the product of (i) the sum of Executive's Base Salary
and Bonus Awards payable (without regard to any deferral necessary to comply
with Section 162(m) of the Code) for the three fiscal years ending prior to such
termination, or, if less, the number of fiscal years ending after the date
hereof and prior to such termination (if the fiscal year ended December 31, 1996
is to be taken into account, the Base Salary and Bonus Award for such year shall
be annualized) divided by three, or, if less, the number of fiscal years ending
after the date hereof and prior to such termination, and (ii) the number of
years and/or fraction thereof remaining in the then existing Employment Period.
Payment of this amount shall be made in equal monthly installments over such
remaining Employment Period.
(4) in the event of the Executive's death after this Agreement is
terminated other than for Cause or for Good Reason, the Company shall make any
Termination Payments which would otherwise have been payable to the Executive if
he had lived under this Section 4(b) to Executive's estate or designated
beneficiary.
(c) In the event that after the second anniversary hereof, the Company
terminates this Agreement other than for Cause, or the Executive terminates this
Agreement for Good Reason, the Executive shall be entitled to receive, in
addition to the Accrued Obligations and any Termination Payments as provided in
Section 4(b)(3) hereof, a Bonus Award equal to the Bonus Award earned by the
Executive for the immediately preceding fiscal year multiplied by a fraction the
numerator of which shall be the number of days elapsed in the fiscal year to the
date of such termination and the denominator of which shall be 365; provided
there shall be deducted from any such Bonus Award the amount of any Bonus Award
previously paid to the Executive with respect to such period.
(d) A termination of the Executive's employment (i) upon expiration of
this Agreement at the end of the Initial Period or any Renewal Period, whether
at the Company's option or the Executive's option, or (ii) by reason of the
Executive's Death or Disability, shall not constitute a termination other than
for Cause or for Good Reason under this Agreement, and therefore, upon such
termination, the Executive shall be entitled to receive only the Accrued
Obligations.
(e) As a condition to his entitlement to receive Termination Payments,
the Executive shall (i) have executed and delivered to the Company a waiver and
release satisfactory to the Company waiving and releasing all rights and claims
against the Company and its direct or indirect subsidiaries and their respective
officers, agents, directors and employees, and such waiver and release shall
have become irrevocable, and (ii) comply with Sections 3(d), and 5 through 9.
(f) In the event this Agreement is terminated for any reason (except
by death), the Executive agrees that if at that time he is a director or officer
of the Company or any of its direct or indirect subsidiaries, he will
immediately deliver his written resignation as such director or officer, such
resignation to become effective immediately.
(g) Notwithstanding anything contained herein to the contrary, the
Company may reduce the Termination Payments to the extent such Termination
Payments, when added to other payments made to the Executive (including the
vesting of stock options), constitute a "parachute payment" as defined in
Section 280G of the Code.
(h) For purposes of this Agreement:
(1) "Cause" shall mean an event where the Executive: (i) commits
any act of fraud, willful misconduct or dishonesty in connection with his
employment or which materially injures the Company or its direct or indirect
subsidiaries; (ii) breaches Section 3(d), 8 or 9, or any other material
provision of this Agreement or any material representation, warranty, covenant
or condition in this Agreement or any material fiduciary duty to the Company or
its direct or indirect subsidiaries; (iii) fails, refuses or neglects to timely
perform any material duty or obligation under this Agreement and such failure,
refusal or neglect is not cured by the Executive within fifteen (15) days from
the date the Company notifies the Executive thereof; (iv) commits a material
violation of any material law, rule, regulation or by-law of any governmental
authority (state, federal or foreign), any securities exchange or association or
other regulatory or self-regulatory body or agency applicable to the Company or
its direct or indirect subsidiaries or any general policy or directive of the
Company or its direct or indirect subsidiaries communicated in writing to the
Executive; (v) is charged with a crime involving moral turpitude, dishonesty,
fraud or unethical business conduct, or a felony; (vi) is subject to the
occurrence of an event or condition which makes it unlawful for the Executive to
perform his duties hereunder, including the issuance of any order, decree,
decision or judgment, which remains in effect for eight weeks or more; (vii)
gives or accepts undisclosed commissions or other payments in cash or in kind in
connection with the affairs of the Company or any of its direct or indirect
subsidiaries or their respective clients; (viii) is expelled or suspended in
excess of eight weeks, or is subject to an order temporarily (for a period in
excess of eight weeks) or permanently enjoining the Executive from the
securities, investment management or investment banking business or from acting
in the capacity contemplated by this Agreement by the SEC, the NASD, any
national securities exchange or any self-regulatory agency or governmental
authority, state, foreign or federal; or (ix) fails to obtain or maintain any
registration, license or other authorization or approval that the Company or its
direct or indirect subsidiaries in their discretion reasonably believe is
required for the Executive to perform his duties hereunder.
(2) "Good Reason" shall mean (i) the Company changes the
Executive's status, title or position as President and Chief Executive Officer
of the Company and such change represents a material reduction in such status,
title or position conferred hereunder; (ii) Executive is not elected to the
Board or elected Chairman of the Board, or does not remain a director of the
Board or Chairman of the Board during the Employment Term (other than as a
result of a voluntary resignation by the Executive pursuant to Section 4(f) or
otherwise); (iii) the failure of the Company to make a timely grant to the
Executive of the stock options described in part (ii) of the first sentence of
Section 3(c)(2) hereof; and (iv) the Company materially breaches this Agreement,
and such change or breach is not cured by the Company within thirty (30) days
from the date the Executive delivers a Notice of Termination for Good Reason.
Such "Notice of Termination for Good Reason" shall include the specific section
of this Agreement which was relied upon and the reason that the Company's act or
failure to act has given rise to his termination for Good Reason.
(3) "Disability" shall mean the Executive's inability to perform
his duties by reason of mental or physical disability for at least one hundred
and twenty (120) consecutive days or any one hundred and twenty (120) days
(whether or not consecutive) in any one-hundred eighty (180) consecutive day
period. In the event of a dispute as to whether the Executive is disabled within
the meaning hereof, either party may from time to time request a medical
examination of the Executive by a doctor appointed by the Chief of Staff of a
hospital selected by mutual agreement of the parties, or as the parties may
otherwise agree, or, failing agreement, a hospital selected in good faith by the
Board of Directors of the Company. The written medical opinion of such doctor
shall be conclusive and binding upon the parties as to whether the Executive has
become disabled and the date when such disability arose. The cost of any such
medical examination shall be borne by the Company.
5. Trade Secrets. The Executive recognizes that it is in the legitimate
business interest of the Company to restrict his disclosure or use of Trade
Secrets and Confidential Information relating to the Company and its direct or
indirect subsidiaries for any purpose other than in connection with his
performance of his duties to the Company, and to limit any potential
appropriation of such Trade Secrets and Confidential Information by the
Executive. The Executive therefore agrees that all Trade Secrets and
Confidential Information relating to the Company and its direct or indirect
subsidiaries heretofore or in the future obtained by the Executive shall be
considered confidential and the proprietary information of the Company and its
direct or indirect subsidiaries. During the Employment Period the Executive
shall not use or disclose, or authorize any other person or entity to use or
disclose, any Trade Secrets or other Confidential Information, other than as
necessary to further the business objectives of the Company in accordance with
the terms of his employment hereunder. The term "Trade Secrets or other
Confidential Information" includes, by way of example and without limitation,
matters of a technical nature, "know-how", formulas, secret processes, works of
authorship, computer programs (including documentation of such programs),
services, materials, patent applications, new product plans, other plans,
technical information, technical improvements, test data, progress reports and
research projects, and matters of a business nature, such as business plans,
prospects, financial information, marketing plans and strategies, proprietary
information about costs, profits, markets and sales, lists of customers and
suppliers of the Company and its direct or indirect subsidiaries, procurement
and promotional information, credit and financial data concerning customers or
suppliers of the Company and its direct or indirect subsidiaries, information
relating to the management, operation and planning of the Company and its direct
and indirect subsidiaries, plans for future development, and other information
of a similar nature to the extent not available to the public. After termination
of the Executive's employment with the Company for any reason, the Executive
shall not use or disclose Trade Secrets or other Confidential Information.
6. Return of Documents and Property. Upon the termination of the
Executive's employment with the Company, or at any time upon the request of the
Company, the Executive (or his heirs or personal representatives) shall deliver
to the Company (a) all documents and materials (including, without limitation,
computer files) containing Trade Secrets or other Confidential Information
relating to the business and affairs of the Company and its direct and indirect
subsidiaries, and (b) all documents, materials and other property (including,
without limitation, computer files) belonging to the Company or its direct or
indirect subsidiaries, which in either case are in the possession or under the
control of the Executive (or his heirs or personal representatives).
7. Discoveries and Work. All Discoveries and Works made or conceived by the
Executive during his employment by the Company, jointly or with others, that
relate to the present or anticipated activities of the Company or its direct or
indirect subsidiaries, or are used or usable by the Company or its direct or
indirect subsidiaries shall be owned by the Company or its direct or indirect
subsidiaries. The term "Discoveries and Works" includes, by way of example but
without limitation, Trade Secrets and other Confidential Information, patents
and patent applications, trademarks and trademark registrations and
applications, service marks and service mark registrations and applications,
trade names, copyrights and copyright registrations and applications. The
Executive shall (a) promptly notify, make full disclosure to, and execute and
deliver any documents requested by, the Company, as the case may be, to evidence
or better assure title to Discoveries and Works in the Company or its direct or
indirect subsidiaries, as so requested, (b) renounce any and all claims,
including but not limited to claims of ownership and royalty, with respect to
all Discoveries and Works and all other property owned or licensed by the
Company or its direct or indirect subsidiaries, (c) assist the Company or its
direct or indirect subsidiaries in obtaining or maintaining for itself at its
own expense United States and foreign patents, copyrights, trade secret
protection or other protection of any and all Discoveries and Works, and (d)
promptly execute, whether during his employment with the Company or thereafter
at the Company's expense, all applications or other endorsements necessary or
appropriate to maintain patents and other rights for the Company or its direct
or indirect subsidiaries and to protect the title of the Company or its direct
or indirect subsidiaries thereto, including but not limited to assignments of
such patents and other rights. Any Discoveries and Works which, within six
months after the termination of the Executive's employment with the Company, are
made, disclosed, reduced to a tangible or written form or description, or are
reduced to practice by the Executive and which pertain to the business carried
on or products or services being sold or developed by the Company or its direct
or indirect subsidiaries at the time of such termination shall, as between the
Executive and, the Company, be rebuttably presumed to have been made during the
Executive's employment by the Company. The Executive acknowledges that all
Discoveries and Works shall be deemed "works made for hire" under the Copyright
Act of 1976, as amended, 17 U.S.C. ss.101.
8. Non-Competition. From and after the date hereof, the Executive will not,
except pursuant to the terms hereof, directly or indirectly, own, manage,
operate, join, finance control or participate in the ownership, management,
operation or control of, or be employed or be otherwise connected in any manner
with, any business under a name similar to the name of the Company or any direct
or indirect subsidiary thereof. During the Noncompetition Period, the Executive
will not (except as an officer, director, employee, agent or consultant of the
Company) directly or indirectly, own, manage, operate, join, or have a financial
interest in, control or participate in the ownership, management, operation or
control of, or be employed as an employee, agent or consultant, or in any other
individual or representative capacity whatsoever, or use or permit his name to
be used in connection with, or be otherwise connected in any manner with (i) any
business or enterprise engaged (wherever located) in the design, development,
manufacture, distribution or sale of any products, or the provision of any
services, which the Company or its direct or indirect subsidiaries were
designing, developing, manufacturing, distributing, selling or providing at any
time during the one year immediately preceding the termination of this Agreement
or (ii) any business which is similar to or competitive with the business
carried on or planned by the Company or its direct or indirect subsidiaries at
any time during the one year immediately preceding the termination of this
Agreement, unless the Executive shall have obtained the prior written consent of
the Board, provided that the foregoing restriction shall not be construed to
prohibit the ownership by the Executive of not more than two percent (2%) of any
class of securities of any corporation which is engaged in any of the foregoing
businesses, having a class of securities registered pursuant to Sections 12(b)
or 12(g) of the 1934 Act, which securities are publicly owned and regularly
traded on any national exchange or in the over-the-counter market, provided
further, that such ownership represents a passive investment and that neither
the Executive nor any group of persons including the Executive in any way,
either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes part
in its business other than exercising his rights as a stockholder, or seeks to
do any of the foregoing. For purposes of this Agreement, the Noncompetition
Period shall mean the period during which the executive is employed by the
Company or any of its direct or indirect subsidiaries, and (i) the lesser of one
year following termination of this Agreement or the remaining term of the
Employment Period if such termination is for Cause; (ii) the lesser of one year
following termination of this Agreement, or the remaining term of the Employment
Period if this Agreement is terminated by the Executive other than for Good
Reason; and (iii) the period during which the Executive is receiving Termination
Payments. Notwithstanding the foregoing, in the event that the Company
terminates this Agreement other than for Cause, or if the Executive terminates
this Agreement for Good Reason, the Executive may elect at any time after such
termination, by ten days advance written notice to the Company, to be relieved
of the provisions of this Section 8 and Section 9. On and after such election,
the Company shall have no further obligation to make any payments to the
Executive pursuant to Section 4(b) hereof, except for such amounts as shall have
been accrued prior to the date of such election. Such election shall not effect
any of the rights of the Company with respect to any violation of this Section 8
or Section 9 occurring prior to such election.
9. Non-Solicitation. During the Noncompetition Period, the Executive
agrees, directly or indirectly, whether for his own account or for the account
of any other individual or entity, not to solicit or canvas the trade, business
or patronage of, or sell any products or services which are the same as or
similar to those designed, developed, manufactured, distributed or sold by the
Company or its direct or indirect subsidiaries to, any individuals or entities
that were either customers of the Company or any of its direct or indirect
subsidiaries during the twelve months immediately preceding the termination of
this Agreement, or prospective customers with respect to whom a sales effort,
presentation or proposal was made by the Company or any of its direct or
indirect subsidiaries during the twelve months immediately preceding the date of
termination or expiration, as the case may be. The Executive further agrees that
during the Noncompetition Period, he shall not, directly or indirectly, (i)
solicit, induce, enter into any agreement with, or attempt to influence any
individual who was an employee or consultant of the Company or any of its direct
or indirect subsidiaries at any time during the time the Executive was employed
by the Company, to terminate his or her employment relationship with the Company
or any of its direct or indirect subsidiaries or to become employed by the
Executive or any individual or entity by which Executive is employed or (ii)
interfere in any other way with the employment, or other relationship, of any
employee or consultant of the Company or any of its direct or indirect
subsidiaries.
10. Enforcement. (a) The Executive agrees that the remedies at law for any
breach or threat of breach by him of any of the provisions of Sections 5 through
9 will be inadequate, and that, in addition to any other remedy to which the
Company may be entitled at law or in equity, the Company shall be entitled to a
temporary or permanent injunction or injunctions or temporary restraining order
or orders to prevent breaches of the provisions of Sections 5 through 9 and to
enforce specifically the terms and provisions thereof, in each case without the
need to post any security or bond. Nothing herein contained shall be construed
as prohibiting the Company from pursuing, in addition, any other remedies
available to the Company for such breach or threatened breach. A waiver by the
Company of any breach of any provision hereof shall not operate or be construed
as a waiver of a breach of any other provision of this Agreement or of any
subsequent breach by the Executive.
(b) It is expressly understood and agreed that although the Company
and the Executive consider the restrictions contained in Sections 5 through 9 to
be reasonable for the purpose of preserving the goodwill, proprietary rights and
going concern value of the Company, if a final judicial determination is made by
a court having jurisdiction that the time or territory or any other restriction
contained in such Sections 5 through 9 is an unenforceable restriction on the
Executive's activities, the provisions of such Sections 5 through 9 shall not be
rendered void but shall be deemed amended to apply as to such maximum time and
territory and to such other extent as such court may judicially determine or
indicate to be reasonable. Alternatively, if the court referred to above finds
that any restriction contained in Sections 5 through 9 or any remedy provided
herein is unenforceable, and such restriction or remedy cannot be amended so as
to make it enforceable, such finding shall not affect the enforceability of any
of the other restrictions contained therein or the availability of any other
remedy. The provisions of Sections 5 through 9 shall in no respect limit or
otherwise affect the Executive's obligations under other agreements with the
Company.
11. Executive's Representations. The Executive represents and warrants to
the Company that (i) he is able to perform fully his duties and responsibilities
contemplated by this Agreement and (ii) there are no restrictions, covenants,
agreements or limitations of any kind on his right or ability to enter into and
fully perform the terms of this Agreement.
12. Assignment. The rights and obligations of the parties under this
Agreement shall not be assignable by either the Company or the Executive,
provided that this Agreement is assignable by the Company to any affiliate of
the Company, to any successor in interest to the business of any of the Company,
or to a purchaser of all or substantially all of the assets of the Company.
13. Notices. Any notice required or permitted under this Agreement shall be
deemed to have been effectively made or given if in writing and personally
delivered, mailed properly addressed in a sealed envelope, postage prepaid by
certified or registered mail, or delivered by a reputable overnight delivery
service. Unless otherwise changed by notice, notice shall be properly addressed
to the Executive if addressed to:
Fredric P. Sapirstein
150 Central Park South
New York, NY 10019
and properly addressed to the Company if addressed to:
Hoenig Group Inc.
Royal executive Park
4 International Drive
Rye Brook, NY 10573
Attention: General Counsel
14. Severability. Wherever there is any conflict between any provision of
this Agreement and any statute, law, regulation or judicial precedent, the
latter shall prevail, but in such event the provisions of this Agreement thus
affected shall be curtailed and limited only to the extent necessary to bring
them within the requirements of the law. In the event that any provision of this
Agreement shall be held by a court of proper jurisdiction to be indefinite,
invalid, void or voidable or otherwise unenforceable, the balance of the
Agreement shall continue in full force and effect unless such construction would
clearly be contrary to the intentions of the parties or would result in an
unconscionable injustice.
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Effect of Termination. Notwithstanding anything to the contrary
contained herein, if this Agreement or the Executive's employment is validly
terminated pursuant to Section 4 or expires by its terms, the provisions of
Sections 5 through 10, 14, 17 and 18 shall continue in full force and effect.
