Exhibit 10.2

 

EXHIBIT A

 

GLEACHER & COMPANY, INC.

 

2007 INCENTIVE COMPENSATION PLAN
STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (this “Agreement”) confirms the grant on
            , 2011 (the “Grant Date”) by Gleacher & Company, Inc., a Delaware
corporation (the “Company”), to John Griff (“Employee”) of non-qualified options
(“Options”) to acquire shares of the Company’s common stock (“Shares”), as
follows:

 

Number of Shares Covered by Option Granted:  1,000,000

 

How Options Vest and Become Exercisable:  33-1/3% of the Options if not
previously forfeited will vest and become exercisable on the first anniversary
of the Grant Date; 33-1/3% of the Options, if not previously forfeited, will
vest and become exercisable on the second anniversary of the Grant Date; and
33-1/3% of the Options, if not previously forfeited, will vest and become
exercisable on the third anniversary of the Grant Date; provided in each case
that Employee continues to be employed by the Company or another Group Entity
(sometimes referred to herein as an “Employer”) on such vesting date (each, a
“Stated Vesting Date”), except as otherwise provided in Section 4 of the Terms
and Conditions of Stock Options attached hereto (the “Terms and Conditions”). 
If Employee has a Termination of Employment prior to a Stated Vesting Date, any
Options that are not otherwise vested and exercisable by that date, will be
immediately forfeited, except as otherwise provided in Section 4 of the Terms
and Conditions.

 

Exercise Prices of the Options:  The exercise price per Share of the Options
will be $[·].

 

Duration of the Options:  Except as otherwise provided in Section 4 of the Terms
and Conditions, if not previously forfeited, the Options shall expire and shall
no longer be exercisable after the expiration of six years from the Grant Date.

 

The Options are subject to the terms and conditions of the Company’s 2007
Incentive Compensation Plan (the “Plan”), and this Agreement, including the
Terms and Conditions attached hereto.  The number of Options, the number and
kind of Shares deliverable upon exercise of Options, and other terms relating to
the Options are subject to adjustment in accordance with Section 5 of the Terms
and Conditions and Section 5.3 of the Plan.

 

Employee acknowledges and agrees that (i) the Options are nontransferable,
except as provided in Section 3 of the Terms and Conditions and Section 9.2 of
the Plan, (ii) the Options are subject to forfeiture upon Employee’s Termination
of

 

Exhibit A

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Employment as set forth in Section 4 of the Terms and Conditions, and
(iii) sales of Shares delivered in settlement of Options will be subject to the
Company’s policies regulating trading by employees.

 

IN WITNESS WHEREOF, GLEACHER & COMPANY, INC. has caused this agreement to be
executed by its officer thereunto duly authorized, and Employee has duly
executed this Agreement, by which each has agreed to the terms of this
Agreement.

 

 

EMPLOYEE:

 

GLEACHER & COMPANY, INC.

 

 

 

 

 

 

 

 

By:

 

John Griff

 

 

Thomas J. Hughes

 

 

 

Chief Executive Officer

 

TERMS AND CONDITIONS OF STOCK OPTIONS

 

The following Terms and Conditions apply to the Options granted to Employee by
the Company, as specified in the Agreement (of which these Terms and Conditions
form a part).  Certain terms of the Options, including the number of Options
granted, vesting dates and expiration date, are set forth in the Agreement.

 

1.                                       GENERAL.  The Options are granted to
Employee under the Company’s 2007 Incentive Compensation Plan (the “Plan”).  A
copy of the Plan and information regarding the Plan, including documents that
constitute the “Prospectus” for the Plan under the Securities Act of 1933, can
be obtained from the Company upon request.  All of the applicable terms,
conditions and other provisions of the Plan are incorporated by reference
herein.  Capitalized terms used in the Agreement and these Terms and Conditions
but not defined herein shall have the same meanings as in the Plan.  If there is
any conflict between the provisions of the Agreement and this Terms and
Conditions and mandatory provisions of the Plan, the provisions of the Plan
govern, otherwise, the terms of this document shall prevail.  By accepting the
grant of the Options, Employee agrees to be bound by all of the terms and
provisions of the Plan (as presently in effect or later amended), the rules and
regulations under the Plan adopted from time to time, and the decisions and
determinations of the Company’s Executive

 

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Compensation Committee (the “Committee”) made from time to time; provided that
no such Plan amendment, rule or regulation or Committee decision or
determination without the consent of an affected Participant shall materially
impair the rights of Employee with respect to the Options.

