Exhibit 10.1

 

MUNICIPAL MORTGAGE & EQUITY, LLC

 

Non-Qualified Stock Option Agreement

 

THIS OPTION AGREEMENT (this “Agreement”), dated as of April 24th, 2012 (the
“Grant Date”), is made by and between MUNICIPAL MORTGAGE & EQUITY, LLC, a
Delaware limited liability company (the “Company”), and MICHAEL L. FALCONE (the
“Optionee”).

 

WHEREAS, the Optionee is currently employed by MMA Financial, Inc., a
wholly-owned subsidiary of the Company (the “Employer”);

 

WHEREAS, in consideration of the continued employment of the Optionee with the
Employer, on March 26, 2012 the Compensation Committee (the “Committee”) of the
Company authorized the grant to the Optionee of the right to purchase the number
of common shares, no par value per share, of the Company (the “Common Shares”),
specified below on the terms and conditions set forth herein;

 

WHEREAS, the Committee authorized the grant to Optionee of options to purchase
700,000 of the Company’s Common Shares based on the closing price on the date of
the Committee’s approval (the “Authorization Date”), such award to be deemed
granted and effective only upon the execution by Employee and the Company of a
grant agreement approved by the Committee, such shares to be issued from and
subject to the terms of the Company’s 2004 and 2010 Share Incentive Plans
(collectively, the “Plan”);

 

WHEREAS, this Agreement constitutes the grant agreement required by the
Committee;

 

WHEREAS, the Company has reserved Common Shares for such issuance pursuant to
the Plan; and

 

WHEREAS, the Committee has also approved the grant to Optionee of a cash bonus
to be used to purchase Common Shares.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged:

 

1.           Grant.

 

(a)          Option. Effective as of the Grant Date, the Company hereby grants
to the Optionee an option (the “Option”) to purchase 700,000 Common Shares (the
“Option Shares”) under and pursuant to the Plan at an exercise price of $.36 per
Common Share (the closing price for the Common Shares on the Authorization
Date). The source of 270,703 of the option shares shall be the 2004 Share
Incentive Plan and the remainder shall be sourced from the 2010 Share Incentive
Plan. The Option is not intended to constitute an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

 

(b)          Cash. The Company hereby grants to Optionee a cash bonus in the
amount of $45,000, payable at the end of the first complete pay period following
the date of this Agreement. Optionee agrees to use the entire cash bonus to
purchase Common Shares within six (6) months of the date hereof, subject,
however, to extension by the Committee in the event Optionee shall be unable to
make such purchases due to the imposition of a “blackout” period under
applicable securities laws or as otherwise reasonably determined by the
Company’s counsel.

 

 

 

 

2.           Conformity with the Plan. The Option is being granted to the
Optionee under and is intended to conform in all respects with the Plan, a copy
of which has been furnished to Employee and all of the terms, conditions, and
other provisions of which are hereby incorporated by reference herein. The
Optionee hereby acknowledges receipt of the Plan and agrees to be bound by all
the terms and provisions thereof (as presently in effect or hereafter amended).
Capitalized terms used in this Agreement but not defined herein shall have the
meaning ascribed to such terms in the Plan. In the event of any ambiguity in
this Agreement or any matters as to which the Agreement is silent, the Plan
shall govern including, without limitation, the provisions thereof pursuant to
which the Company’s Board of Directors has the power, among others, to (i)
interpret the Plan and option agreements related thereto, (ii) prescribe, amend
and rescind rules and regulations relating to the Plan and (iii) make all other
determinations deemed necessary or advisable for the administration of the Plan.

 

3.           Exercisability of the Option.

 

(a)          Exercisability of the Option Generally. The Option may be exercised
only after it has become exercisable, to the extent that it has become and
remains exercisable, as specified in this Agreement. The Option Shares shall be
divided into two groups, 400,000 of which shall become vested and exercisable as
set forth in paragraph 3(a)(i) and 300,000 of which shall become vested and
exercisable as set forth in Section 3(a)(ii); provided, however, that no Option
Shares shall vest on any given vesting date if Optionee shall not have been in
the continuous employ of the Employer or a subsidiary of the Employer from the
date hereof to the applicable vesting date (the “Vesting Condition”); provided,
further, however, that the Option shall become fully exercisable upon the death
or Disability (defined below) of the Optionee; and provided further, that the
Option shall be exercisable after the Optionee ceases to be employed by the
Employer for any reason other than the Optionee’s death or disability only to
the extent that the Option was exercisable at the date of, or as a result of,
such cessation of service. The Optionee shall be considered to have a
“Disability” if the Optionee is unable to perform the duties assigned to the
Optionee by the Employer due to illness, physical or mental disability or other
incapacity for a total of 120 or more business days during any twelve month
period.