17. Disputes. Any claim or controversy arising out of or relating to this
Agreement, or any breach thereof, or otherwise arising out of or relating to the
Executive's employment, compensation and benefits with the Company or the
termination thereof, shall be settled by arbitration in New York, New York in
accordance with the Voluntary Labor Arbitration Rules of the American
Arbitration Association ("AAA"), or if the AAA refuses to accept and process any
such dispute for arbitration, then the rules of procedure established by the
Center for Public Resources, provided, however, that the parties agree that (i)
the panel of arbitrators shall be prohibited from disregarding, adding to or
modifying the terms of this Agreement; (ii) the panel of arbitrators shall be
required to follow established principles of substantive law and the law
governing burdens of proof; (iii) only legally protected rights may be enforced
in arbitration; (iv) the panel of arbitrators shall be without authority to
award punitive or exemplary damages; (v) the chairperson of the arbitration
panel shall be an attorney licensed to practice law in New York who has
experience in similar matters; (vi) the panel of arbitrators shall consist
solely of arbitrators from the securities industry; and (vii) any demand for
arbitration made by the Executive must be filed and served, if at all, within
180 days of the occurrence of the act or omission complained of. Any claim or
controversy not submitted to arbitration in accordance with this Section 19
shall be considered waived and, thereafter, no arbitration panel or tribunal or
court shall have the power to rule or make any award on any such claim or
controversy. The award rendered in any arbitration proceeding held under this
Section 19 shall be final and binding, and judgment upon the award may be
entered in any court having jurisdiction thereof, provided that the judgment
conforms to established principles of law and is supported by substantial record
evidence. Notwithstanding the foregoing, either the Company or the Executive may
elect not to have this Section 17 apply with respect to matters arising from the
provisions of Sections 5 through 9, in which case such matters shall be subject
to the enforcement provisions of Section 10 hereof.
18. Attorney's Fees. The Company shall pay Executive's reasonable
attorneys' fees incurred in connection with the negotiation and preparation of
this Agreement in an amount not exceed $15,000.
19. Miscellaneous; Choice of Law. This Agreement constitutes the entire
agreement, and supersedes all prior agreements, of the parties hereto relating
to the subject matter hereof, and there are no written or oral terms or
representations made by either party other than those contained herein. This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
HOENIG GROUP INC.
By: /s/ Alan B. Herzog
------------------
Its: Chief Operating Officer
/s/ Fredric P. Sapirstein
- -------------------------
Fredric P. Sapirstein
<PAGE>
EXHIBIT B
1991 STOCK OPTION PLAN
1. Purpose. The purpose of this 1991 Stock Option Plan (the "Plan") of
Hoenig Group Inc., a Delaware corporation (the "Company"), is to attract,
retain, and motivate directors, officers and employees of the Company and its
subsidiaries by giving them an opportunity to acquire common stock, $.01 par
value, of the Company ("Common Stock"). Options granted under this Plan may be
"nonstatutory options" ("NSOs") or "incentive stock options" ("ISOs") intended
to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as
it has been and in the future may be amended from time to time (the "Code"),
and, if not inconsistent, the requirements of analogous state income tax laws.
2. Administration
2.1 By the Administrator. This Plan shall be administered by a
committee (the "Committee") appointed by the Board of Directors of the Company
(the "Board") or, if no Committee is appointed, by the Board (in either case,
the "Administrator"). The Board may delegate such responsibilities to the
Committee as it determines is appropriate. The Administrator shall have full
authority to administer the Plan, including, without limitation, the authority
to: (i) determine the persons to whom options shall be granted, the number of
shares to be represented by each option and the exercise price per share, and
the other terms and conditions of options (provided they are consistent with
this Plan); and (ii) interpret and construe any provision of the Plan and
options granted under this Plan, and to adopt rules and regulations that it
deems useful or appropriate for administering the Plan. The Board may reserve to
itself any of the authority granted to the Committee and may perform and
discharge all of the functions and responsibilities of the Committee at any
time. A majority of the members of the Administrator shall constitute a quorum,
and the acts of a majority of the members present at any meeting at which a
quorum is present, and any acts approved in writing by all of the members
without a meeting, shall constitute acts of the Administrator.
2.2 Actions of the Administrator. All actions taken and all
interpretations and determinations made by the Administrator in good faith
(including determinations of value of Common Stock or other securities) shall be
final and binding upon all optionees, the Company and all other interested
persons. No member of the Administrator shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or any options granted under the Plan.
3. Eligibility. ISOs may be granted only to employees, including directors
and executive officers who are also employees of the Company or any "subsidiary
corporation" of the Company (as defined in the applicable provisions, currently
Section 424(f), of the Code) (an "Affiliate"). NSOs may be granted to persons
rendering services to the Company or any Affiliate including directors,
officers, and employees of the Company or any Affiliate; provided, however, no
director of the Company may receive an award of an NSO until six months after
the closing of the initial public offering of the Company's Common Stock.
4. Stock Subject to this Plan. Subject to the other provisions of this
Plan, the total number of shares of Common Stock with respect to which options
may be granted under this Plan is 1,825,000. Of this amount, up to 500,000
shares of Common Stock may be issued immediately upon exercise of ISOs, up to an
additional 412,500 shares of Common Stock may be issued upon exercise of ISOs
only after Warrant Event (defined below), up to 500,000 shares of Common Stock
may be issued immediately upon exercise of NSOs and up to an additional 412,500
shares of Common Stock may be issued upon exercise of NSOs only after Warrant
Event. As used herein, "Warrant Event" shall mean the exercise of not less than
75% of the maximum number of Class A Warrants of the Company at any time
outstanding or redemption of such Class A Warrants, whichever occurs first.
Shares delivered upon exercise of options may be previously unissued shares, or
treasury shares. All such delivered shares, whatever their source, shall be
counted against the 1,825,000 share limitation. Shares covered by options that
expire or terminate and shares issued under this Plan and later repurchased by
the Company pursuant to rights of first refusal or other repurchase rights shall
again become available for the grant of options and shall not be counted against
the 1,825,000 share limitation, except that repurchased shares shall not be
available for future grants of (i) ISOs or (ii) NSOs if such grant would cause
ISOs to no longer meet the requirements of Section 422 of the Code. The total
number of shares with respect to which options may be granted under the Plan is
subject to adjustment as provided in the Plan.
5. Grant of Options. The Company may grant options under this Plan at any
time and from time to time before the Plan terminates. The Administrator shall
specify the date of the grant. If the Administrator fails to specify a grant
date, the grant date shall be the date of the action taken by the Administrator
to grant the option. If an option is approved for a person who is not an
employee but is expected to become one, the grant date shall be the date the
intended optionee is first treated as an employee for payroll purposes. Each
option shall be clearly designated as either an NSO or as an ISO. Each option
shall be evidenced by a written stock option agreement. The failure by the
Company or the optionee to execute an option agreement shall not invalidate the
grant of the option. No option shall be exercisable, however, until the written
option agreement and all other documentation required by the Administrator is
appropriately executed and delivered.
6. Restrictions on Shares. Shares purchased under the Plan may be subject
to transfer restrictions, including rights of first refusal or other repurchase
rights, to restrictions on voting and to other restrictions, in each case as
determined by the Administrator.
7. Terms and Conditions to which all Options are Subject. All options
granted under this Plan shall be subject to the following terms and conditions
and any other terms and conditions, not inconsistent with this Plan, that the
Administrator may impose:
7.1 Time of Option Exercise. Except as necessary to satisfy the
requirements of Section 422 of the Code with respect to ISOs, and subject to the
other provisions of this Plan, an option shall be exercisable at such times and
in such amounts as are specified in the option agreement. The Administrator, in
its sole discretion, may later accelerate or otherwise waive any limitations
regarding the time at which an option or portions of an option first become
exercisable.
7.2 Manner of Exercise. An optionee must exercise an option by giving
written notice to the Company specifying the number of shares optionee has
elected to purchase, accompanied by payment of the exercise price and delivery
of such other documentation as the Administrator may require. The date by which
the Company receives a written exercise notice, all other documentation required
by the Administrator, payment of the exercise price and, if required, payment of
any federal, state, or local withholding or employment taxes, including FICA tax
required to be withheld by virtue of exercise of the option, shall be the date
of exercise of such optionee. Notwithstanding such exercise, optionees shall not
have any privileges as a stockholder with respect to any stock covered by an
option until the date of issuance of a stock certificate for the number of
shares being acquired.
7.3 Payment of Option Price and Withholding and Employment Taxes.
Except as provided in this Section 7.3, payment in full, in cash, shall be made
for all shares purchased and required tax amounts at the time written notice of
exercise of an option is given to the Company. When an option is granted, or at
any time thereafter, including at the time an option is exercised, the
Administrator, in its sole discretion, may authorize the optionee to make full
payment by delivering his full recourse promissory note for all or part of the
option price, and for all or part of the federal or state withholding tax
required to be paid in connection with the exercise of the option, payable on
such terms and bearing such interest rate as determined by the Administrator
(but in no event less than the minimum interest rate specified by federal tax
law at which no additional interest would be imputed), which promissory note may
be either secured or unsecured in such manner as the Administrator may approve
(including, without limitation, by a security interest in the shares of Common
Stock acquired with the promissory note).
7.4 Exercise After Termination of Employment. If, for any reason other
than disability (as determined in accordance with Section 422(c)(6) and Section
22(e)(3) of the Code) or death, an optionee ceases to be a director, an officer
or employee of the Company or any Affiliate, options granted under this Plan and
held by the optionee as of the date of termination, to the extent exercisable on
that date, may be exercised in whole or in part at any time within three months
after the termination date or such lesser period as is specified in the option
agreement (but in no event after the expiration date of the option). If an
optionee's termination is by reason of disability or death (determined as
described in the first sentence of this Section 7.4), then options held at the
date of termination, to the extent exercisable on that date, may be exercised in
whole or in part at any time within one year after the termination date or any
lesser period specified in the option agreement (but in no event after the
expiration date of the option) by the optionee or in the case of death, the
optionee's legal representative. A transfer of an optionee from the Company to
an Affiliate or vice versa, or from one Affiliate to another, or a leave of
absence duly authorized by the Company (but not exceeding 90 days unless
reemployment upon expiration of the leave is guaranteed by contract or statute),
shall not be deemed a termination of employment. However, if an optionee is
employed by an Affiliate and the Affiliate later ceases to be an Affiliate, for
purposes of this Section 7.4 that changed status shall be treated as a
termination of the optionee's employment even if the employee remains employed
by that former Affiliate.
7.5 Changes in Capital Structure. The existence of outstanding options
shall not affect the Company's right to effect adjustments, recapitalizations,
reorganizations, or other changes in its or any other entity's capital structure
or business, any merger or consolidation, any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting Common Stock, the
sale, dissolution or liquidation of the Company's or any other entity's assets
or business, or any other corporate act, whether similar to the events described
above or otherwise. Except as provided in this Plan, no adjustment shall be made
in the number of shares of Common Stock issuable to an optionee, or in any other
rights of the optionee, by reason of any dividend, distribution or other right
granted to any stockholder for which the record date is before the date the
optionee becomes a holder, as provided in Section 7.2 of this Plan, with respect
to the shares to which the right relates. Subject to Section 7.6 of this Plan,
if the outstanding shares of Common Stock are increased or decreased in number
or changed into or exchanged for a different number or kind of securities of the
Company or any other entity by reason of a recapitalization, reclassification,
stock split, combination of shares, stock dividend, or other event, the number
and kind of securities with respect to which options may be granted under this
Plan, the number and kind of securities as to which outstanding options may be
exercised, and the option price at which outstanding options may be exercised
may be adjusted in the sole discretion of the Administrator and without regard
to any resulting tax consequences to the optionee.
7.6 Acquisitions and Other Transactions. In connection with the
dissolution or liquidation of the Company, a merger or reorganization of the
Company in which more than 50% of the shares of the Company outstanding just
before the merger or reorganization are converted into cash or into another
security, or a similar event which the Administrator determines, in its sole
discretion, would materially alter the structure of the Company or its ownership
all options then outstanding under this Plan shall either be assumed or replaced
(with appropriate adjustments in the number and kind of securities and option
prices) by the surviving corporation or, if there be no surviving corporation or
if the surviving corporation refuses to assume the options or grant replacement
options, the Administrator, upon at least 10 days' prior written notice to the
optionee, may, in its sole discretion and subject to such conditions as it may
impose, do one or more of the following: (i) shorten the period during which the
options are exercisable (provided they remain exercisable, to the extent
otherwise exercisable, for at least 10 days after the date the notice is given);
(ii) accelerate any vesting schedule to which an option is subject; or (iii)
cancel options upon payment to the optionee in cash, with respect to each option
to the extent then exercisable, of an amount which, in the sole discretion of
the Administrator, is determined to be equivalent to the amount by which the
fair market value (at the effective time of the dissolution, liquidation,
merger, reorganization or other event) of the consideration that the optionee
would have received if the option had been exercised before the effective time
of the transaction, exceeds: (i) the exercise price of the option plus (ii)
applicable withholding tax, including wages and FICA withholding. The actions
described in this paragraph may be taken without regard to any resulting tax
consequences to the optionee.
7.7 Nonassignability of Option Rights. No option granted under this
Plan shall be assignable or otherwise transferable by the optionee except by
will or by the laws of descent and distribution. During the life of the
optionee, an option shall be exercisable only by the optionee. To the extent
permitted by the other provisions of this Plan, in the event of an optionee's
death, the option may be exercised by the appropriate representative of the
optionee's estate or, if no appropriate representative has been appointed, by
the person(s) who acquire(s) the right to exercise the option under the
optionee's will or under the applicable laws of descent and distribution.
7.8 Securities Laws; Legends. No option shall be granted or exercised
unless the Company determines that such grant or exercise complies with all
applicable securities laws. Regardless of whether the shares purchased under the
Plan have been registered under the Securities Act of 1933, as amended (the
"Act"), or registered or qualified under the securities laws of any state or
other jurisdiction, the Company may impose restrictions upon the sale, pledge or
other transfer of shares if the Company concludes that such restrictions are
necessary or desirable in order to achieve compliance with those or any other
laws. The Company may also place legends on stock certificates to assist
compliance with securities laws and to reflect and provide notice of any
restrictions on voting, transfer or other matters as contemplated by Section 6
of the Plan. The Company shall have no obligation to register or qualify any
options or shares under the Act or any applicable law, or to take any
affirmative action order to cause the grant of options under the Plan, the
issuance and sale of shares under the Plan, or the resale or other transfer of
those shares after issuance, to comply with any law.
8. Terms and Conditions to Which Only NSOs are Subject. Options granted
under this Plan which are designated as NSOs shall be subject to the following
additional terms and conditions:
8.1 Exercise Price. The exercise price of NSOs shall be determined by
the Administrator, NSOs on 500,000 shares of Common Stock may have option prices
established at the discretion of the Administrator without restriction. NSOs on
the 412,500 of Common Stock issuable only after a Warrant Event may not have an
option price less than 50% of the fair market value of such shares on the date
of grant.
8.2 Option Term. Unless an earlier expiration date is specified by the
Administrator at the time of grant, and subject to the provisions of Section
8.3, each NSO granted under this Plan shall expire ten years after the date of
its grant.
8.3 Special Blue Sky Restrictions. If required by any securities
authority as a condition of qualifying or registering the grant of options and
the offer and sale of Common Stock under this Plan, then, during the period when
such qualification or registration is in effect: (i) the exercise price of an
NSO granted to any person who owns, directly or indirectly (or is treated as
owning by reason of attribution rules under the Code), stock representing more
than 10% of the total combined voting power of all classes of the outstanding
stock of the Company or of any Affiliate (in either case, a "Ten Percent
Stockholder"), shall be 110% of the fair market value of the stock subject to
the option on the grant date; and (ii) an NSO granted to any Ten Percent
Stockholder shall expire no later than five years after the grant date.
9. Terms and Conditions to Which Only ISOs Are Subject. Options granted
under this Plan which are designated as ISOs shall be subject to the following
additional terms and conditions:
9.1 Exercise Price. The exercise price of ISOs shall be at least 100%
of the fair market value of the stock covered by the option at the time the
option is granted, except that the exercise price of an ISO granted to any Ten
Percent Stockholder shall be at least 110% of such fair market value.
9.2 Option Term. Unless an earlier expiration date is specified by the
Administrator at the time of grant, each ISO granted under this Plan shall
expire ten years after the date of its grant, except that an ISO granted to any
Ten Percent Stockholder shall expire no later than five years after the date of
its grant.
9.3 Disqualifying Dispositions. If stock acquired by exercise of an
ISO granted under this Plan is sold or otherwise disposed of within two years
after the date of grant of the option or within one year after the transfer of
the stock to the optionee, the holder of the stock immediately prior to the
disposition shall promptly notify the Company in writing of the date and terms
of the disposition and shall provide such other information regarding the
disposition as the Company may reasonably require in order to secure any
deduction then available against the Company's or any other corporation's
taxable income.
9.4 Limitation on ISO Exercise. ISOs granted to any one optionee under
this Plan and any and all other plans of the Company or its Affiliates may not
"vest" at a rate of more than $100,000 of stock (based on fair market value
measured on the grant date(s)) in any calendar year. For purposes of the
preceding sentence, an option "vests" when it becomes exercisable for the first
time. If, by their terms, such ISOs taken together would vest at a faster rate,
and unless otherwise provided by the Administrator, the vesting limitation shall
be implemented by deferring the exercisability of those options or portions of
options which have the highest per share exercise prices. The options or
portions of options, the exercisability of which is so deferred, shall become
exercisable on the first day of the first subsequent calendar year during which
they may be exercised, as determined by applying these same principles and all
other provisions of the Plan, including those relating to the expiration and
termination of options. Notwithstanding the rules for ISOs set forth in this
Section 9.4, with the optionee's consent, the Administrator may accelerate the
vesting of an ISO in a manner that exceeds the $100,000 limitation and thus
cause the ISO to become an NSO.
10. Determination of Value. For purposes of the Plan, the fair market value
of Common Stock or other securities shall be determined as follows:
(a) If the security is listed on any established stock exchange or a
national market system, including, without limitation, the National Market
System of the National Association of Securities Dealers Automated
Quotation System, its fair market value shall be the closing sales price
for such security or the closing bid if no sales were reported, as quoted
on such system or exchange (or the largest such exchange) for the date the
value is to be determined (or if there are no sales for such date, then for
the last preceding business day on which there were sales), as reported in
The Wall Street Journal or similar publication.
(b) If prices of the security are regularly quoted by a recognized
securities dealer but selling prices are not reported, its fair market
value shall be the mean between the high bid and low asked prices for the
stock on the date the value is to be determined (or if there are no quoted
prices for that date, then for the last preceding business day on which
there were quoted prices).
(c) In the absence of an established market for the security, the fair
market value shall be as determined in good faith by the Administrator.
11. Employment Relationship. Unless otherwise expressed in writing signed
by an authorized officer of the Company or an Affiliate, all employees of the
Company and its Affiliates are hired for an unspecified period of time and are
considered to be "at-will employees." Nothing in this Plan or any option granted
under this Plan shall confer upon any optionee the right to continue in the
employ of the Company or any Affiliate, nor shall the Plan or any option limit
or restrict in any way the right of the Company or of any Affiliate to discharge
the optionee at any time with or without cause.