 

2.                                       TIME AND METHOD OF EXERCISE.  At any
time while any portion of the Options remain vested and exercisable, Employee
may exercise such vested Options in whole or in part by delivering to the
Company written notice of exercise and payment of the exercise price.  Such
exercise price may be paid (i) in cash, by check or in another cash equivalent
acceptable to the Company, (ii) by transfer to the Company of nonforfeitable,
unrestricted Shares held by Employee, (iii) through broker-assisted “cashless”
exercise arrangements, to the extent permissible under applicable law, (iv) by
any other method permitted under the Plan and under rules established by the
Committee and in effect from time to time, or (v) by a combination of the
foregoing.

 

3.                                       NONTRANSFERABILITY.  Employee may not
sell, transfer, assign, pledge, margin or otherwise encumber or dispose of
Options or any rights hereunder to any third party other than by will or the
laws of descent and distribution (or to a designated Beneficiary in the event of
Employee’s death), and Options, if exercisable, shall be exercisable during the
lifetime of Employee only by Employee or his guardian or legal representative.

 

4.                                       TERMINATION PROVISIONS.  The following
provisions will govern the forfeiture of the Options upon the occurrence of
certain events relating to a Termination of Employment, unless otherwise
determined by the Committee:

 

(a)                                  Death or Disability.  In the event of
Employee’s death or Disability (as defined below), all Options then outstanding,
if not previously vested, will become vested and exercisable, and all
then-outstanding Options will remain exercisable through the earlier of (i) the
applicable expiration date set forth in the Agreement or (ii) the first
anniversary of the date of the Termination of Employment; provided that, in the
case of Disability, Employee (or his legal representative) executes and does not
revoke a release and separation agreement in such form as may be requested by
the Company within 45 days following the date of such Termination of Employment;
provided, however, that any vested and unexercised Options will subsequently be
forfeited if there occurs a Forfeiture Event (as defined below) prior to the
occurrence of the earlier of the dates determined in accordance with clauses
(i) and (ii) above.

 

(b)                                 Termination by Employee for Good Reason or
by the Company without Cause following a Change in Control.  In the event of
(i) Employee’s Termination of Employment by Employee for Good Reason (as defined
below) or (ii) Employee’s Termination of Employment by the Company without Cause
(as defined below) during the two-year period immediately following a Change in
Control (as defined below), the portion of the then-outstanding Options not
vested as of the date of such Termination of Employment

 

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shall, subject to Employee executing and not revoking a release and separation
agreement in such form as may be requested by the Company within 45 days
following the date of Termination of Employment, accelerate and, all then-
outstanding Options will remain exercisable through the earlier of (A) the
applicable expiration date set forth in the Agreement or (B) the first
anniversary of the date of the Termination of Employment; provided, however,
that any vested and unexercised Options will subsequently be forfeited if there
occurs a Forfeiture Event prior to the occurrence of the earlier of the dates
determined in accordance with clauses (A) and (B) above.

 

(c)                                  Termination by Employee without Good Reason
or by the Company without Cause prior to a Change in Control.  In the event of
Employee’s Termination of Employment by the Company without Cause prior to a
Change in Control or by the Employee without Good Reason, the portion of the
then-outstanding Options not vested at the date of such Termination will be
forfeited, and the portion of the then-outstanding Options vested at the date of
such Termination will remain exercisable until the earliest of (i) the
applicable expiration date set forth in the Agreement, or (ii) with respect to
(A) a Termination of Employment by Employee without Good Reason, the 90th day
following the date of such Termination of Employment and (B) a Termination of
Employment by the Company without Cause prior to a Change in Control, the first
anniversary of the date of such Termination of Employment; provided, however,
that any vested and unexercised Options will subsequently be forfeited if there
occurs a Forfeiture Event prior to the occurrence of the earlier of the dates
determined in accordance with clauses (i) and (ii) above.

 

(d)                                 Termination by the Company for Cause.  In
the event of Employee’s Termination of Employment by the Company for Cause, all
then-outstanding Options, whether vested or unvested, shall be immediately
forfeited for no consideration.

 

5.                                       SHAREHOLDER’S RIGHTS, DIVIDENDS AND
ADJUSTMENTS.

 

(a)                                  Shareholder’s Rights and Dividends. 
Employee will have no rights as a shareholder, and will not be entitled to any
dividends declared or paid, with respect to any Share underlying an Option
unless and until such Share is issued to Employee upon the proper exercise of
such Option.

 

(b)                                 Adjustments.  The number of Options granted
to Employee, the number of Shares underlying such Options and/or the exercise
price per Share of such Options shall be appropriately adjusted, in order to
prevent dilution or enlargement of Employee’s rights with respect to such
Options and Shares or to reflect any changes in the number of outstanding Shares
resulting from any event referred to in Section 5.3 of the Plan.