 

(i)          Subject to forfeiture as provided herein or in the Plan, 400,000 of
the Option Shares shall vest in four equal increments of 100,000 shares on the
Grant Date and on each of the first, second and third anniversaries of the Grant
Date provided that Optionee meets the Vesting Condition on each such date.

 

(ii)         Subject to forfeiture as provided herein or in the Plan, 300,000 of
the Option Shares shall vest in 60,000 share increments upon the attainment of
increases in the price of the Company’s Common Shares, as follows:

 

Target Price   Vesting         $1.00    60,000 Option Shares           $1.50  
 60,000 Option Shares           $2.00    60,000 Option Shares           $2.50  
 60,000 Option Shares           $3.00    60,000 Option Shares 

 

Achievement of the target price shall be based on the average closing price of
the Company’s Common Shares for thirty consecutive trading days. If the target
price is achieved for such thirty day period, the designated shares shall vest
on the thirtieth trading day. The Option Shares so vested shall not be forfeited
if the stock price thereafter drops below the target price at which they vested.

 

(b)          Acceleration of Exercisability on a Discretionary Basis and Upon
Change in Control. The provisions of Section 3(a) hereof notwithstanding, the
Committee may, in its sole discretion, at any time, upon written notice to the
Optionee, accelerate the exercisability of all or a specified portion of the
Option. In addition, in the event of a Change in Control of the Company at a
time that the Optionee is employed by the Employer or any of its affiliates, the
Option shall become immediately and fully exercisable upon the occurrence of
such Change in Control.

 

 

 

 

(c)          Option Cumulatively Exercisable; Fractional Shares. The number of
Option Shares with respect to which the Option may be exercised shall be
cumulative so that if, in any of the aforementioned periods, the full number of
vested Option Shares shall not have been purchased, any such unpurchased Shares
shall continue to be included in the number of Option Shares with respect to
which the Option shall then be exercisable along with any other Option Shares as
to which the Option may become exercisable in accordance with the terms hereof.
The Option may be exercised only to purchase whole shares, and no fractional
shares will be issued upon exercise of the Option.

 

4.           Exercise and Payment of Exercise of Price.

 

(a)          Notice of Exercisability; Method of Payment of Exercise Price. The
Option shall be exercised by the delivery of written notice of exercise, in the
form attached hereto as Exhibit A (the “Exercise Notice”) or as otherwise
specified by the Company (with appropriate changes if notice is given by a
person other than the Optionee), to the Secretary of the Company, signed by the
Optionee or other person entitled to exercise the Option, specifying the number
of Option Shares to be purchased, the date of grant of the Option, the method of
payment, and other information required by such notice. The Exercise Notice
shall be accompanied by payment in full of the aggregate exercise price for all
such Option Shares being purchased. Such exercise price shall be payable to the
Company either (i) in cash (including by check), (ii) by the tendering of
previously acquired Common Shares owned by the Optionee for more than six months
and having an aggregate Fair Market Value (as defined in the Plan) at the date
of exercise equal to the exercise price being paid thereby, or (iii) by a
combination of (i) and (ii).

 

(b)          Delivery of Option Shares. An exercise of the Option shall be
effective upon receipt by the Secretary of the Company of both the written
notice and payment of the exercise price (each, an “Exercise Date”). Within an
administratively reasonable amount of time after the Exercise Date, the Company
shall either (i) deliver a certificate or certificates representing the
purchased Option Shares, with any appropriate legend(s) affixed thereto, to the
Optionee or such other person as may be entitled thereto at the principal office
of the Company or such other place as may be mutually agreed upon by the Company
and the Optionee or such other person or deposit or (ii) deliver or cause to be
delivered to the Optionee or Optionee's designated broker a certificate or
letter of electronic transfer instructions (“DWAC”) for the purchased Option
Shares. The Company agrees to pay all original issue or stock transfer taxes, if
any, on the exercise of the Option and all other fees and expenses necessarily
incurred by the Company in connection therewith; provided, however, that
expenses of the Optionee, including withholding and other tax obligations, shall
not be deemed Company expenses.

 

5.           Expiration of the Option. The Option will expire at the earlier of
(i) 11:59 p.m. Eastern Standard Time on the tenth anniversary of the Grant Date
or (ii) 12 months after the date on which the Optionee ceases to be employed by
the Employer for any reason.