12. Exchange Act. At the time it adopted the Plan, the Company did not have
a class of equity securities registered under Section 12 of the Exchange Act,
and its directors, officers and stockholders were not subject to Section 16 of
the Exchange Act. If the Company does so register, the Board may conclude that
amendments to this Plan, and the Administrator may conclude that new rules and
regulations, are appropriate, and may adopt and implement those amendments,
rules and regulations. By way of example and not of limitation, the composition
of the Committee may be changed so that the Administrator will consist only of
"disinterested persons" as defined in Rule 16b-3, and requirements relating to
the exercise of options after termination may be changed.
13. Financial Information. If required by any securities authority as a
condition of registration or qualification of the grant of options or the offer
and sale of shares of Common Stock under this Plan, then, during the period when
such registration or qualification is in effect, the Company shall provide to
each optionee a copy of the financial statements of the Company.
14. Stockholder Approval and Term. This Plan shall be subject to approval
by the holders of a majority of the outstanding voting stock of the Company
within 12 months after its adoption by the Board. Options may be granted, but
not exercised, before the stockholders approve this Plan. However, if the
stockholders fail to approve the Plan within the required time period, any
options granted under this Plan shall be canceled. This Plan shall terminate ten
years after adoption by the Board unless terminated earlier by the Board. The
Board may terminate this Plan at any time without stockholder approval. No
options shall be granted after termination of this Plan, but the fact of
termination itself shall not affect rights or obligations under then outstanding
options.
15. Amendment of This Plan. The Board may amend this Plan at any time.
Without the consent of the optionee, no amendment may adversely affect
outstanding options except to conform this Plan and ISOs granted under this Plan
to federal or other tax laws relating to ISOs. No amendment to either the Plan
or any option shall require stockholder approval unless stockholder approval is
required to preserve ISO treatment for tax purposes or the Board otherwise
concludes that stockholder approval is advisable in order to comply with the
provisions of Rule 16b-3 or for any other purpose.
Plan adopted by the Company's Board of Directors on __________________________.
Plan approved by the Company's stockholders on _______________________________.
<PAGE>
EXHIBIT C
1991 STOCK OPTION PLAN
NON-STATUTORY STOCK OPTION AGREEMENT
THIS IS A NON-STATUTORY STOCK OPTION AGREEMENT (the "Agreement") dated
September 5, 1996, between Hoenig Group Inc., a Delaware corporation (the
"Company"), and Fredric P. Sapirstein ("Optionee").
B A C K G R O U N D
Optionee is a person performing services for the Company including
directors, officers or employees of the Company or one of its Subsidiaries or
Affiliates. Under the Company's 1991 Stock Option Plan (the "Plan"), a copy of
which is attached to this Agreement as Exhibit A, the Company has granted to
Optionee a non-statutory stock option (the "NSO") to purchase shares of the
Company's common stock ("Common Stock"). Certain information about the NSO is
set forth on the "Summary Information Sheet" included as part of this Agreement.
This Agreement is intended to formally describe and record other terms and
conditions of the grant. Capitalized terms used but not defined in this
Agreement have the meanings given them in the Plan.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Grant of Option. The Company has granted to Optionee a NSO to purchase
up to the number of shares of Common Stock specified on the Summary Information
Sheet, on the terms and conditions set forth in this Agreement and in the Plan.
2. Exercise Price. The exercise price for the purchase of the shares of
Common Stock covered by this NSO is the price specified on the Summary
Information Sheet.
3. Term. The date of grant of the NSO (the "Grant Date") is the date
identified as such on the Summary Information Sheet. The NSO shall expire and
terminate on the dates identified as such on the Summary Information Sheet, or
as otherwise provided in the Plan.
4. Adjustment of NSOs. The Company may adjust the number and kind of shares
covered by, and the exercise price of, the NSO, in certain circumstances as
described in the Plan.
5. Exercise of NSOs.
5.1 Vesting and Time of Exercise. The NSO shall be exercisable at the
times, and with respect to the number of shares of Common Stock, set forth on
the Summary Information Sheet. Exercisability of the NSO may also be accelerated
or adjusted as provided in the Plan
5.2 Exercise After Termination of Employment. The NSO may be exercised
after termination of employment only in accordance with the provisions of the
Plan.
5.3 Manner of Exercise. Optionee may exercise the NSO, or any portion
of the NSO, by giving written notice to the Company (to the attention of the
Chief Financial Officer or other person later designated by the Company),
accompanied by payment of the exercise price and applicable federal, state and
local withholding or employment taxes and by delivery of such other
documentation as the Administrator may require at the time. That documentation
will include a stock purchase agreement (the "Stock Purchase Agreement"),
substantially in the form attached to this Agreement as Exhibit B. Within 30
days following receipt of payment and the required documentation, the Company
will deliver a certificate or certificates for the requisite number of shares
(the "Purchased Shares").
5.4 Payment. Except as provided on the Summary Information Sheet, or
as permitted by the Administrator when the NSO is exercised, payment in full, in
cash, shall be made for all shares purchased at the time written notice of
exercise of the NSO is given to the Company.
5.5 Tax Withholding. At the time of any exercise of the NSO (or at
such later time as the obligation arises or as the amount of the obligation
becomes determinable), Optionee shall pay to the Company, in cash (except as
provided in the Summary Information Sheet or as permitted by the Administrator
in its sole discretion when the NSO is exercised), all applicable federal,
state, and local withholding and employment taxes required to be withheld
resulting from exercise of the NSO.
6. Nonassignability of NSO. The NSO is not assignable or transferable
by Optionee except by will or by the laws of descent and distribution. During
the life of Optionee, the NSO is exercisable only by the Optionee. Any attempt
to assign, pledge, transfer, hypothecate or otherwise dispose of this NSO in a
manner not permitted, and any levy of execution, attachment or similar process
on this NSO, shall be null and void. Optionee is acquiring the NSO and, if
Optionee exercises the NSO, will acquire the shares covered by the NSO, for
Optionee's own account and not with a view to or for sale in connection with any
distribution of those securities.
7. Related Documentation. Optionee acknowledges and understands that
the NSO is granted under the Plan, and that it is subject to the provisions of
the Plan, whether or not those provisions, or the subjects of those provisions,
are specifically identified or referred to in this Agreement. In addition,
Optionee acknowledges that: (i) the Company is conditioning the exercise of the
NSO upon Optionee's entering into the Stock Purchase Agreement, the Pledge
Agreement (if Administrator approves use of a Note) and the other documentation
required by the Administrator; (ii) those agreements impose restrictions on the
transfer of the Purchased Shares and require Optionee to make representations
and warranties to the Company; and (iii) the shares acquired upon exercise of
the NSO will not be registered under, and will be "restricted securities" within
the meaning of Rule 144 under the Securities Exchange Act, and therefore subject
to additional limitations on transfer.
8. Employment Relationship. Optionee agrees that (i) unless otherwise
expressed in a writing signed by the Chairman of the Board of the Company, all
employees of the Company and its Subsidiaries and Affiliates, including
Optionee, are hired for an unspecified period of time and are considered to be
"at-will employees," and (ii) nothing in the Plan or this Agreement confers upon
Optionee the right to continue in the employ of the Company or any of its
Subsidiaries or Affiliates (as defined in the Plan), nor shall it limit or
restrict in any way the right of the Company or any of its Subsidiaries or
Affiliates to discharge Optionee at any time for any reason whatsoever, with or
without cause.
9. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives and
successors of the parties; provided, however, that Optionee may not assign any
of Optionee's rights, or delegate any of Optionee's duties, under this
Agreement. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York. The parties agree that the
exclusive jurisdiction and venue of any action with respect to this Agreement
shall be in the Superior Court of New York for the County of New York or the
United States District Court for the Southern District of New York. Each of the
parties submits to the exclusive jurisdiction and venue of those courts for the
purpose of such an action. The parties agree that service of process in any such
action may be effected in the manner provided in this Agreement for delivery of
notices. The exhibits attached to this Agreement, including, without limitation,
the Plan and the Summary Information Sheet, are incorporated into and form a
part of this Agreement. This Agreement, together with the Plan and the Summary
Information Sheet, contain all of the terms and conditions agreed upon by the
parties relating to its subject matter, represents the final, complete and
exclusive statement of the parties, and supersedes any and all prior or
contemporaneous agreements, negotiations, correspondence, understandings and
communications of the parties whether oral or written, respecting that subject
matter. This Agreement may be signed in counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
agreement.
10. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given on the day delivered personally or
by telex or, on the second business day following the day on which mailed by
registered or certified mail (return receipt requested), postage prepaid, to
Optionee at Optionee's employer or residence as reflected in the records of the
Company, and to the Company at the following address:
Royal Executive Park
4 International Drive
Rye Brook, NY 10573
Attention: Chief Financial Officer
<PAGE>
SUMMARY INFORMATION SHEET
1991 STOCK OPTION PLAN
Name and address of Optionee: Fredric P. Sapirstein
150 Central Park South
New York, NY 10019
Social Security No.: ###-##-####
Grant Date: September 5, 1996
Type of Option: Non-Statutory Stock Option
Number of Shares: 382,500
Exercise price per share: $3.625
Aggregate exercise price: $1,386,562.50
Expiration date: September 4, 2006
Permitted manner of
paying exercise price: The aggregate exercise price of the shares
purchased (including withholding taxes) must
be paid in cash unless agreed upon by the
Administrator.
Vesting period: 25% immediately; additional 25% on each of
September 5, 1997, 1998 and 1999. The terms
of Section 10 of the Company's 1994 Stock
Option Plan containing change in control
provisions are incorporated herein as if
fully set forth herein and shall apply to the
NSO. This Option shall be fully vested in the
event of termination of Optionee's employment
after September 5, 1997 by the Company other
than for Cause or by the Optionee with Good
Reason, all as provided in Section 3(c)(3) of
the Employment Agreement between the Company
and the Optionee dated September 5, 1996. All
options shall terminate immediately, whether
or not vested, on the date the Employment
Agreement between the Company and the
Optionee dated September 5, 1996 is
terminated for "Cause".
<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement
as of the date set forth in its first paragraph.
HOENIG GROUP INC.
By: /s/ Alan B. Herzog
-------------------
Title: Chief Operating Officer
OPTIONEE
/s/ Fredric P. Sapirstein
-------------------------
Fredric P. Sapirstein
<PAGE>
EXHIBIT D
HOENIG GROUP INC.
1994 STOCK OPTION PLAN
Section 1. Definitions.
For purposes of this Plan, the following terms have the meanings set forth
below:
"Board of Directors" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Commission" means the Securities and Exchange Commission.
"Committee" means the Compensation Committee of the Board of Directors or other
committee established by the Board of Directors from time to time to administer
this Plan.
"Common Stock" means the shares of common stock, $.01 par value per share, of
the Company.
"Company" means Hoenig Group Inc., a Delaware corporation, and any successor
organization; provided that unless otherwise provided in this Plan, all
references in this Plan to employment by the Company shall include employment by
any subsidiary of the Company.
"Covered Employee" means a person defined as a "covered employee" in Section
162(m)(3) of the Code.
"Director Option" means a Non-Qualified Stock Option granted pursuant to Section
8 of this Plan.
"Disability" means, with respect to any Optionee, such Optionee's inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last or a continuous period of
not less than 12 months, or any successor definition of the term "permanent and
total disability" under Section 22(e)(3) of the Code.
"Disinterested Person" means a director of the Company satisfying the
requirements of Section 162(m)(4)(C)(i) of the Code and Rule 16b-3(c)(2)(i)
under the Exchange Act, provided that, as provided in Proposed Treasury
Regulation ss.1.162-27(h)(2), until the first annual meeting of the Company's
stockholders occurring after July 1, 1994, "Disinterested Person" shall mean a
person satisfying the requirements of Rule 16b-3(c)(2)(i) under the Exchange Act
without regard to Section 162(m)(4)(i) of the Code.
"Exchange Act" means the Securities exchange Act of 1934, as amended.
"Fair Market Value", with respect to the Shares on any date, means (i) in the
case of U.S. Stock Options and the Shares underlying such U.S. Stock Options,
(a) if the Shares are listed on a securities exchange or are traded over the
NASDAQ National Market System, the closing sales price of the Shares on such
exchange or over such system on such date or, in the absence of reported sales
on such date, the closing sales price on the immediately preceding date on which
sales were reported, or (b) if the Shares are not listed on a securities
exchange or traded over the NASDAQ National Market System, the mean between the
bid and offered prices of the Shares as quoted by the National Association of
Securities Dealers through NASDAQ for such date, provided that, if the Committee
determines that the fair market value of the Shares is not properly reflected by
such NASDAQ quotations, the "Fair Market Value" of the Shares will mean their
fair market value as determined by such other method as the Committee determines
in good faith to be reasonable; and (ii) in the case of U.K. Stock Options and
the Shares underlying such U.K. Stock Options, "Fair Market Value" as determined
in accordance with the foregoing clause (i) of this definition, or as agreed
from time to time with the Inland Revenue, if different.
"Incentive Stock Option" means any Stock Option intended to be and designated as
an "Incentive Stock Option" within the meaning of Section 422 of the Code.
"Inland Revenue" means the Board of the Inland Revenue of the United Kingdom of
Great Britain and Northern Ireland.
"Insider" means an Optionee who is an officer, director or beneficial owner of
10% or more of a class of the Company's equity securities as such terms
"officer", "director" and "beneficial owner" are defined in the Section 16 Rules
"Material Change" has the meaning specified in Section 3(c) of this Plan.
"Non-Qualified Stock Option" means any Stock Option that is not an Incentive
Stock Option.
"Optionee" means a person to whom a Stock Option is granted pursuant to this
Plan.
"Plan" means the Hoenig Group Inc. 1994 Stock Option Plan, as amended from time
to time.
"Section 16 Rules" means Section 16 of the Exchange Act and the Rules and
Regulations of the Commission promulgated thereunder, as in effect from time to
time.
"Securities Broker" means the registered securities broker acceptable to the
Committee who agrees to effect the cashless exercise of a Stock Option pursuant
to Section 6(j) of this Plan.
"Shares" means shares of Common Stock, or such other securities as may from time
to time be substituted for the Common Stock in accordance with Section 3 of this
Plan.
"Stock Option" means any option to purchase Shares granted pursuant to this
Plan.
"Stock Option Agreement" means a written agreement in the form or forms approved
from time to time by the Committee evidencing the grant to and acceptance by an
Optionee of a Stock Option.
"Ten Percent Stockholder" means, as of the date of grant of any Stock Option,
any Optionee who owns, directly or indirectly (or is treated as owning by reason
of attribution rules under the Code, including Section 422(c) thereof, stock
representing more than 10% of the total combined voting power of all classes of
the outstanding stock of the Company or of any parent or subsidiary thereof.
"U. K. Stock Option" means a Stock Option granted to an Optionee which is
subject to the provisions of Section 9 of this Plan.
"U.S. Stock Option" means a Stock Option other than a U.K. Stock Option.
Section 2. Purpose.
This Plan is intended to promote the interests of the Company and its
subsidiaries and to enable the Company to (a) attract, retain and motivate
directors, officers and employees of the Company of particular merit by
providing to such persons an additional incentive and by encouraging stock
ownership by such persons, thereby creating a mutuality of interest with other
stockholders and increasing such persons' proprietary interest in the success of
the Company and its subsidiaries and (b) with respect to Non-Qualified Stock
Options, grant such Stock Options to persons who render services to the Company,
including, without limitation, directors, officers and employees.
Section 3. Shares Subject to Plan.
(a) Maximum Number. The maximum number of shares of Common Stock which may
be subject to Stock Options under this Plan is 1,000,000 shares. Such shares of
Common Stock may be either authorized and unissued shares of Common Stock,
treasury shares or issued shares of Common Stock which have been acquired by the
Company. In addition, any Shares related to the unexercised or undistributed
portion of any terminated, expired or forfeited Stock Options will be available
for distribution in connection with future Stock Options. No Optionee shall be
granted Stock Options with respect to more than 250,000 shares of Common Stock
during any calendar year, including Stock Options that have been cancelled,
repriced, terminated, forfeited or have expired.
(b) Certain Adjustments. The existence of outstanding Stock Options under
this Plan shall not affect the Company's right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any other entity's
capital structure or business, any merger or consolidation, any issuance of
bonds, debentures, preferred or prior preference stock ahead of or affecting the
Shares, the sale, dissolution or liquidation of the Company's or any other
entity's assets or business, or any other corporate act, whether similar to the
events described above or otherwise. Except as provided in this Plan, no
adjustment shall be made in the number of Shares issuable to an Optionee, or in
any other rights of an Optionee, by reason of any dividend, distribution or
other right granted to any stockholder for which the record date is before the
date the Optionee becomes a stockholder pursuant to a Stock Option with respect
to the Shares to which the Stock Option relates. Subject to Section 3(c) of this
Plan, if the outstanding shares of Common Stock (or other Shares) are increased
or decreased in number or changed into or exchanged for a different number or
kind of securities of the Company or any other entity by reason of a
recapitalization, reclassification, stock split, combination of shares, stock
dividend or other event, the number and kind of securities with respect to which
Stock Options may be granted under this Plan, the number and kind of securities
as to which outstanding Stock Options may be exercised, and the exercise price
at which outstanding Stock Options may be exercised may be adjusted in the sole
discretion of the Committee and without regard to any resulting tax, or other,
consequences to any Optionee.
(c) Material Changes. In the event of (i) the dissolution or liquidation of
the Company, (ii) a merger or reorganization of the Company in which more than
50% of the Shares outstanding immediately prior to the merger or reorganization
are converted into cash or into another security, or (iii) a similar event
involving a change in, or with respect to, the Shares outstanding immediately
prior to such event which the Committee determines, in its sole discretion,
would materially alter the structure of the Company or its ownership, (any such
event specified in clauses (i), (ii) or (iii) of this Section 3(c), a "Material
Change") then, unless the Committee shall otherwise determine in its sole
discretion, all Stock Options then outstanding under this Plan shall either be
assumed or replaced (with appropriate adjustments in the number and kind of
securities and exercise prices) by the surviving corporation or, if there be no
surviving corporation or if the surviving corporation refuses to assume the
Stock Options or grant replacement stock options, the Committee, upon at least
10 days' prior written notice to Optionees, may, in its sole discretion and
subject to such conditions as it may impose, do one or more of the following:
(x) shorten the period during which any Stock Options are exercisable (provided
they remain exercisable, to the extent otherwise exercisable, for at least 10
days after the date the notice is given); (xi) accelerate any vesting schedule
to which any Stock Options are subject; or (xii) cancel any Stock Options upon
payment to the Optionees in cash, with respect to each Stock Option to the
extent then exercisable, of an amount which, in the sole discretion of the
Committee, is determined to be equivalent to the amount by which the Fair Market
Value (at the effective time of the Material Change) of the Shares that the
Optionee would have received if such cancelled Stock Option had been exercised
before the effective time of the Material Change, exceeds the exercise price of
such Stock Option; provided that with respect to U.K. Stock Options, in the
event that a Material Change occurs and a surviving corporation does not assume
all outstanding U.K. Stock Options, all such outstanding U.K. Stock Options
shall continue to be exercisable for a period of 6 months after the date the
Material Change occurs, as determined by the Committee. Any payment made
pursuant to the foregoing clause (xii) of this Section 3(c) shall be net of
applicable withholding taxes, including wage and FICA withholding. The actions
described in this Section 3(c) may be taken without regard to any resulting tax,
or other, consequences to any Optionee. With respect to the written notice
required by this Section 3(c), such notice shall be deemed given to any Optionee
when and if it is personally delivered, sent by electronic facsimile
transmission or deposited in the mails, postage prepaid and addressed to the
last address of such Optionee as shown in the Company's records.
Section 4. Administration.
(a) The Committee. This Plan will be administered and interpreted by the
Committee, which will be comprised solely of two or more Disinterested Persons
who will be appointed by the Board of Directors and who will serve at the
pleasure of the Board. All interpretations of this Plan (and the application
thereof to any set of facts) by the Committee shall be final and binding on all
persons including, without limitation, the Company and any Optionee. Without
limiting the general authority of the Committee to administer and interpret this
Plan the Committee will have the exclusive authority to:
(i) select the persons who may be Optionees;
(ii) determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, U.K. Stock Options, or any combination thereof, are
to be granted under this Plan;
(iii) grant Stock Options under this Plan;
(iv) determine the number of Shares to be covered by each such Stock Option
granted under this Plan;
(v) determine the terms and conditions, not inconsistent with the terms of
this Plan, of any Stock Option granted hereunder, including, but not limited to,
the exercise price and any restriction or limitation, or any vesting
acceleration or forfeiture waiver regarding any Stock Option and/or the Shares
relating thereto, based on such factors as the Committee determines in its sole
discretion:
(vi) determine whether and under what circumstances a Stock Option may be
exercised without a payment of cash;
(vii) determine whether, to what extent and under what circumstances Shares
and other amounts payable with respect to a Stock Option under this Plan will be
deferred either automatically or at the election of the Optionee; and
(viii) determine what consideration, if any, shall be paid to the Company
by an Optionee in exchange for any Stock Option granted to such Optionee. The
Committee shall make all of the foregoing determinations, in its sole discretion
and need not make them in a uniform manner or consider their effect on any
Optionee.
(b) Rules. The Committee, in its sole discretion, has the authority to
adopt, alter and repeal such administrative rules, guidelines and practices
governing this Plan from time to time as it deems advisable, to interpret the
terms and provisions of this Plan and any Stock Option issued under this Plan
(and any agreements relating thereto) and otherwise to supervise the
administration of this Plan. All decisions made by the Committee pursuant to the
provisions of this Plan will be final and binding on all persons, including the
Company and Optionees.
Section 5. Optionees.
(a) Eligibility. Officers and all other employees of the Company and its
subsidiaries (including employees who are directors but excluding members of the
Committee and any person who serves only as a director) are eligible to be
granted Stock Options of any kind under this Plan. If a Stock Option is approved
for a person who is not an employee but is expected to become one, the grant
date with respect to such Stock Option shall be the date the intended Optionee
is first treated as an employee for payroll purposes; provided that the
foregoing shall not restrict the Committee's ability to grant Non-Qualified
Stock Options to persons who are not, and will not be, employees. Each U.S.
Stock Option shall be clearly designated as either a Non-Qualified Stock Option
or as an Incentive Stock Option.
(b) Committee Members. Members of the Committee are only eligible to be
granted Director Options under Section 8 of this Plan and shall not be granted
any other Stock Options under this Plan. Persons who are directors of the
Company and not otherwise employed by the Company are only eligible to be
granted Non-Qualified Stock Options, including Director Options.
(c) Non-Qualified Stock Options. Non-Qualified Stock Options may be granted
to persons rendering services to the Company or any subsidiary, including,
without limitation, directors, officers and employees thereof.
(d) Employment of Directors. All references in this Plan to employment by
the Company or its subsidiaries shall, with respect to directors of the Company
who are not otherwise employed by the Company, be construed to mean holding the
position of director of the Company.
Section 6. Stock Options.
(a) Stock Option Agreements. Each Stock Option granted under this Plan will
be evidenced by a Stock Option Agreement; provided that the failure by the
Company or an Optionee to execute a Stock Option Agreement shall not affect the
validity of the Stock Option intended to be evidenced thereby but no Stock
Option may be exercised until the related Stock Option Agreement and all other
documentation required by the Committee is duly executed and delivered. Stock
Options may be granted alone, in addition to or in tandem with other awards
granted under any employee benefit plan. Any Stock Option granted under this
Plan and the related Stock Option Agreement will be in such form as the
Committee from time to time approves.
(b) Types of Stock Options. Stock Options granted under this Plan may be
Incentive Stock Options, Non-Qualified Stock Options, or U.K. Stock Options.
(c) Eligible Optionees. Subject to the other provisions of this Plan, the
Committee has the authority to grant any eligible Optionee Incentive Stock
Options, Non-Qualified Stock Options, U.K. Stock Options, or any combination
thereof. To the extent that any U.S. Stock Option, or part thereof, does not
qualify as an Incentive Stock Option, it will constitute a separate
Non-Qualified Stock Option.
(d) Incentive Stock Options. Anything in this Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options will
be interpreted, amended or altered, nor will any discretion or authority granted
under this Plan be exercised, so as to disqualify this Plan under Section 422 of
the Code, or, except to the extent required by law (including as required to
secure or preserve any desired status for this Plan under the Code and/or the
Section 16 Rules) without the consent of the Optionee(s) affected, to disqualify
any Incentive Stock Option under such Section 422.
(e) Terms. Except as otherwise provided in Section 8 of this Plan with
respect to Director Options, or Section 9 of this Plan with respect to U.K.
Stock Options, Stock Options granted under this Plan will be subject to the
following terms and conditions and will contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee, in
its sole discretion, deems appropriate:
(i) The exercise price per Share of Shares purchasable under a Stock Option
will be determined by the Committee at the time of grant and set forth in the
Stock Option Agreement but, in the case of Incentive Stock Options, will be not
less than 100% of the Fair Market Value of the Shares on the date the Stock
Option is granted. However, any Incentive Stock Option granted to an Optionee
who, at the time the Stock Option is granted, is a Ten Percent Stockholder, will
have an exercise price not less than 110% of Fair Market Value per Share on the
date of the grant.
(ii) The term during which each Stock Option will be exercisable will be
fixed by the Committee at the time of grant and set forth in the Stock Option
Agreement, but no Stock Option will be exercisable more than ten years after the
date the Stock Option is granted. However, any Incentive Stock Options granted
to any Optionee who, at the time the Stock Option is granted, is a Ten Percent
Stockholder, may not have a term of more than five years. No Stock Option may be
exercised by any person after expiration of the term of the Stock Option.
(iii) Stock Options will be exercisable at such time or times and subject
to such terms and conditions as the Committee, in its sole discretion,
determines. If the Committee provides that any Stock Option is exercisable only
in installments, the Committee may waive such installment exercise provisions at
any time after grant in whole or in part, based on such factors as the Committee
determines, in its sole discretion.
(iv) Subject to whatever limitations apply under Section 6(e)(iii) of this
Plan, a Stock Option may be exercised in whole or in part at any time and from
time to time during the term of such Stock Option, by giving written notice of
exercise to the Company specifying the number of Shares to be purchased and
furnishing the Company with such other documentation as the Committee may
require.
Except as otherwise provided in this Section 6(e)(iv) or Section 6(e)(x) of
this Plan, such notice of exercise must be accompanied by (A) payment in full of
the exercise price of the Stock Option to be exercised, either by certified or
bank check, or such other instrument as the Committee may accept, (B) such other
documentation as the Committee may require, and (C) any applicable taxes due and
owing as a result of such exercise. The obligations of the Company under this
Plan are conditioned on such payment of such taxes and the Company will, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee.
The date by which the Company receives a written exercise notice, all other
documentation required by the Committee, payment of the exercise price and, if
required, payment of any federal, state, local or foreign withholding or
employment taxes, including FICA tax, required to be withheld by virtue of
exercise of the Stock Option, shall be the date of exercise of such Stock
Option. Notwithstanding such exercise, an Optionee shall not have any privileges
as a stockholder with respect to any Shares covered by a Stock Option until the
date of issuance of a stock certificate for the number of Shares being acquired.
Except as provided in this Section 6(e)(iv) or Section 6(e)(x) of this
Plan, payment in full, in cash, shall be made for all Shares purchased and
required tax amounts at the time written notice of exercise of a Stock Option is
given to the Company. When a U.S. Stock Option is granted, or at any time
thereafter, including at the time a Stock Option is exercised, the Committee, in
its sole discretion, may authorize the Optionee to make payment of the exercise
price, in whole or in part, by delivering (A) Shares, such Shares to be valued
at their Fair Market Value on the date preceding the date of delivery; (B) the
Optionee's full recourse promissory note payable on such terms and bearing such
interest rate as determined by the Committee (but in no event less than the
minimum interest rate specified by applicable tax law at which no additional
interest would be imputed), which promissory note may be either secured or
unsecured in such manner as the Committee may approve (including, without
limitation, by a security interest in the Shares acquired with the promissory
note); or (C) any combination of the foregoing and/or cash or certified or bank
check.
(v) No Stock Option may be assigned or transferred other than by will or by
the laws of descent and distribution. During the life of an Optionee, all rights
granted to such Optionee under this Plan may be exercised only by the Optionee
(or, in the event of his Disability, by the Optionee's guardian or legal
representative).
(vi) If an Optionee's employment by the Company terminates by reason of
death, any Stock Option held by such Optionee may thereafter be exercised, to
the extent then exercisable or on such accelerated basis as the Committee may
determine, by the legal representative of the estate or by the legatee of the
Optionee under the will of the Optionee, for a period of twelve months (or such
shorter period as the Committee may specify at grant as set forth in the Stock
Option Agreement) from the date of such death or until the expiration of the
term of such Stock Option, whichever period is less.
(vii) If an Optionee's employment by the Company terminates by reason of
Disability, any Stock Option held by such Optionee may thereafter be exercised
by the Optionee, to the extent it was exercisable at the time of termination, or
on such accelerated basis as the Committee may determine, for a period of twelve
months (or such shorter period as the Committee may specify at grant as set
forth in the Stock Option Agreement) from the date of such termination of
employment or until the expiration of the term of such Stock Option, whichever
period is less, provided that, if the Optionee dies within such twelve month
period (or such shorter period as the Committee specifies), any unexercised
Stock Option held by such Optionee will thereafter be exercisable to the extent
to which it was exercisable at the time of death for a period of twelve months
from the date of such death or until the expiration of the stated term of such
Stock Option, whichever period is less. In the event of termination of
employment by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, such Stock Option thereafter will be treated as a Non-Qualified
Stock Option.
(viii) If an Optionee's employment by the Company terminates for any reason
other than death or Disability, any Stock Option held by such Optionee will
thereupon terminate, except that, unless otherwise determined by the Committee,
in its sole discretion, at grant as set forth in the Stock Option Agreement,
such Stock Option shall continue to be exercisable (to the extent it was
exercisable at the time of termination or on such accelerated basis as the
Committee may determine) for the lesser of three months from the date of such
termination or the balance of the stated term of such Stock Option. A transfer
of an Optionee from the Company to a subsidiary thereof or vice versa, or from
one subsidiary to another, or a leave of absence duly authorized by the Company
(but not exceeding 90 days unless re-employment upon expiration of the leave is
guaranteed by contract or statue), shall not be deemed a termination of
employment for the purposes of this Plan. However, if an Optionee is employed by
a subsidiary of the Company and such employer later ceases to be a subsidiary of
the Company, for purposes of this Plan such changed status shall be treated as a
termination of the Optionee's employment even if the Optionee remains employed
by such former subsidiary of the Company.
(ix) To the extent required for "incentive stock option" status under
Section 422 of the Code, the aggregate Fair Market Value (determined as of the
time of grant) of Shares with respect to which Incentive Stock Options granted
are exercisable for the first time by any Optionee during any calendar year
under this Plan and/or any other stock option plan of the Company (within the
meaning of Section 424 of the Code) may not exceed $100,000.
(x) To the extent permitted under applicable laws and regulations, at the
request of an Optionee and with the consent of the Committee (which consent may
be given or withheld in the Committee's sole discretion), the Company will
cooperate in a "cashless exercise" of a Stock Option. A cashless exercise may be
effected by the Optionee's delivering to the Securities Broker instructions to
sell a sufficient number of unrestricted Shares to cover the exercise price and
other costs and expenses associated with the exercise of such Stock Option. The
Committee, in its sole discretion, may permit an Optionee to pay any applicable
withholding taxes by delivering a sufficient number of previously-owned Shares
to the Company to satisfy such taxes or upon the Optionee's request, by having
the Company withhold the number of Shares obtainable on the exercise of a Stock
Option which when valued at Fair Market Value (determined as of the day
preceding the date of exercise) is equivalent to the minimum required
withholding taxes due.
(f) Restrictions on Shares. Shares purchased upon the exercise of U.S.
Stock Options may be subject to voting restrictions, transfer restrictions,
including rights of first refusal or other repurchase rights, and other
restrictions, in each case as determined by the Committee, in its sole
discretion.
(g) Securities Laws; Legends. No Stock Option may be granted or exercised
unless the Company determines that such grant or exercise complies with all
applicable laws. Regardless of whether any Shares purchased pursuant to a Stock
Option have been registered under the Securities Act of 1933, as amended (the
"Act"), or registered or qualified under the securities laws of any state or
other jurisdiction, the Company may impose restrictions upon the sale, pledge or
other transfer of Shares if the Company concludes that such restrictions are
necessary or desirable in order to achieve compliance with those or any other
laws. The Company may also place legends on stock certificates delivered upon
exercise of Stock Options to assist compliance with securities laws and to
reflect and provide notice of any restrictions on voting, transfer or other
matters as contemplated by Section 6(f) of this Plan. The Company shall have no
obligation to register or qualify any Stock Options or Shares under the Act or
any applicable law, or to take any affirmative action in order to cause the
grant of Stock Options under this Plan, the issuance and sale of Shares under
this Plan, or the resale or other transfer of those Shares after issuance to
comply with any law.
Section 7. Terms and Conditions to which Only Non-Qualified Stock Options
are Subject.
In addition to the applicable provisions of Section 6 of this Plan, Stock
Options granted under this Plan which are designated as Non-Qualified Stock
Options shall also be subject to the following terms and conditions:
(a) Exercise Price. The exercise price of Non-Qualified Stock Options shall
be determined by the Committee.
(b) Option Term. Unless an earlier expiration date is specified by the
Committee, and subject to the provisions of Section 6(e)(iii) and Section 8 of
this Plan, each Non-Qualified Stock Option granted under this Plan shall expire
ten years after the date of its grant.
(c) Special Blue Sky Restrictions. If required by any securities authority
as a condition of qualifying or registering the grant of Stock Options and the
offer and sale of Shares under this Plan, then, during the period when such
qualification or registration is in effect: (A) the exercise price of a
Non-Qualified Stock Option granted to a Ten Percent Stockholder shall be 110% of
the Fair Market Value of the Shares subject to the Stock Option on the grant
date; and (B) a Non-Qualified Stock Option granted to any Ten Percent
Stockholder shall expire no later than five years after the grant date.
Section 8. Special Provisions with Respect to Stock Options Granted to
Directors.
(a) Director Options. In order to compensate the directors of the Company
for their service as such directors, each person serving as a director of the
Company and who is not otherwise employed by the Company or any of its
subsidiaries as of the last day of any fiscal year of the Company and who was
such a director for not less than six months during such fiscal year, shall
automatically be granted as of such last day of such fiscal year a Non-Qualified
Stock Option (a "Director Option") to purchase 2,000 Shares at an exercise price
per Share equal to the Fair Market Value of the Shares as of such date. Each
Director Option granted pursuant to this Section 8 shall have a term of five
years from its grant.
(b) Amendments. The provisions of this Section 8 and any other provisions
of this Plan which restrict the permitted terms of Stock Options which may be
granted to members of the Committee may not be amended more than once every six
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules thereunder.
Section 9. Special Provisions with Respect to U. K. Options.
(a) Eligible Optionees. A U.K. Stock Option may only be granted to a person
who is a natural person employed by the Company or a subsidiary thereof
(including employees who are also directors and including persons expected to
become employees, in which case such Stock Option shall be effective as of the
date such person is first treated as an employee for payroll purposes) and who
at the time of grant of the Stock Option is resident and ordinarily resident in
the United Kingdom for the purposes of the tax laws of the United Kingdom and is
required to devote not less than 20 hours (or, in the case of a person who is a
director, 25 hours) per week to duties to the Company and its subsidiaries. No
person who is, or will be, precluded from being an eligible employee or director
with respect to the Company and its subsidiaries by paragraph 8 of Schedule 9
Taxes Act 1988 shall be eligible to receive a U. K. Stock Option.
(b) Stock Option Agreement. Each U. K. Stock Option shall be clearly
designated as a U. K. Stock Option and shall be evidenced by a Stock Option
Agreement in such form as the Committee may determine from time to time, which
agreement shall not require consideration but shall be under seal.
(c) Shares. Shares purchased pursuant to the exercise of U. K. Stock
Options shall not be redeemable, shall be fully paid upon their issuance and
shall not be subject to any restriction other than those applicable to all other
Shares.
(d) Exercise Price. The exercise price of U.K. Stock Options shall be fixed
by the Committee but no U.K. Stock Option shall be granted with an exercise
price which is less than 100% of the Fair Market Value of the underlying Shares
at the time such U.K. Stock Option is granted.
(e) Term. No U.K. Stock Option shall be exercisable more than 10 years
after it is granted.
(f) Allotment. Within 30 days of the date of exercise of any U.K. Stock
Option, Shares shall be allotted to the Optionee or Shares shall be delivered to
the Optionee, as the case may be. The allotment or delivery of Shares shall be
evidenced by the issuance of a stock certificate within 30 days of the date of
exercise of such U.K. Stock Option. If an Optionee with respect to a U.K. Stock
Option exercises such Stock Option but does not elect to purchase Shares equal
to the full number of Shares evidenced by the Stock Option, the Company shall
automatically grant to such Optionee, within 30 days of the date of such
exercise, a further U.K. Stock Option entitling the Optionee to acquire Shares
on terms equivalent to the U.K. Stock Option so exercised but subject to the
limitation that the new U.K. Stock Option so granted will only be for a number
of Shares which, when aggregated with the Shares purchased pursuant to such
prior exercises, does not exceed the number of Shares covered by the partially
exercised U.K. Stock Option.