 

6.           Nontransferability; Beneficiaries. No right or interest of the
Optionee in the Option shall be pledged, encumbered, or hypothecated to or in
favor of any third party or shall be subject to any lien, obligation, or
liability of the Optionee to any third party. The Option shall not be
transferable to any third party by the Optionee except by will or the laws of
descent and distribution, and the Option shall be exercisable, during the
lifetime of the Optionee, only by the Optionee or his or her guardian or legal
representative; provided, however, that, subject to Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended, and consistent with the
registration of the offer and sale of the Common Shares related thereto on a
then-effective registration statement on Form S-8 covering the offer and sale of
Common Shares issued under the Plan filed with the Securities and Exchange
Commission (the “SEC”), the Optionee will be entitled to transfer the Option
(and rights relating thereto) to one or more trusts or other beneficiaries,
designated by the Optionee by filing the form attached hereto as Exhibit B or
such other form as may be specified by the Company, during the Optionee’s
lifetime for estate planning purposes or upon the Optionee’s death.

 

 

 

 

7.           Investment Representation; Legends. Unless, at the time of any
exercise of the Option, the offer and sale of Option Shares hereunder to the
Optionee is registered under a then-effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), and the offer and
sale complies with all applicable registration requirements under state
securities laws, the Optionee shall provide to the Company, as a condition to
the valid exercise of the Option and the delivery of any certificates
representing Shares, appropriate evidence, satisfactory in form and substance to
the Company, that the Grantee is acquiring the Option Shares for investment and
not with a view to the distribution of the Option Shares or any interest in the
Option Shares, and a representation to the effect that the Optionee shall make
no sale or other disposition of the Option Shares unless (i) the Company shall
have received an opinion of counsel satisfactory to it in form and substance
that such sale or other disposition may be made without registration under the
then-applicable provisions of the Securities Act, the related rules and
regulations of the SEC, and applicable state securities laws and regulations, or
(ii) the sale or other disposition of the Option Shares shall be registered
under a then-effective registration statement under the Securities Act and
complies with all applicable registration requirements under state securities
laws. The certificates representing the Option Shares may bear an appropriate
legend giving notice of the foregoing restriction on transfer of the Option
Shares and any other restrictive legend deemed necessary or appropriate by the
Company.

 

8.           Compliance with Section 409A. The Option is not intended to provide
deferred compensation subject to Section 409A of the Code; provided, however,
that the Company makes no representations as to the tax consequences of the
Option to the Optionee (including, without limitation, under Section 409A of the
Code, if applicable). The Optionee understands and agrees that the Optionee is
solely responsible for any and all income, excise or other taxes imposed on the
Optionee with respect to the Option.

 

9.           No Rights of Holder of Common Shares. The Optionee shall not have
any of the rights of a holder of Common Shares with respect to the Option Shares
that may be issued upon the exercise of the Option until such Option Shares have
been issued upon the due exercise of the Option.

 

10.          Miscellaneous. This Agreement shall be binding upon the heirs,
executors, administrators, and successors of the parties. In particular, the
Optionee’s heirs, executors, administrators, and successors shall be subject to
the terms and conditions of the Plan and this Agreement, and the Company may
require any such person to execute an agreement or other documents acknowledging
and agreeing to such terms and conditions as a condition precedent to any
transfer of the Option or any Common Shares purchased upon exercise of the
Option into the name of any such person. This Agreement constitutes the entire
agreement between the parties with respect to the Option and the Option Shares,
and supersedes any prior agreements or documents with respect thereto, and in
the event of a conflict between the provisions of this Agreement and the
provisions of the Plan or any other agreement between the Company and any of its
affiliates, on the one hand, and the Optionee, on the other hand, the provisions
of the Plan shall govern. This Agreement may be amended, but no amendment,
alteration, suspension, discontinuation, or termination of this Agreement which
may impose any additional obligation upon the Company or impair the rights of
the Optionee with respect to the Option shall be valid unless in each instance
such amendment, alteration, suspension, discontinuation, or termination is
expressed in a written instrument duly executed in the name and on behalf of the
Company and by the Optionee.

 

11.          No Other Awards. The Company and Optionee agree that this award
replaces and supersedes any awards previously approved by the Compensation
Committee that have not heretofore been set forth in a fully-executed grant,
share award, or similar agreement.

 

(Signatures appear on following page)

 

 

 

 

MUNICIPAL MORTGAGE & EQUITY, LLC

 

  By: /s/Lisa Roberts     Lisa Roberts     Chief Financial Officer         Date:
April 24, 2012         EMPLOYEE/OPTIONEE:         /s/Michael L. Falcone  
Michael L. Falcone         Date: April 24, 2012

 

APPROVED:       COMPENSATION COMMITTEE         By: /s/Douglas McGregor    
Douglas McGregor     Chairman