(g) Payments. For the avoidance of doubt, a payment with respect to the
exercise of a Stock Option in the form of a bank draft drawn on a bank
acceptable to the Committee for the full amounts due in the lawful currency of
the United States of America and including any charges for the collection of the
said bank draft shall be considered, at the sole discretion of the Committee, to
be cash.
(h) Certain Acquisitions. If any person (which shall include another
company) obtains more than 50% of the issued share capital of the Company as a
result of making:
(i) a general offer to acquire the whole of the issued share capital of the
Company which is made on a condition such that if it is satisfied the person
making the offer will have more than 50% of the issued share capital of the
Company; or
(ii) a general offer to acquire all of the shares in the Company,
then any U.K. Stock Options granted will be subject to the terms of Section 3(c)
of this Plan.
(i) Disqualifying Dispositions. If Shares acquired by exercise of a U.K.
Stock Option are sold or otherwise disposed of within two years after the date
of grant of the U.K. Stock Option or within one year after the transfer of such
Shares to the Optionee, the holder of the Shares immediately prior to the
disposition shall promptly notify the Company in writing of the date and terms
of the disposition and shall provide such other information regarding the
disposition as the Company may reasonably require in order to secure any
deduction then available against the Company's or any other corporation's
taxable income.
Any U.K. Stock Option granted to eligible employees or eligible directors
shall be limited and take effect so that the aggregate Fair Market Value of
Shares subject to such U.K. Stock Option, when aggregated with the Fair Market
Value of Shares subject to Stock Options previously granted (and which have not
been exercised) to that employee or director, shall not exceed the greater of
(i) (pound)100,000 or
(ii) four times the amount of the Eligible Employee's Relevant Emoluments
for the current or preceding Year of Assessment (whichever of those years gives
the greater amount) or, if there were no Relevant Emoluments for the preceding
Year of Assessment, four times the amount of the Relevant Emoluments for the
period of twelve months beginning with the first day during the current year of
Assessment in respect of which there are Relevant Emoluments. For this purpose
"Relevant Emoluments" shall be as defined in paragraph 28 Schedule 9 Taxes Act
1988 being emoluments as are liable to be paid under deduction of U.K. taxation.
(j) Fair Market Value. In the event that the lair Market Value of any
Shares with respect to which a U.K. Stock Option is granted cannot be determined
pursuant to the definition of "Fair Market Value" as set forth in this Plan,
then the proviso in such definition shall not apply unless such Fair Market
Value is agreed to by the Inland Revenue of the United Kingdom.
(k) Amendments. All amendments to this Plan with respect to U.K. Stock
Options which shall include, without limitation, any variations made by the
Company as provided for in Sections 3(b) and 3(c) and 9(h) shall be notified to
the Board of the Inland Revenue within 30 days of the amendments being made and
no amendments shall have effect until approved by the Inland Revenue.
Section 10. Change in Control Provisions.
(a) Vesting. Notwithstanding anything to the contrary contained in this
Plan, if it is determined by the Committee, in its sole discretion, at the time
that any Stock Option is granted as reflected in the Stock Option Agreement,
that the terms of this Section 10 are to apply to such Stock Option, then, upon
the occurrence of a Change of Control (as defined below) such Stock Option if
not previously exercisable and vested will become fully vested and exercisable
and will continue to be exercisable for the balance of its stated tern or such
lesser period as may be specified in the Stock Option Agreement.
(b) Definition. A Change of Control will occur:
(i) on the date of the acquisition by any "person" (within the meaning of
Sections 13(d)(3) or 14(d)(2) of the Exchange Act), excluding the Company or any
of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of 50% or more of either the then outstanding Shares, or
the then outstanding voting securities entitled (to vote generally in the
election of directors:
(ii) on the date the individuals who constitute the Board of Directors as
of the date of this Plan ("Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors of the Company, provided that any
person becoming a director subsequent to the date of this Plan whose election,
or nomination for election by the Company's stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be, for purposes of this Plan, considered as though such person were a
member of the Incumbent Board; or
(iii) on the date of the occurrence of a transaction for the acquisition of
the Company, through purchase of assets, merger, or otherwise, by a person (as
defined in Section (b)(i) of this Section 10), other than the Company or any of
its subsidiaries, that required stockholder approval.
Section 11. Amendments and Termination.
(a) Certain Conditions. The Committee and/or the Board of Directors of the
Company may amend, alter or discontinue this Plan at any time and from time to
time, but except as otherwise required by law (including as required to secure
or preserve any desired status for this Plan and Stock Options under the Code
and the Section 16 Rules) or provided in the other Sections of this Plan, no
amendment, alteration or discontinuation will be made which would impair the
rights of an Optionee with respect to an Option which has been granted under
this Plan, without the Optionee's consent, or which, without the approval of the
Company's stockholders, would:
(i) except as expressly provided in this Plan, increase the total number of
Shares reserved for the purpose of this Plan:
(ii) decrease the exercise price of any Incentive Stock Option to less than
100% of the Fair Market Value on the date of grant;
(iii) change the persons or class of persons eligible to participate in
this Plan; or
(iv) extend the maximum option term of Incentive Stock Options under
Section 6(e)(ii)) of this Plan.
(b) Approval Required By Law. The approval of the Company's stockholders
shall also be required for any amendment, alteration or discontinuation to the
extent that such approval is required by law (including as required to secure or
preserve any desired status for this Plan and Stock Options under the Code and
the Section 16 Rules).
Section 12. Status of Plan.
With respect to any payments not yet made to an Optionee by the Company,
nothing contained herein gives any Optionee any rights that are greater than
those of a general creditor of the Company.
Section 13. General Provisions.
(a) Representations. The Committee may require each person purchasing
Shares pursuant to a Stock Option under this Plan to represent to and agree with
the Company in writing that the Optionee is acquiring the Shares without a view
to distribution thereof. The certificates for such Shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
Subject to Section 9(c) of this Plan, all certificates for Shares delivered
under this Plan will be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Exchange Act, any stock exchange or market system
upon which the Shares are then listed, and any applicable federal or state
securities law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
(b) Other Arrangements. Nothing contained in this Plan is intended to
prevent the Board of Directors from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required, and
such arrangements may be either generally applicable or applicable only in
specific cases.
(c) No Vested Rights. The adoption of this Plan does not confer upon any
employee of the Company any right to continued employment with the Company nor
is it intended to interfere in any way with the right of the Company to
terminate the employment of any of its employees at any time.
(d) Beneficiaries. The Committee will establish such procedures as it deems
appropriate for an Optionee to designate a beneficiary to whom any amounts
payable in the event of the Optionee's death are to be paid.
(e) Governing Law. This Plan and all Stock Options granted and actions
taken under this Plan will be governed by and construed in accordance with the
laws of the State of Delaware.
Section 14. Effective Date and Term of Plan.
This Plan will become effective on the date it is approved by tale
affirmative vote of the holders of a majority of the shares of Common Stock
present and entitled to vote in person or by proxy at a meeting at which a
majority of the outstanding shares of Common Stock is present in person or by
proxy. All references in this Plan to its date shall mean the date that this
Plan first becomes effective as aforesaid
No Stock Option, may be granted pursuant to this Plan on or after the tenth
anniversary of the effective date of this Plan, but awards granted prior to such
tenth anniversary may extend beyond that date.
<PAGE>
EXHIBIT E
HOENIG GROUP INC.
1994 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is dated the 5th day of September, 1996, by and between
HOENIG GROUP INC. a Delaware corporation ("Employer"), and Fredric P. Sapirstein
("Optionee");
WHEREAS, pursuant to the 1994 Stock Option Plan of Employer (the "Plan"),
the Compensation and Stock Option Committee (the "Committee") of the Board of
Directors of Employer has authorized granting to Optionee an incentive stock
option to purchase all or any part of the number of shares ("Shares") of common
stock, par value $.01 per share, ("Common Stock") of Employer set forth on the
Term Sheet attached hereto as Exhibit 1 under "Number of Shares", at the Price
per Share set forth on the Term Sheet, such Option to be for the Term set forth
on the Term Sheet and upon the terms and conditions hereinafter stated;
Capitalized terms used in this Agreement and not otherwise defined are used
as defined in the Plan.
NOW, THEREFORE, it is hereby agreed:
1. Grant of Option. Pursuant to action of the Committee, Employer hereby
grants to Optionee the option (this "Option") to purchase, upon and subject to
the terms and conditions of the Plan, which terms and conditions are
incorporated herein by reference, all or any part of the Number of Shares of
Common Stock set forth on the attached Term Sheet at the Price per Share set
forth on the attached Term Sheet, which price is not less than one hundred
percent (100%) of the Fair Market Value (as defined in the Plan) (one hundred
ten percent (110%) of the Fair Market Value in the case of any Ten Percent
Stockholder, as defined in the Plan) of such Common Stock as of the date of
action of the Committee granting this Option.
2. Exercisability. (a) This Option shall vest and become exercisable in
accordance with the Vesting Schedule set forth on the attached Term Sheet. This
Option shall remain exercisable as to all of such Shares until the Expiration
Date set forth on the attached Term Sheet unless this Option has expired or
terminated earlier in accordance with the provisions hereof. Shares as to which
this Option becomes exercisable pursuant to the foregoing provision may be
purchased at any time prior to expiration of this Option.
(b) Notwithstanding the preceding provisions of this paragraph, in the
event of (i) the dissolution or liquidation of Employer, (ii) a merger or
reorganization of Employer in which more than 50% of the shares of Common Stock
outstanding immediately prior to the merger or reorganization are converted into
cash or into another security, or (iii) a similar event involving a change in or
with respect to the shares of Common Stock outstanding immediately prior to such
event which the Committee determines, in its sole discretion, would materially
alter the structure of Employer or its ownership, this Option shall either be
assumed or replaced (with appropriate adjustments in the number and kind of
securities for which it is exercisable and exercise price) by the surviving
corporation or, if there be no surviving corporation or if the surviving
corporation refuses to assume this Option or grant replacement stock options,
the Committee, upon at least 10 days' prior written notice to Optionee, may, in
its sole discretion and subject to such conditions as it may impose, do one or
more of the following: (x) shorten the period during which this Option is
exercisable (provided this Option remains exercisable, to the extent otherwise
exercisable, for at least 10 days after the date the notice is given); (xi)
accelerate any vesting schedule to which this Option is subject; or (xii) cancel
this Option upon payment to Optionee in cash, with respect to this Option to the
extent then exercisable, of an amount which, in the sole discretion of the
Committee, is determined to be equivalent to the amount by which the Fair Market
Value (at the effective time of the dissolution, liquidation, merger,
reorganization or other event) of the Shares that Optionee would have received
if this Option had been exercised before the effective time of the transaction,
exceeds the exercise price of this Option. Any payment made pursuant to the
foregoing clause (xii) of this Paragraph 2(b) shall be net of applicable
withholding taxes, including wage and FICA withholding. The actions described in
this Paragraph 2(b) may be taken without regard to any resulting tax, or other,
consequences to Optionee.
3. Effect of Previously Granted Options. Notwithstanding any provision of
this Option to the contrary, this Option shall not be exercisable to any extent
at any time while there is "outstanding" (within the meaning of Section
422A(c)(7) of the Code) any incentive stock option which was granted before the
granting of this Option to Optionee to purchase stock in Employer, in a
corporation which (at the time of the granting of this Option) is a parent
corporation or subsidiary corporation (as defined in Section 425 of the Code) of
Employer, or in a predecessor of any of such corporations.
4. Exercise of Option. This Option may be exercised upon ten days written
notice delivered to Employer stating the number of Shares with respect to which
this Option is being exercised, together with the Exercise Price for such
Shares. Such Exercise Price shall be payable in cash or such other property
having a Fair Market Value equal to such Exercise Price as may be set forth on
the attached Term Sheet under "Permitted Manner of Paying Exercise Price". Not
less than ten Shares may be purchased at any one time unless the number
purchased is the total number of Shares which may be purchased under this
Option.
5. Cessation of Employment, Death or Disability. (a) If Optionee's
employment by Employer or any subsidiary thereof terminates for any reason other
than death or Disability (as defined in the Plan), this Option will thereupon
terminate, except that this Option shall continue to be exercisable for the
lesser of three months from the date of such termination or the balance of the
stated term of this Option. A transfer of an Optionee from Employer to a
subsidiary thereof or vice versa, or from one subsidiary to another, or a leave
of absence duly authorized by Employer or the employing subsidiary (but not
exceeding 90 days unless re-employment upon expiration of the leave is
guaranteed by contract or statue), shall not be deemed a termination of
employment for the purposes of this Option. However, if Optionee is employed by
a subsidiary of Employer and such employer later ceases to be a subsidiary of
Employer for purposes of this Option such changed status shall be treated as a
termination of Optionee's employment even if Optionee remains employed by such
former subsidiary of Employer .
(b) If Optionee shall cease to be employed by Employer or a subsidiary
corporation by reason of Disability, this Option shall expire one year
thereafter or, if earlier, on the date specified in Paragraph 2 hereof or the
date specified in the attached Term Sheet under "Expiration on Disability".
Before any such expiration, Optionee shall have the right to exercise this
Option as to those Shares with respect to which installments, if any, had vested
under Paragraph 2 hereof as of the date on which Optionee ceased to be employed
by Employer or a subsidiary corporation.
(c) If Optionee's employment by Employer or any subsidiary terminates by
reason of death, this Option may thereafter by exercised, to the extent then
exercisable or on such accelerated basis as may be specified in the attached
Term Sheet or as the Committee may determine, by the legal representative of the
estate or by the legatee of Optionee under the will of Optionee, for a period of
twelve months (or such shorter period as may be specified on the attached Term
Sheet) from the date of such death or until the expiration of the term of this
Option, whichever period is the shorter.
6. Nontransferability. This Option shall not be transferable except by Will
or by the laws of descent and distribution and shall, during the life of
Optionee, be exercisable only by Optionee.
7. Employment. This agreement shall not obligate Employer or a subsidiary
corporation to employ Optionee for any period, nor shall it interfere in any way
with the right of Employer or a subsidiary corporation to reduce Optionee's
compensation.
8. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to Shares subject to this Option until the date of
issuance of stock certificates to Optionee. No adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued.
9. Modification and Termination by the Committee. The rights of Optionee
are subject to modification and termination in certain events as provided in the
Plan.
10. Notification of Sale. Optionee, or any person acquiring Shares upon
exercise of this Option, shall notify Employer within five days after any sale
or disposition of such Shares or as otherwise required by the policies and
procedures of Employer.
11. Interpretation of Option. This Option is intended to be an "incentive
stock option" within the meaning of Section 422A of the Code and shall be
construed to implement that intent. If all or any part of this Option shall not
be deemed an "incentive stock option" within the meaning of Section 422A of the
Code, whether by reason of Section 422A(b)(6) or otherwise, this Option shall
nevertheless be valid and carried into effect.
12. Related Documentation. Optionee acknowledges and understands that this
Option is granted under the Plan, and that it is subject to the provisions of
the Plan, whether or not those provisions, or the subjects of those provisions,
are specifically identified or referred to in this Agreement. In addition,
Optionee acknowledges that if the Committee approves payment of any part of the
exercise price by a promissory note, Employer is conditioning the exercise of
this Option upon Optionee's entering into a pledge in form and substance
satisfactory to Employer and such other documentation as may be required by the
Committee.
13. Employment Relationship. Optionee agrees that (i) unless otherwise
expressed in a writing signed by the Employer, all employees of Employer and its
subsidiaries, including Optionee, are hired for an unspecified period of time
and are considered to be "at-will employees," and (ii) nothing in the Plan or
this Agreement confers upon Optionee the right to continue in the employ of
Employer or any of its subsidiaries, nor shall it limit or restrict in any way
the right of Employer or any of its subsidiaries to discharge Optionee at any
time for any reason whatsoever, with or without cause.
14. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given on the day delivered personally or
by telex or, on the second business day following the day on which mailed by
registered or certified mail (return receipt requested), postage prepaid, to
Optionee at Optionee's employer or residence as reflected in the records of
Employer, and to Employer at the following address:
Royal Executive Park
4 International Drive
Rye Brook, NY 10573
Attention: Chief Financial Officer
or such other addresses as the parties may designate in writing from time to
time.
15. Miscellaneous. (a) This Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives and
successors of the parties; provided, however, that Optionee may not assign any
of Optionee's rights, or delegate any of Optionee's duties, under this
Agreement.
(b) This Agreement shall be governed by, construed and enforced in
accordance with the internal laws (as opposed to conflicts of laws provisions)
of the State of New York. The parties agree that the exclusive jurisdiction and
venue of any action with respect to this Agreement shall be in the Supreme Court
of New York for the County of Westchester or the United States District Court
for the Southern District of New York. Each of the parties submits to the
exclusive jurisdiction and venue of those courts for the purpose of such an
action. The parties agree that service of process in any such action may be
effected in the manner provided in this Agreement for delivery of Notices.
(c) The exhibits attached to this Agreement, including, without limitation,
the Plan and the Term Sheet, are incorporated into and form a part of this
Agreement. The Agreement, together with the Plan and the Term Sheet, contain all
of the terms and conditions agreed upon by the parties relating to its subject
matter, represents the final, complete and exclusive statement of the parties,
and supersedes any and all prior or contemporaneous agreements, negotiations,
correspondence, understandings and communications of the parties whether oral or
written, respecting that subject matter. This Agreement may be signed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
(d) If, but only if, it is provided on the attached Term Sheet that this
Option is not subject to the provisions of Section 10 of the Plan with respect
to a Change of Control (as defined in the Plan), this Option shall be subject to
such provisions.
<PAGE>
SUMMARY INFORMATION SHEET
1994 STOCK OPTION PLAN
Name and address of Optionee: Fredric P. Sapirstein
150 Central Park South
New York, NY 10019
Social Security No.: ###-##-####
Grant Date: September 5, 1996
Type of Option: Incentive Stock Options
Number of Shares: 110,000
Exercise price per share: $3.625
Aggregate exercise price: $398,750.00
Expiration date: September 4, 2006
Permitted manner of
paying exercise price: The aggregate exercise price of the shares
purchased (including withholding taxes) must
be paid in cash unless agreed upon by the
Administrator.
Vesting period: 25% immediately. Additional 25% on each of
September 1997, 1998 and 1999. The terms of
Section 10 of the Plan containing change in
control provisions shall apply to this
Option. This Option shall be fully vested in
the event of termination of Optionee's
employment after September 5, 1997 by the
Company other than for Cause or by the
Optionee with Good Reason, all as provided in
Section 3(c)(3) of the Employment Agreement
between the Company and the Optionee dated
September 5, 1996.
Special Termination: In addition to the option termination
provisions contained in the Plan, all options
shall terminate immediately, whether or not
vested, on the date the Employment Agreement
between the Company and the Optionee dated
September 5, 1996 is terminated for "Cause".
<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement
as of the date set forth in its first paragraph.
HOENIG GROUP INC.
By: /s/ Alan B. Herzog
-----------------------
Title: Chief Operating Officer
OPTIONEE
/s/ Fredric P. Sapirstein
-------------------------
Fredric P. Sapirstein
<PAGE>
EXHIBIT F
HOENIG GROUP INC.
1994 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is dated the 5th day of September, 1996, by and between
HOENIG GROUP INC. a Delaware corporation ("Employer"), and Fredric P. Sapirstein
("Optionee");
WHEREAS, pursuant to the 1994 Stock Option Plan of Employer (the "Plan"),
the Compensation and Stock Option Committee (the "Committee") of the Board of
Directors of Employer has authorized granting to Optionee a non-qualified stock
option to purchase all or any part of the number of shares ("Shares") of common
stock, par value $.01 per share, ("Common Stock") of Employer set forth on the
Term Sheet attached hereto as Exhibit 1 under "Number of Shares", at the Price
per Share set forth on the Term Sheet, such Option to be for the Term set forth
on the Term Sheet and upon the terms and conditions hereinafter stated;
Capitalized terms used in this Agreement and not otherwise defined are used
as defined in the Plan.
NOW, THEREFORE, it is hereby agreed:
1. Grant of Option. Pursuant to action of the Committee, Employer hereby
grants to Optionee the option (this "Option") to purchase, upon and subject to
the terms and conditions of the Plan, which terms and conditions are
incorporated herein by reference, all or any part of the Number of Shares of
Common Stock set forth on the attached Term Sheet at the Price per Share set
forth on the attached Term Sheet.
2. Exercisability. (a) This Option shall vest and become exercisable in
accordance with the Vesting Schedule set forth on the attached Term Sheet. This
Option shall remain exercisable as to all of such Shares until the Expiration
Date set forth on the attached Term Sheet unless this Option has expired or
terminated earlier in accordance with the provisions hereof. Shares as to which
this Option becomes exercisable pursuant to the foregoing provision may be
purchased at any time prior to expiration of this Option.
(b) Notwithstanding the preceding provisions of this paragraph, in the
event of (i) the dissolution or liquidation of Employer, (ii) a merger or
reorganization of Employer in which more than 50% of the shares of Common Stock
outstanding immediately prior to the merger or reorganization are converted into
cash or into another security, or (iii) a similar event involving a change in or
with respect to the shares of Common Stock outstanding immediately prior to such
event which the Committee determines, in its sole discretion, would materially
alter the structure of Employer or its ownership, this Option shall either be
assumed or replaced (with appropriate adjustments in the number and kind of
securities for which it is exercisable and exercise price) by the surviving
corporation or, if there be no surviving corporation or if the surviving
corporation refuses to assume this Option or grant replacement stock options,
the Committee, upon at least 10 days' prior written notice to Optionee, may, in
its sole discretion and subject to such conditions as it may impose, do one or
more of the following: (x) shorten the period during which this Option is
exercisable (provided this Option remains exercisable, to the extent otherwise
exercisable, for at least 10 days after the date the notice is given); (xi)
accelerate any vesting schedule to which this Option is subject; or (xii) cancel
this Option upon payment to Optionee in cash, with respect to this Option to the
extent then exercisable, of an amount which, in the sole discretion of the
Committee, is determined to be equivalent to the amount by which the Fair Market
Value (at the effective time of the dissolution, liquidation, merger,
reorganization or other event) of the Shares that Optionee would have received
if this Option had been exercised before the effective time of the transaction,
exceeds the exercise price of this Option. Any payment made pursuant to the
foregoing clause (xii) of this Paragraph 2(b) shall be net of applicable
withholding taxes, including wage and FICA withholding. The actions described in
this Paragraph 2(b) may be taken without regard to any resulting tax, or other,
consequences to Optionee.
3. Exercise of Option. This Option may be exercised upon ten days written
notice delivered to Employer stating the number of Shares with respect to which
this Option is being exercised, together with the Exercise Price for such
Shares. Such Exercise Price shall be payable in cash or such other property
having a Fair Market Value equal to such Exercise Price as may be set forth on
the attached Term Sheet under "Permitted Manner of Paying Exercise Price". Not
less than ten Shares may be purchased at any one time unless the number
purchased is the total number of Shares which may be purchased under this
Option.
4. Cessation of Employment, Death or Disability. (a) If Optionee's
employment by Employer or any subsidiary thereof terminates for any reason other
than death or Disability (as defined in the Plan), this Option will thereupon
terminate, except that this Option shall continue to be exercisable for the
lesser of three months from the date of such termination or the balance of the
stated term of this Option. A transfer of an Optionee from Employer to a
subsidiary thereof or vice versa, or from one subsidiary to another, or a leave
of absence duly authorized by Employer or the employing subsidiary (but not
exceeding 90 days unless re-employment upon expiration of the leave is
guaranteed by contract or statue), shall not be deemed a termination of
employment for the purposes of this Option. However, if Optionee is employed by
a subsidiary of Employer and such employer later ceases to be a subsidiary of
Employer for purposes of this Option such changed status shall be treated as a
termination of Optionee's employment even if Optionee remains employed by such
former subsidiary of Employer .
(b) If Optionee shall cease to be employed by Employer or a subsidiary
corporation by reason of Disability, this Option shall expire one year
thereafter or, if earlier, on the date specified in Paragraph 2 hereof or the
date specified in the attached Term Sheet under "Expiration on Disability".
Before any such expiration, Optionee shall have the right to exercise this
Option as to those Shares with respect to which installments, if any, had vested
under Paragraph 2 hereof as of the date on which Optionee ceased to be employed
by Employer or a subsidiary corporation.
(c) If Optionee's employment by Employer or any subsidiary terminates by
reason of death, this Option may thereafter by exercised, to the extent then
exercisable or on such accelerated basis as may be specified in the attached
Term Sheet or as the Committee may determine, by the legal representative of the
estate or by the legatee of Optionee under the will of Optionee, for a period of
twelve months (or such shorter period as may be specified on the attached Term
Sheet) from the date of such death or until the expiration of the term of this
Option, whichever period is the shorter.
5. Nontransferability. This Option shall not be transferable except by Will
or by the laws of descent and distribution and shall, during the life of
Optionee, be exercisable only by Optionee.
6. Employment. This agreement shall not obligate Employer or a subsidiary
corporation to employ Optionee for any period, nor shall it interfere in any way
with the right of Employer or a subsidiary corporation to reduce Optionee's
compensation.
7. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to Shares subject to this Option until the date of
issuance of stock certificates to Optionee. No adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued.
8. Modification and Termination by the Committee. The rights of Optionee
are subject to modification and termination in certain events as provided in the
Plan.
9. Notification of Sale. Optionee, or any person acquiring Shares upon
exercise of this Option, shall notify Employer within five days after any sale
or disposition of such Shares or as otherwise required by the policies and
procedures of Employer.
10. Related Documentation. Optionee acknowledges and understands that this
Option is granted under the Plan, and that it is subject to the provisions of
the Plan, whether or not those provisions, or the subjects of those provisions,
are specifically identified or referred to in this Agreement. In addition,
Optionee acknowledges that if the Committee approves payment of any part of the
exercise price by a promissory note, Employer is conditioning the exercise of
this Option upon Optionee's entering into a pledge in form and substance
satisfactory to Employer and such other documentation as may be required by the
Committee.
11. Employment Relationship. Optionee agrees that (i) unless otherwise
expressed in a writing signed by the Employer, all employees of Employer and its
subsidiaries, including Optionee, are hired for an unspecified period of time
and are considered to be "at-will employees," and (ii) nothing in the Plan or
this Agreement confers upon Optionee the right to continue in the employ of
Employer or any of its subsidiaries, nor shall it limit or restrict in any way
the right of Employer or any of its subsidiaries to discharge Optionee at any
time for any reason whatsoever, with or without cause.
12. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given on the day delivered personally or
by telex or, on the second business day following the day on which mailed by
registered or certified mail (return receipt requested), postage prepaid, to
Optionee at Optionee's employer or residence as reflected in the records of
Employer, and to Employer at the following address:
Royal Executive Park
4 International Drive
Rye Brook, NY 10573
Attention: Chief Financial Officer
or such other addresses as the parties may designate in writing from time to
time.
13. Miscellaneous. (a) This Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives and
successors of the parties; provided, however, that Optionee may not assign any
of Optionee's rights, or delegate any of Optionee's duties, under this
Agreement.
(b) This Agreement shall be governed by, construed and enforced in
accordance with the internal laws (as opposed to conflicts of laws provisions)
of the State of New York. The parties agree that the exclusive jurisdiction and
venue of any action with respect to this Agreement shall be in the Supreme Court
of New York for the County of Westchester or the United States District Court
for the Southern District of New York. Each of the parties submits to the
exclusive jurisdiction and venue of those courts for the purpose of such an
action. The parties agree that service of process in any such action may be
effected in the manner provided in this Agreement for delivery of Notices.
(c) The exhibits attached to this Agreement, including, without limitation,
the Plan and the Term Sheet, are incorporated into and form a part of this
Agreement. The Agreement, together with the Plan and the Term Sheet, contain all
of the terms and conditions agreed upon by the parties relating to its subject
matter, represents the final, complete and exclusive statement of the parties,
and supersedes any and all prior or contemporaneous agreements, negotiations,
correspondence, understandings and communications of the parties whether oral or
written, respecting that subject matter. This Agreement may be signed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
(d) If, but only if, it is provided on the attached Term Sheet that this
Option is not subject to the provisions of Section 10 of the Plan with respect
to a Change of Control (as defined in the Plan), this Option shall be subject to
such provisions.
<PAGE>
SUMMARY INFORMATION SHEET
1994 STOCK OPTION PLAN
Name and address of Optionee: Fredric P. Sapirstein
150 Central Park South
New York, NY 10019
Social Security No.: ###-##-####
Grant Date: September 5, 1996
Type of Option: Non-Qualified Stock Option
Number of Shares: 7,500
Exercise price per share: $3.625
Aggregate exercise price: $27,187.50
Expiration date: September 4, 2006
Permitted manner of
paying exercise price: The aggregate exercise price of the shares
purchased (including withholding taxes) must
be paid in cash unless agreed upon by the
Administrator.
Vesting period: 25% immediately. Additional 25% on each
September 5, 1997, 1998 and 1999. The terms
of Section 10 of the Plan containing change
in control provisions shall apply to this
Option. This Option shall be fully vested in
the event of termination of Optionee's
employment after September 5, 1997 by the
Company other than for Cause or by the
Optionee with Good Reason, all as provided in
Section 3(c)(3) of the Employment Agreement
between the Company and the Optionee dated
September 5, 1996.
Special Termination: In addition to the option termination
provisions contained in the Plan, all options
shall terminate immediately, whether or not
vested, on the date the Employment Agreement
between the Company and the Optionee dated
September 5, 1996 is terminated for "Cause".
<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement
as of the date set forth in its first paragraph.
HOENIG GROUP INC.
By: /s/ Alan B. Herzog
-----------------------
Title: Chief Operating Officer
OPTIONEE
/s/ Fredric P. Sapirstein
-------------------------
Fredric P. Sapirstein
<PAGE>
EXHIBIT G
HOENIG GROUP INC.
1994 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is dated the 5th day of September, 1996, by and between
HOENIG GROUP INC. a Delaware corporation ("Employer"), and Fredric P. Sapirstein
("Optionee");
WHEREAS, pursuant to the 1994 Stock Option Plan of Employer (the "Plan"),
the Compensation and Stock Option Committee (the "Committee") of the Board of
Directors of Employer has authorized granting to Optionee a non-qualified stock
option to purchase all or any part of the number of shares ("Shares") of common
stock, par value $.01 per share, ("Common Stock") of Employer set forth on the
Term Sheet attached hereto as Exhibit 1 under "Number of Shares", at the Price
per Share set forth on the Term Sheet, such Option to be for the Term set forth
on the Term Sheet and upon the terms and conditions hereinafter stated;
Capitalized terms used in this Agreement and not otherwise defined are used
as defined in the Plan.
NOW, THEREFORE, it is hereby agreed:
1. Grant of Option. Pursuant to action of the Committee, Employer hereby
grants to Optionee the option (this "Option") to purchase, upon and subject to
the terms and conditions of the Plan, which terms and conditions are
incorporated herein by reference, all or any part of the Number of Shares of
Common Stock set forth on the attached Term Sheet at the Price per Share set
forth on the attached Term Sheet.
2. Exercisability. (a) This Option shall vest and become exercisable in
accordance with the Vesting Schedule set forth on the attached Term Sheet. This
Option shall remain exercisable as to all of such Shares until the Expiration
Date set forth on the attached Term Sheet unless this Option has expired or
terminated earlier in accordance with the provisions hereof. Shares as to which
this Option becomes exercisable pursuant to the foregoing provision may be
purchased at any time prior to expiration of this Option.
(b) Notwithstanding the preceding provisions of this paragraph, in the
event of (i) the dissolution or liquidation of Employer, (ii) a merger or
reorganization of Employer in which more than 50% of the shares of Common Stock
outstanding immediately prior to the merger or reorganization are converted into
cash or into another security, or (iii) a similar event involving a change in or
with respect to the shares of Common Stock outstanding immediately prior to such
event which the Committee determines, in its sole discretion, would materially
alter the structure of Employer or its ownership, this Option shall either be
assumed or replaced (with appropriate adjustments in the number and kind of
securities for which it is exercisable and exercise price) by the surviving
corporation or, if there be no surviving corporation or if the surviving
corporation refuses to assume this Option or grant replacement stock options,
the Committee, upon at least 10 days' prior written notice to Optionee, may, in
its sole discretion and subject to such conditions as it may impose, do one or
more of the following: (x) shorten the period during which this Option is
exercisable (provided this Option remains exercisable, to the extent otherwise
exercisable, for at least 10 days after the date the notice is given); (xi)
accelerate any vesting schedule to which this Option is subject; or (xii) cancel
this Option upon payment to Optionee in cash, with respect to this Option to the
extent then exercisable, of an amount which, in the sole discretion of the
Committee, is determined to be equivalent to the amount by which the Fair Market
Value (at the effective time of the dissolution, liquidation, merger,
reorganization or other event) of the Shares that Optionee would have received
if this Option had been exercised before the effective time of the transaction,
exceeds the exercise price of this Option. Any payment made pursuant to the
foregoing clause (xii) of this Paragraph 2(b) shall be net of applicable
withholding taxes, including wage and FICA withholding. The actions described in
this Paragraph 2(b) may be taken without regard to any resulting tax, or other,
consequences to Optionee.
3. Exercise of Option. This Option may be exercised upon ten days written
notice delivered to Employer stating the number of Shares with respect to which
this Option is being exercised, together with the Exercise Price for such
Shares. Such Exercise Price shall be payable in cash or such other property
having a Fair Market Value equal to such Exercise Price as may be set forth on
the attached Term Sheet under "Permitted Manner of Paying Exercise Price". Not
less than ten Shares may be purchased at any one time unless the number
purchased is the total number of Shares which may be purchased under this
Option.
4. Cessation of Employment, Death or Disability. (a) If Optionee's
employment by Employer or any subsidiary thereof terminates for any reason other
than death or Disability (as defined in the Plan), this Option will thereupon
terminate, except that this Option shall continue to be exercisable for the
lesser of three months from the date of such termination or the balance of the
stated term of this Option. A transfer of an Optionee from Employer to a
subsidiary thereof or vice versa, or from one subsidiary to another, or a leave
of absence duly authorized by Employer or the employing subsidiary (but not
exceeding 90 days unless re-employment upon expiration of the leave is
guaranteed by contract or statue), shall not be deemed a termination of
employment for the purposes of this Option. However, if Optionee is employed by
a subsidiary of Employer and such employer later ceases to be a subsidiary of
Employer for purposes of this Option such changed status shall be treated as a
termination of Optionee's employment even if Optionee remains employed by such
former subsidiary of Employer .
(b) If Optionee shall cease to be employed by Employer or a subsidiary
corporation by reason of Disability, this Option shall expire one year
thereafter or, if earlier, on the date specified in Paragraph 2 hereof or the
date specified in the attached Term Sheet under "Expiration on Disability".
Before any such expiration, Optionee shall have the right to exercise this
Option as to those Shares with respect to which installments, if any, had vested
under Paragraph 2 hereof as of the date on which Optionee ceased to be employed
by Employer or a subsidiary corporation.
(c) If Optionee's employment by Employer or any subsidiary terminates by
reason of death, this Option may thereafter by exercised, to the extent then
exercisable or on such accelerated basis as may be specified in the attached
Term Sheet or as the Committee may determine, by the legal representative of the
estate or by the legatee of Optionee under the will of Optionee, for a period of
twelve months (or such shorter period as may be specified on the attached Term
Sheet) from the date of such death or until the expiration of the term of this
Option, whichever period is the shorter.
5. Nontransferability. This Option shall not be transferable except by Will
or by the laws of descent and distribution and shall, during the life of
Optionee, be exercisable only by Optionee.
6. Employment. This agreement shall not obligate Employer or a subsidiary
corporation to employ Optionee for any period, nor shall it interfere in any way
with the right of Employer or a subsidiary corporation to reduce Optionee's
compensation.
7. Privileges of Stock Ownership. Optionee shall have no rights as a
stockholder with respect to Shares subject to this Option until the date of
issuance of stock certificates to Optionee. No adjustment will be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued.
8. Modification and Termination by the Committee. The rights of Optionee
are subject to modification and termination in certain events as provided in the
Plan.
9. Notification of Sale. Optionee, or any person acquiring Shares upon
exercise of this Option, shall notify Employer within five days after any sale
or disposition of such Shares or as otherwise required by the policies and
procedures of Employer.
10. Related Documentation. Optionee acknowledges and understands that this
Option is granted under the Plan, and that it is subject to the provisions of
the Plan, whether or not those provisions, or the subjects of those provisions,
are specifically identified or referred to in this Agreement. In addition,
Optionee acknowledges that if the Committee approves payment of any part of the
exercise price by a promissory note, Employer is conditioning the exercise of
this Option upon Optionee's entering into a pledge in form and substance
satisfactory to Employer and such other documentation as may be required by the
Committee.
11. Employment Relationship. Optionee agrees that (i) unless otherwise
expressed in a writing signed by the Employer, all employees of Employer and its
subsidiaries, including Optionee, are hired for an unspecified period of time
and are considered to be "at-will employees," and (ii) nothing in the Plan or
this Agreement confers upon Optionee the right to continue in the employ of
Employer or any of its subsidiaries, nor shall it limit or restrict in any way
the right of Employer or any of its subsidiaries to discharge Optionee at any
time for any reason whatsoever, with or without cause.
12. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed given on the day delivered personally or
by telex or, on the second business day following the day on which mailed by
registered or certified mail (return receipt requested), postage prepaid, to
Optionee at Optionee's employer or residence as reflected in the records of
Employer, and to Employer at the following address:
Royal Executive Park
4 International Drive
Rye Brook, NY 10573
Attention: Chief Financial Officer
or such other addresses as the parties may designate in writing from time to
time.
13. Miscellaneous. (a) This Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives and
successors of the parties; provided, however, that Optionee may not assign any
of Optionee's rights, or delegate any of Optionee's duties, under this
Agreement.
(b) This Agreement shall be governed by, construed and enforced in
accordance with the internal laws (as opposed to conflicts of laws provisions)
of the State of New York. The parties agree that the exclusive jurisdiction and
venue of any action with respect to this Agreement shall be in the Supreme Court
of New York for the County of Westchester or the United States District Court
for the Southern District of New York. Each of the parties submits to the
exclusive jurisdiction and venue of those courts for the purpose of such an
action. The parties agree that service of process in any such action may be
effected in the manner provided in this Agreement for delivery of Notices.
(c) The exhibits attached to this Agreement, including, without limitation,
the Plan and the Term Sheet, are incorporated into and form a part of this
Agreement. The Agreement, together with the Plan and the Term Sheet, contain all
of the terms and conditions agreed upon by the parties relating to its subject
matter, represents the final, complete and exclusive statement of the parties,
and supersedes any and all prior or contemporaneous agreements, negotiations,
correspondence, understandings and communications of the parties whether oral or
written, respecting that subject matter. This Agreement may be signed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
(d) If, but only if, it is provided on the attached Term Sheet that this
Option is not subject to the provisions of Section 10 of the Plan with respect
to a Change of Control (as defined in the Plan), this Option shall be subject to
such provisions.
<PAGE>
SUMMARY INFORMATION SHEET
1994 STOCK OPTION PLAN
Name and address of Optionee: Fredric P. Sapirstein
150 Central Park South
New York, NY 10019
Social Security No.: ###-##-####
Grant Date: September 5, 1996
Type of Option: Non-Qualified Stock Option
Number of Shares: 132,500
Exercise price per share: $5.00
Aggregate exercise price: $662,500
Expiration date: September 4, 2006
Permitted manner of
paying exercise price: The aggregate exercise price of the shares
purchased (including withholding taxes) must
be paid in cash unless agreed upon by the
Administrator.
Vesting period: The earlier of (i) September 5, 2005, or (ii)
with respect to (A) 50% of the option shares,
on or after the date following any 20
consecutive day period after the date hereof
that the average closing price of the Common
Stock shall equal or exceed $7.00 per share
and (B) 100% of the option shares on or after
the date following any 20 consecutive day
period after the date hereof that the average
closing price of the Common Stock shall equal
or exceed $8.00 per share. The terms of
Section 10 of the Plan containing change in
control provisions shall apply to the Option.
Special Termination: In addition to the option termination
provisions contained in the Plan, all options
shall terminate immediately, whether or not
vested, on the date the Employment Agreement
between the Company and the Optionee dated
September 5, 1996 is terminated for "Cause".
<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement
as of the date set forth in its first paragraph.
HOENIG GROUP INC.
By: /s/ Alan B. Herzog
----------------------
Title: Chief Operating Officer
OPTIONEE
/s/ Fredric P. Sapirstein
-------------------------
Fredric P. Sapirstein
<PAGE>
EXHIBIT H
HOENIG GROUP INC.
1996 LONG-TERM STOCK INCENTIVE PLAN
l. Purpose. The purpose of this 1996 Long-Term Stock Incentive Plan (the
"Plan") of Hoenig Group Inc., a Delaware corporation, is to advance the
interests of the Company and its stockholders by providing a means to attract,
retain, and reward directors, officers and other key employees and consultants
of the Company and its subsidiaries (including consultants providing services of
substantial value) and to enable such persons to acquire or increase a
proprietary interest in the Company, thereby promoting a closer identity of
interests between such persons and the Company's stockholders.
2. Definitions. The definitions of awards under the Plan, including U.S.
Stock Options, U.K. Stock Options, SARs (including Limited SARs), Restricted
Stock, Deferred Stock, Stock granted as a bonus or in lieu of other awards,
Dividend Equivalents, and Other Stock-Based Awards, are set forth in Section 6
of the Plan. Such awards, together with any other right or interest granted to a
Participant under the Plan, are termed "Awards." For purposes of the Plan, the
following additional terms shall be defined as set forth below:
"Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
"Beneficiary" shall mean the person, persons, trust or trusts which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under
this Plan upon such Participant's death or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and distribution to receive
such benefits.
"Board" means the Board of Directors of the Company.
A "Change in Control" shall be deemed to have occurred if:
(i) on the date of the acquisition by any "person" (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act), excluding the Company or any
of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of 50% or more of either the then outstanding shares of
Stock, or the then outstanding voting securities entitled to vote generally in
the election of directors;
(ii) on the date the individuals who constitute the Board of Directors as
of the effective date of this Plan ("Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of the Company,
provided that any person becoming a director subsequent to the effective date of
this Plan whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be, for purposes of this Plan,
considered as though such person were a member of the Incumbent Board; or
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a reverse
stock split of outstanding voting securities, the issuance of shares of stock of
the Company in connection with the acquisition of the stock or assets of another
entity, or consummation of any of the foregoing transactions if stockholder
approval is not sought or obtained, provided, however, that a Change in Control
shall not occur under this clause (iii) if consummation of the transaction would
result in at least 75% of the total voting power represented by the voting
securities of the Company (or if the Company does not survive, the surviving
entity) outstanding immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the Exchange Act) by
at least 75% of the holders of outstanding voting securities of the Company
immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially
altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or a substantial portion of the Company's assets (i.e., 85% or
more of the total assets of the Company).
Notwithstanding the foregoing, for the purposes of subsection (i) only, the
definition of "person" shall not include any beneficial holder of more than 5%
of Common Stock as of September 30, 1996, or any person, trust, or entity which
is a successor by will or by the laws of descent and distribution to any such
holder or any combination of such holders or group of such holders (including,
without limitation, any such person or persons acting as a partnership, limited
partnership, syndicate or other group whether formally organized or not).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
regulations thereunder and successor provisions and regulations thereto.
"Committee" means the Compensation and Stock Option Committee of the Board,
or such other Board committee as may be designated by the Board to administer
the Plan. In appointing members of the Committee, the Board will consider
whether each member will qualify as a "Non-Employee Director" within the meaning
of Rule 16b-3(b)(3) and as an "outside director" within the meaning of Treasury
Regulation 1.162-27(e)(3) under Code Section 162(m), but such members are not
required to so qualify at the time of appointment or during their term of
service on the Committee.
"Common Stock" means the shares of common stock, $.01 par value per share,
of the Company.
"Company" means Hoenig Group Inc., a corporation organized under the laws
of the State of Delaware, and any successor thereto; provided that unless
otherwise provided in this Plan, all references in this Plan to employment by
the Company shall include employment by any subsidiary of the Company.
"Covered Employee" means a person defined as a "covered employee" in
Section 162(m)(3) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time. References to any provision of the Exchange Act shall be deemed to
include rules thereunder and successor provisions and rules thereto.
"Fair Market Value" means, with respect to Stock, Awards, or other
property, (i) in the case of U.S. Stock Options and the Stock underlying such
U.S. Stock Options, (a) if the Stock is listed on a securities exchange or is
traded over the NASDAQ National Market System, the closing sales price of the
Stock on such exchange or over such system on such date or, in the absence of
reported sales on such date, the closing sales price on the immediately
preceding date on which sales were reported, or (b) if the Stock is not listed
on a securities exchange or traded over the NASDAQ National Market System, the
mean between the bid and offered prices of the shares as quoted by the National
Association of Securities Dealers through NASDAQ for such date, provided, that
if the Committee determines that the fair market value of the Stock is not
properly reflected by such NASDAQ quotations, the "Fair Market Value" of the
Stock will mean the fair market value as determined by such other method as the
Committee determines in good faith to be reasonable; and (ii) in the case of
U.K. Stock Options and the Share underlying such U.K. Stock Options, "Fair
Market Value" as determined in accordance with the foregoing clause (i) of this
definition, or as agreed from time to time with the Inland Revenue, if
different.
"Inland Revenue" means the Board of the Inland Revenue of the United
Kingdom of Great Britain and Northern Ireland.
"ISO" means any Option intended to be and designated as an incentive stock
option within the meaning of Section 422 of the Code.
"Non-Employee Director" shall mean a member of the Board who is not
otherwise an employee of the Company or any subsidiary.
"Participant" means a person who, at a time when eligible under Section 5
hereof, has been granted an Award under the Plan.
"Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
"Stock" means the Common Stock and such other securities as may be
substituted for Stock or such other securities pursuant to Section 4.
"U.K. Stock Option" means a Stock Option granted to a Participant which is
subject to the provisions of Section 6(c) of this Plan.
"U.S. Stock Option" means a Stock Option other than a U.K. Stock Option.
3. Administration.
(a) Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select Participants to whom Awards may be granted;
(ii) to determine the type or types of Awards to be granted to each
Participant;
(iii) to determine the number of Awards to be granted, the number of shares
of Stock to which an Award will relate, the terms and conditions of any Award
granted under the Plan (including, but not limited to, any exercise price, grant
price, or purchase price, any restriction or condition, any schedule for lapse
of restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of an Award, and waivers or accelerations thereof,
and waivers of or modifications to performance conditions relating to an Award,
based in each case on such considerations as the Committee shall determine), and
all other matters to be determined in connection with an Award;
(iv) to determine whether, to what extent, and under what circumstances an
Award may be settled, or the exercise price of an Award may be paid, in cash,
Stock, other Awards, or other property, or an Award may be canceled, forfeited,
or surrendered;
(v) to determine whether, to what extent, and under what circumstances
cash, Stock, other Awards, or other property payable with respect to an Award
will be deferred either automatically, at the election of the Committee, or at
the election of the Participant;
(vi) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(vii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(viii) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder; and
(ix) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or advisable
for the administration of the Plan.
Other provisions of the Plan notwithstanding, the Board may perform any function
of the Committee under the Plan, including without limitation for the purpose of
ensuring that transactions under the Plan by Participants who are then subject
to Section 16 of the Exchange Act in respect of the Company are exempt under
Rule 16b-3. In any case in which the Board is performing a function of the
Committee under the Plan, each reference to the Committee herein shall be deemed
to refer to the Board.
(b) Manner of Exercise of Committee Authority. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Company's
Certificate of Incorporation or By-laws, or applicable law, the Committee shall
have sole discretion in exercising authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, subsidiaries of the Company, Participants,
any person claiming any rights under the Plan from or through any Participant,
and stockholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. The Committee may delegate to officers
or managers of the Company or any subsidiary of the Company the authority,
subject to such terms as the Committee shall determine, to perform
administrative functions and to perform such other functions as the Committee
may determine.
(c) Limitation of Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him by any officer or other employee of the Company or any subsidiary, the
Company's independent certified public accountants, or any executive
compensation consultant, legal counsel, or other professional retained by the
Company to assist in the administration of the Plan. No member of the Committee,
nor any officer or employee of the Company acting on behalf of the Committee,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Committee and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination, or interpretation.
4. Stock Subject to Plan.
(a) Amount of Stock Reserved. The total number of shares of Stock that may
be delivered pursuant to the exercise or settlement of an Award shall not in the
aggregate exceed (i) 1,000,000 shares plus (ii) the number of shares of Stock
that, on the date of approval of this Plan by the Company's stockholders, would
otherwise have been available under the Company's 1991 Stock Option Plan and
1994 Stock Option Plan (i.e., unused shares), or would have otherwise become
available after such date (i.e., by reason of the termination, expiration or
forfeiture of stock options outstanding under such plans); provided, however,
that shares subject to Awards shall not be deemed delivered if such Awards are
forfeited, expire or otherwise terminate without delivery of shares to the
Participant. If an Award valued by reference to Stock may only be settled in
cash, the number of shares to which such Award relates shall be deemed to be
Stock subject to such Award for purposes of this Section 4(a). Any shares of
Stock delivered pursuant to an Award may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
(b) Annual Per-Participant Limitations. During any calendar year, no
Participant may be granted Options and other Awards under the Plan that may be
settled by delivery of more than 750,000 shares of Stock, subject to adjustment
as provided in Section 4(c). In addition, with respect to Awards that may be
settled in cash (in whole or in part), no Participant may be paid during any
calendar year cash amounts relating to such Awards that exceed the greater of
the Fair Market Value of the number of shares of Stock set forth in the
preceding sentence at the date of grant or the date of settlement of Award. This
provision sets forth two separate limitations, so that awards that may be
settled solely by delivery of Stock will not operate to reduce the amount of
cash-only Awards, and vice versa; nevertheless, Awards that may be settled in
Stock or cash must not exceed either limitation.
(c) Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Stock, or other
property), recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan (such event, upon the Committee's
determination, a "Material Change"), then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares of
Stock reserved and available for Awards under Section 4(a), (ii) the number and
kind of shares of outstanding Restricted Stock or other outstanding Award in
connection with which shares have been issued, (iii) the number and kind of
shares that may be issued in respect of other outstanding Awards, (iv) the
exercise price, grant price, or purchase price relating to any Award (or, if
deemed appropriate, the Committee may make provision for a cash payment with
respect to any outstanding Award), and (v) the number of shares with respect to
which Awards may be granted or measured in any calendar year, as set forth in
Section 4(b). In addition, the Committee is authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards (including,
without limitation, cancellation of outstanding Awards after advance notice
thereof or substitution of Awards using stock of a successor or other entity) in
recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence and events constituting a Change in
Control) affecting the Company or any subsidiary or the financial statements of
the Company or any subsidiary, or in response to changes in applicable laws,
regulations, or accounting principles. With respect to U.K. Stock Options, in
the event that a Material Change occurs and a surviving corporation does not
assume all outstanding U.K. Stock Options, all such outstanding U.K. Stock
Options shall continue to be exercisable for a period of 6 months after the date
the Material Change occurs, as determined by the Committee.
5. Eligibility. Executive officers and other key employees of the Company
and its subsidiaries, including any director or officer who is also such an
employee, and persons who provide consulting or other services to the Company
deemed by the Committee to be of substantial value to the Company, are eligible
to be granted Awards under the Plan. In addition, a person who has been offered
employment by the Company or its subsidiaries is eligible to be granted an Award
under the Plan, provided that such Award shall be canceled if such person fails
to commence such employment, and no payment of value may be made in connection
with such Award until such person has commenced such employment.
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set forth in
this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 8(e)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of employment or service of the
Participant. Except as provided in Sections 6(f), 6(h), or 7(a), or to the
extent required to comply with requirements of the Delaware General Corporation
Law that lawful consideration be paid for Stock, only services may be required
as consideration for the grant (but not the exercise) of any Award.
(b) U.S. Stock Options. The Committee is authorized to grant Options to
Participants (including "reload" options automatically granted to offset
specified exercises of options) on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock purchasable under
an Option shall be determined by the Committee.
(ii) Time and Method of Exercise. The Committee shall determine the time or
times at which an Option may be exercised in whole or in part, the methods by
which such exercise price may be paid or deemed to be paid, the form of such
payment, including, without limitation, cash, Stock, other Awards or awards
granted under other Company plans, or other property (including notes or other
contractual obligations of Participants to make payment on a deferred basis,
such as through "cashless exercise" arrangements, to the extent permitted by
applicable law), and the methods by which Stock will be delivered or deemed to
be delivered to Participants.
(iii) ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, including but not
limited to the requirement that no ISO shall be granted with an exercise price
less than 100% (110% for an individual described in Section 422(b)(6) of the
Code) of the Fair Market Value of a share of Stock on the date of grant and
granted no more than ten years after the effective date of the Plan. Anything in
the Plan to the contrary notwithstanding, no term of the Plan relating to ISOs
shall be interpreted, amended, or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify either the Plan or any
ISO under Section 422 of the Code, unless requested by the affected Participant.
(iv) Termination of Employment. Unless otherwise determined by the
Committee, upon termination of a Participant's employment with the Company and
its subsidiaries, such Participant may exercise any Options during the
three-month period (or if such termination is by reason of disability, as
determined by the Committee, or death, the one-year period) following such
termination of employment; provided that such period does not exceed the
remaining term of the Option and only to the extent such Option was exercisable
immediately prior to such termination of employment. Notwithstanding the
foregoing, if the Committee determines that such termination is for cause, all
Options held by the Participant shall immediately terminate.
(c) U.K. Stock Option. A U.K. Stock Option may only be granted to a person
who is a natural person employed by the Company or a subsidiary thereof
(including employees who are also directors and including persons expected to
become employees, in which case such Stock Option shall be effective as of the
date such person is first treated as an employee for payroll purposes) and who
at the time of grant of the Stock Option is resident and ordinarily resident in
the United Kingdom for the purposes of the tax laws of the United Kingdom and,
in the case of a person who is a director, is required to devote not less than
25 hours per week to duties to the Company and its subsidiaries. No person who
is, or will be, precluded from being an eligible employee or director with
respect to the Company and its subsidiaries by paragraph 8 of Schedule 9 Taxes
Act 1988 shall be eligible to receive a U.S. Stock Option. The U.K. Stock Option
shall be granted on the following terms and conditions:
(i) Award Agreement. Each U.K. Stock Option shall be clearly designated as
a U.K. Stock Option and shall be evidenced by an Award Agreement in such form as
the Committee may determine from time to time, which agreement shall not require
consideration, but shall be under seal.
(ii) Shares. Shares of Stock purchased pursuant to the exercise of U.K.
Stock Options shall not be redeemable, shall be fully paid upon their issuance
and shall not be subject to any restriction other than those applicable to all
other shares.
(iii) Exercise Price. The exercise price of U.K. Stock Options shall be
fixed by the Committee but no U.K. Stock Option shall be granted with an
exercise price which is less than 100% of the Fair Market Value of the
underlying Stock at the time such U.K. Stock Option is granted.
(iv) Exercise Period. No U.K. Stock Option shall be exercisable more than
10 years after it is granted.
(v) Termination of Employment. Unless otherwise determined by the
Committee, upon termination of a Participant's employment with the Company and
its subsidiaries, such Participant may exercise any U.K. Stock Options during
the three-month period (or if such termination is by reason of disability, as
determined by the Committee, or death, the one-year period) following such
termination of employment; provided such period does not exceed the remaining
term of the U.K. Stock Option and only to the extent such U.K. Stock Option was
exercisable immediately prior to such termination of employment. Notwithstanding
the foregoing, if the Committee determines that such termination is for cause,
all U.K. Stock Options held by the Participant shall immediately terminate.
(vi) Allotment. Within 30 days of the date of exercise of any U.K. Stock
Option, shares of Stock shall be allotted to the Participant or shares of Stock
shall be delivered to the Participant, as the case may be. The allotment or
delivery of the shares shall be evidenced by the issuance of a stock certificate
within 30 days of the date of exercise of such U.K. Stock Option. If a
Participant with respect to a U.K. Stock Option exercises such Stock Option but
does not elect to purchase Stock equal to the full number of shares evidenced by
the Stock Option, the Company shall automatically issue to such Optionee, within
30 days of the date of such exercise, a further U.K. Stock Option Agreement
entitling the Optionee to acquire shares of Stock on terms equivalent to the
U.K. Stock Option so exercised but subject to the limitation that the new U.K.
Stock Option so granted will only be for a number of shares of Stock which, when
aggregated with the shares purchased pursuant to such prior exercises, does not
exceed the number of shares of Stock covered by the partially exercised U.K.
Stock Option.
(vii) Payments. For the avoidance of doubt, a payment with respect to the
exercise of a U.K. Stock Option in the form of a bank draft drawn on a bank
acceptable to the Committee for the full amounts due in the lawful currency of
the United States of America and including any charges for the collection of the
said bank draft shall be considered, at the sole discretion of the Committee, to
be cash.
(viii) Certain Acquisitions. If any person (which shall include another
company) obtains more than 50% of the issued share capital of the Company as a
result of making:
(x) a general offer to acquire the whole of the issued share capital of the
Company which is made on a condition such that if it is satisfied the person
making the offer will have more than 50% of the issued share capital of the
Company; or
(y) a general offer to acquire all of the shares in the Company, then any
U.K. Stock Options granted will be subject to the terms of Section 4(c) of this
Plan.
(ix) Disqualifying Dispositions. If Stock acquired by exercise of a U.K.
Stock Option are sold or otherwise disposed of within two years after the date
of grant of the U.K. Stock Option or within one year after the transfer of such
Stock to the Optionee, the holder of the Stock immediately prior to the
disposition shall promptly notify the Company in writing of the date and terms
of the disposition and shall provide such other information regarding the
disposition as the Company may reasonable require in order to secure any
deduction then available against the Company's or any other corporation's
taxable income.
Any U.K. Stock Option granted to eligible employees or eligible directors
shall be limited and take effect so that the aggregate Fair Market Value of the
Stock subject to such U.K. Stock Option, when aggregated with the Fair Market
Value of the Stock subject to Stock Options previously granted (and which have
not been exercised, canceled or lapsed) to that employee or director, shall not
exceed (pound)30,000.
(x) Fair Market Value. In the event that the Fair Market Value of any Stock
with respect to which a U.K. Stock Option is granted cannot be determined
pursuant to the definition of "Fair Market Value" as set forth in this Plan,
then the proviso in such definition shall not apply unless such Fair Market
Value is agreed to by the Inland Revenue of the United Kingdom.
(xi) Amendments. All amendments to this Plan with respect to U.K. Stock
Options which shall include, without limitation, any variations made by the
Company as provided for in Section 4(b) and 4(c) shall be notified to the Board
of the Inland Revenue within 30 days of the amendments being made and no
amendments shall have effect until approved by the Inland Revenue.
(d) Stock Appreciation Rights. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Participant to whom it is
granted a right to receive, upon exercise thereof, the excess of (A) the Fair
Market Value of one share of Stock on the date of exercise (or, if the Committee
shall so determine in the case of any such right other than one related to an
ISO, the Fair Market Value of one share at any time during a specified period
before or after the date of exercise), over (B) the grant price of the SAR as
determined by the Committee as of the date of grant of the SAR, which, except as
provided in Section 7(a), shall be not less than the Fair Market Value of one
share of Stock on the date of grant.
(ii) Other Terms. The Committee shall determine the time or times at which
an SAR may be exercised in whole or in part, the method of exercise, method of
settlement, form of consideration payable in settlement, method by which Stock
will be delivered or deemed to be delivered to Participants, whether or not an
SAR shall be in tandem with any other Award, and any other terms and conditions
of any SAR. Limited SARs that may only be exercised upon the occurrence of a
Change in Control may be granted on such terms, not inconsistent with this
Section 6(c), as the Committee may determine. Limited SARs may be either
freestanding or in tandem with other Awards.
(e) Restricted Stock. The Committee is authorized to grant Restricted Stock
to Participants on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions, if any, as the Committee
may impose, which restrictions may lapse separately or in combination at such
times, under such circumstances, in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the terms of the
Plan and any Award Agreement relating to the Restricted Stock, a Participant
granted Restricted Stock shall have all of the rights of a stockholder
including, without limitation, the right to vote Restricted Stock or the right
to receive dividends thereon.
(ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service (as determined under criteria established
by the Committee) during the applicable restriction period, Restricted Stock
that is at that time subject to restrictions shall be forfeited and reacquired
by the Company; provided, however, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of termination resulting from specified
causes.
(iii) Certificates for Stock. Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant,
such certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, the Company
shall retain physical possession of the certificate, and the Participant shall
have delivered a stock power to the Company, endorsed in blank, relating to the
Restricted Stock.
(iv) Dividends. Dividends paid on Restricted Stock shall be either paid at
the dividend payment date in cash or in shares of unrestricted Stock having a
Fair Market Value equal to the amount of such dividends, or the payment of such
dividends shall be deferred and/or the amount or value thereof automatically
reinvested in additional Restricted Stock, other Awards, or other investment
vehicles, as the Committee shall determine or permit the Participant to elect.
Stock distributed in connection with a Stock split or Stock dividend, and other
property distributed as a dividend, shall be subject to restrictions and a risk
of forfeiture to the same extent as the Restricted Stock with respect to which
such Stock or other property has been distributed.
(f) Deferred Stock. The Committee is authorized to grant Deferred Stock to
Participants, subject to the following terms and conditions:
(i) Award and Restrictions. Delivery of Stock will occur upon expiration of
the deferral period specified for an Award of Deferred Stock by the Committee
(or, if permitted by the Committee, as elected by the Participant). In addition,
Deferred Stock shall be subject to such restrictions as the Committee may
impose, if any, which restrictions may lapse at the expiration of the deferral
period or at earlier specified times, separately or in combination, in
installments, or otherwise, as the Committee may determine.
(ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service (as determined under criteria established
by the Committee) during the applicable deferral period or portion thereof to
which forfeiture conditions apply (as provided in the Award Agreement evidencing
the Deferred Stock), all Deferred Stock that is at that time subject to deferral
(other than a deferral at the election of the Participant) shall be forfeited;
provided, however, that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Deferred Stock will be waived in whole or
in part in the event of termination resulting from specified causes.
(g) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company obligations to pay cash under other plans or compensatory
arrangements (including the Company's Section 162(m) Cash Bonus Plan). Stock or
Awards granted hereunder shall be subject to such other terms as shall be
determined by the Committee.
(h) Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Stock,
other Awards, or other property equal in value to dividends paid with respect to
a specified number of shares of Stock. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee may
provide that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Stock, Awards, or other
investment vehicles, and subject to such restrictions on transferability and
risks of forfeiture, as the Committee may specify.
(i) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock and factors that may influence
the value of Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Stock, purchase
rights for Stock, Awards with value and payment contingent upon performance of
the Company or any other factors designated by the Committee, and Awards valued
by reference to the book value of Stock or the value of securities of or the
performance of specified subsidiaries. The Committee shall determine the terms
and conditions of such Awards. Stock issued pursuant to an Award in the nature
of a purchase right granted under this Section 6(i) shall be purchased for such
consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Stock, other Awards, or other property, as
the Committee shall determine. Cash awards, as an element of or supplement to
any other Award under the Plan, may be granted pursuant to this Section 6(i).
(j) Non-Employee Directors Options. Upon appointment to the Board and in
three year intervals thereafter, each person who is a Non-Employee Director
shall receive, without the exercise of the discretion of any person, a
non-qualified stock option under the Plan relating to the purchase of 10,000
shares of Stock. In the event that there are not sufficient shares available
under this Plan to allow for the grant to each Non-Employee Director of an
Option for the number of shares provided herein, each Non-Employee Director
shall receive an Option for his pro rata share of the total number of shares of
Stock available under the Plan. The exercise price of each share of Stock
subject to an Option granted to a Non-Employee Director shall equal the Fair
Market Value of a share of Stock on the date such Option is granted. Each such
Option shall have a term of five years from its grant and shall become
exercisable as to 4,000 shares on the first anniversary of the date the Option
is granted, and as to 3,000 shares on each of the second and third anniversaries
thereof. Upon a Non-Employee Director's cessation of service as a Non-Employee
Director, no further Options shall be granted, and each Option then outstanding,
to the extent it was exercisable upon such cessation, shall remain exercisable
for a period of three months, unless otherwise determined by the Board.
7. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for, any other Award
granted under the Plan or any award granted under any other plan of the Company,
any subsidiary, or any business entity to be acquired by the Company or a
subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards.
(b) Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee; provided, however, that in no event shall the
term of any ISO or an SAR granted in tandem therewith exceed a period of ten
years from the date of its grant (or such shorter period as may be applicable
under Section 422 of the Code).
(c) Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a subsidiary
upon the grant or exercise of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock, other
Awards, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in Stock.
(d) Rule 16b-3 Compliance.
(i) Six-Month Holding Period. Unless a Participant could otherwise dispose
of equity securities, including derivative securities, acquired under the Plan
without incurring liability under Section 16(b) of the Exchange Act, equity
securities acquired under the Plan must be held for a period of six months
following the date of such acquisition, provided that this condition shall be
satisfied with respect to a derivative security if at least six months elapse
from the date of acquisition of the derivative security to the date of
disposition of the derivative security (other than upon exercise or conversion)
or its underlying equity security.
(ii) Other Compliance Provisions. With respect to a Participant who is then
subject to Section 16 of the Exchange Act in respect of the Company, the
Committee shall implement transactions under the Plan and administer the Plan in
a manner that will ensure that each transaction by such a Participant is exempt
from liability under Rule 16b-3, except that such a Participant may be permitted
to engage in a non-exempt transaction under the Plan if written notice has been
given to the Participant regarding the non-exempt nature of such transaction.
The Committee may authorize the Company to repurchase any Award or shares of
Stock resulting from any Award in order to prevent a Participant who is subject
to Section 16 of the Exchange Act from incurring liability under Section 16(b).
Unless otherwise specified by the Participant, equity securities, including
derivative securities, acquired under the Plan which are disposed of by a
Participant shall be deemed to be disposed of in the order acquired by the
Participant.
(e) Loan Provisions. With the consent of the Committee, and subject at all
times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee, or arrange for a
loan or loans to a Participant with respect to the exercise of any Option or
other payment in connection with any Award, including the payment by a
Participant of any or all federal, state, or local income or other taxes due in
connection with any Award. Subject to such limitations, the Committee shall have
full authority to decide whether to make a loan or loans hereunder and to
determine the amount, terms, and provisions of any such loan or loans, including
the interest rate to be charged in respect of any such loan or loans, whether
the loan or loans are to be with or without recourse against the borrower, the
terms on which the loan is to be repaid and conditions, if any, under which the
loan or loans may be forgiven.
(f) Performance-Based Awards. The Committee may, in its discretion,
designate any Award the exercisability or settlement of which is subject to the
achievement of performance conditions as a performance-based Award subject to
this Section 7(f), in order to qualify such Award as "qualified
performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder. The performance objectives for an Award subject to this
Section 7(f) shall consist of one or more business criteria and a targeted level
or levels of performance with respect to such criteria, as specified by the
Committee but subject to this Section 7(f). Performance objectives shall be
objective and shall otherwise meet the requirements of Section 162(m)(4)(C) of
the Code and regulations thereunder. Business criteria used by the Committee in
establishing performance objectives for Awards subject to this Section 7(f)
shall be based on the criteria set forth in the Company's Section 162(m) Cash
Bonus Plan. Performance objectives may differ for such Awards to different
Participants. The Committee shall specify the weighting to be given to each
performance objective for purposes of determining the final amount payable with
respect to any such Award. The Committee may, in its discretion, reduce the
amount of a payout otherwise to be made in connection with an Award subject to
this Section 7(f), but may not exercise discretion to increase such amount, and
the Committee may consider other performance criteria in exercising such
discretion. All determinations by the Committee as to the achievement of
performance objectives shall be in writing. For purposes of this Section 7(f),
the Committee shall consist of the individuals who serve on the "Plan Committee"
under the Company's Section 162(m) Cash Bonus Plan.
(g) Acceleration upon a Change of Control. Notwithstanding anything
contained herein to the contrary, all conditions and/or restrictions relating to
the continued performance of services and/or the achievement of performance
objectives with respect to the exercisability or full enjoyment of an Award
shall immediately lapse upon a Change in Control, provided, however, that such
lapse shall not occur if (i) it is intended that the transaction constituting
such Change in Control be accounted for as a pooling of interests under
Accounting Principles Board Option No. 16 (or any successor thereto), and
operation of this Section 7(g) would otherwise violate Paragraph 47(c) thereof,
or (ii) the Committee, in its discretion, determines that such lapse shall not
occur, provided, further, that the Committee shall not have the discretion
granted in clause (ii) if it is intended that the transaction constituting such
Change in Control be accounted for as a pooling of interests under Accounting
Principles Board Option No. 16 (or any successor thereto), and such discretion
would otherwise violate Paragraph 47(c) thereof.
8. General Provisions.
(a) Compliance With Laws and Obligations. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take any
other action under the Plan in a transaction subject to the registration
requirements of the Securities Act of 1933, as amended, or any other federal or
state securities law, any requirement under any listing agreement between the
Company and any national securities exchange or automated quotation system, or
any other law, regulation, or contractual obligation of the Company, until the
Company is satisfied that such laws, regulations, and other obligations of the
Company have been complied with in full. Certificates representing shares of
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be applicable under such laws, regulations, and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.
(b) Limitations on Transferability. Awards and other rights under the Plan
will not be transferable by a Participant except by will or the laws of descent
and distribution or to a Beneficiary in the event of the Participant's death,
shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or
otherwise subject to the claims of creditors, and, in the case of ISOs and SARs
in tandem therewith, shall be exercisable during the lifetime of a Participant
only by such Participant or his guardian or legal representative; provided,
however, that such Awards and other rights (other than ISOs and SARs in tandem
therewith) may be transferred to one or more transferees during the lifetime of
the Participant to the extent and on such terms as then may be permitted by the
Committee.
(c) No Right to Continued Employment. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee the right to be retained in
the employ of the Company or any of its subsidiaries, nor shall it interfere in
any way with the right of the Company or any of its subsidiaries to terminate
any employee's employment at any time.
(d) Taxes. The Company and any subsidiary is authorized to withhold from
any Award granted or to be settled, any delivery of Stock in connection with an
Award, any other payment relating to an Award, or any payroll or other payment
to a Participant amounts of withholding and other taxes due or potentially
payable in connection with any transaction involving an Award, and to take such
other action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations;
in such case, the shares withheld shall be deemed to have been delivered for
purposes of Section 4(a).
(e) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any such action shall be subject to the approval of the Company's stockholders
at or before the next annual meeting of stockholders for which the record date
is after such Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to
him. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate, any Award theretofore granted and any Award
Agreement relating thereto; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under such Award.
(f) No Rights to Awards; No Stockholder Rights. No Participant or employee
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants and employees. No Award
shall confer on any Participant any of the rights of a stockholder of the
Company unless and until Stock is duly issued or transferred and delivered to
the Participant in accordance with the terms of the Award or, in the case of an
Option, the Option is duly exercised.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other compensatory arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.
(i) No Fractional Shares. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) Compliance with Code Section 162(m). It is the intent of the Company
that Options granted with an exercise price per share at least equal to the Fair
Market Value of the Stock on the date the Option is granted, SARs and other
Awards designated as Awards subject to Section 7(f) shall constitute "qualified
performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder. Accordingly, if any provision of the Plan or any Award
Agreement relating to such an Award does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise
payable in connection with any such Award upon attainment of the performance
objectives.
(k) Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the Delaware General Corporation Law, without
giving effect to principles of conflicts of laws, and applicable federal law.
(l) Effective Date; Plan Termination. The Plan shall become effective as of
the date of its adoption by the Board and shall continue in effect until
terminated by the Board, provided, however, that any Awards granted prior to the
approval of such adoption by the Company's stockholders shall be granted
conditional upon such approval.
<PAGE>
EXHIBIT I
HOENIG GROUP INC.
1996 LONG-TERM STOCK INCENTIVE PLAN
Grant Certificate
This Grant Certificate evidences the grant of an option pursuant to the
provisions of the 1996 Long-Term Stock Incentive Plan (the "Plan") of Hoenig
Group Inc. (the "Company") to the individual whose name appears below (the
"Grantee"), covering the specific number of shares of Common Stock of the
Company ("Shares") set forth below, pursuant to the provisions of the Plan and
on the following express terms and conditions:
1. Name of Grantee:
Fredric P. Sapirstein
2. Number of Shares which are subject to this option:
367,500 Shares.
3. Exercise price of Shares subject to this option:
$5.00 per Share.
4. Date of grant of this option:
November 14, 1996.
5. Vesting:
As provided in Section 3(c)(2) of the Employment Agreement dated
September 5, 1996 between the Company and the Grantee (the
"Employment Agreement")
6. Termination date of this option:
November 13, 2006, subject to earlier termination as provided in
Section 3(c)(3) of the Employment Agreement
7. Type of Option:
Non-Qualified Stock Option
The Grantee hereby acknowledges receipt of a copy of the Plan as presently in
effect. The text and all of the terms and provisions of the Plan are
incorporated herein by reference, and this option is subject to such terms and
provisions in all respects, including Section 8(1) of the Plan, which requires
that the grant of this option be conditional on the approval of the Plan by the
Company's stockholders. THEREFORE, NO PORTION OF THIS OPTION SHALL BE
EXERCISABLE PRIOR TO SUCH APPROVAL, AND, SHOULD SUCH APPROVAL NOT BE OBTAINED AT
THE NEXT MEETING OF STOCKHOLDERS, THIS OPTION, AND ALL RIGHTS WITH RESPECT
THERETO, SHALL BE NULL AND VOID. The grantee further acknowledges that the grant
of this option is in satisfaction of the Company's obligation to grant a
"Performance Option" under clause (ii) of Section 3(c)(2) of the Employment
Agreement.
At any time when the Grantee wishes to exercise this option, in whole or in
part, the Grantee shall submit to the Company a written notice of exercise,
specifying the exercise date and the number of shares to be exercised, and shall
remit to the Company the exercise price.
HOENIG GROUP INC. AGREED TO AND ACCEPTED BY:
By: /s/ Alan B. Herzog /s/ Fredric P. Sapirstein
------------------------ ------------------------
Name: Alan B. Herzog Grantee
Title: Chief Operating Officer