 

6.                                       EMPLOYEE REPRESENTATIONS AND WARRANTIES
AND RELEASE.  As a condition to any exercise of the Options, the Company may
require

 

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Employee (i) to make any representation or warranty to the Company as may be
required under any applicable law or regulation, (ii) to make a representation
and warranty that no Forfeiture Event has occurred or is contemplated and
(iii) to execute a release of claims against the Company arising before the date
of such release, in such form as may be specified by the Company.

 

7.                                       OTHER TERMS RELATING TO OPTIONS.

 

(a)                                  Deferral of Settlement.  No settlement of
the exercise of an Option may be deferred hereunder.

 

(b)                                 Fractional Options and Shares.  The number
of Shares underlying Options credited to Employee shall not include fractional
shares, unless otherwise determined by the Committee.

 

(c)                                  Tax Withholding.  Employee shall make
arrangements satisfactory to the Company, or, in the absence of such
arrangements, a Group Entity may deduct from any payment to be made to Employee
any amount necessary, to satisfy requirements of federal, state, local, or
foreign tax law to withhold taxes or other amounts with respect to the exercise
of the Options.  Unless Employee has made separate arrangements satisfactory to
the Company, the Company may elect to withhold Shares deliverable in settlement
of the Options having a Fair Market Value equal to the amount of such tax
liability required to be withheld in connection with the exercise of the
Options, but the company shall not be obligated to withhold such Shares.

 

8.                                       MISCELLANEOUS.

 

(a)                                  Binding Agreement; Written Amendments. 
This Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties.  This Agreement and the Plan constitute the entire
agreement between the parties with respect to the Options, and supersede any
prior agreements or documents with respect thereto.  No amendment, alteration,
suspension, discontinuation, or termination of this Agreement that may impose
any additional obligation upon the Company or materially impair the rights of
Employee with respect to the Options 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 Employee.

 

(b)                                 No Promise of Employment.  The Options and
the granting thereof shall not constitute or be evidence of any agreement or
understanding, express or implied, that Employee has a right to continue as an
officer or employee of the Company for any period of time, or at any particular
rate of compensation.

 

(c)                                  Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.

 

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(d)                                 Legal Compliance.  Employee agrees to take
any action the Company reasonably deems necessary in order to comply with
federal and state laws, or the rules and regulations of the NASDAQ Global Market
or any other stock exchange, or any other obligation of the Company or Employee
relating to the Options or this Agreement.  Employee agrees that the Options are
subject to any forfeiture that may be required by applicable law, as well as any
policies of the Company, including, without limitation, any stock ownership
guidelines and incentive compensation clawback policy applicable to senior
executives of the Company, as each policy is adopted or amended from time to
time.

 

(e)                                  Notices.  Any notice to be given the
Company under this Agreement shall be addressed to the Company at 1290 Avenue of
the Americas, New York, New York 10104, Attention: Corporate Secretary, and any
notice to the Employee shall be addressed to the Employee at Employee’s address
as then appearing in the records of the Company.

 

9.                                       CERTAIN DEFINITIONS.  The following
definitions apply for purposes of this Agreement:

 

(a)                                  “Cause” means: (i) Employee’s conviction
of, or plea of guilty or “no contest” to, any felony; (ii) Employee’s conviction
of, or plea of guilty or “no contest” to, a violation of criminal law involving
the Company and its business; (iii) Employee’s commission of an act of fraud or
theft, or material dishonesty in connection with the performance of his duties
to the Company and its Affiliates; or (iv) Employee’s willful refusal or gross
neglect to perform the duties reasonably assigned to him and consistent with his
position with the Company and its Affiliates or otherwise to comply with the
material terms of any agreement between the Company or any of its Affiliates and
Employee, which refusal or gross neglect continues for more than fifteen (15)
days after Employee receives written notice thereof from the Company providing
reasonable detail of the asserted refusal or gross neglect (and which is not due
to a physical or mental impairment).

 

(b)                                 “Change in Control” means the first to occur
of the following events:

 

(i)                                     The acquisition, after the Effective
Date, by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of either (i) the shares of Company Common Stock (the “Common Stock”), or
(ii) the combined voting power of the voting securities of the Company entitled
to vote generally in the election of directors (the “Voting Securities”);
provided, however, that the following acquisitions shall not constitute a Change
in Control: (A) any acquisition by any individual, entity or group (within
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) who, on the
Effective Date, beneficially owned 10% or more of the Common Stock, (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, (C) any

 

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acquisition by any underwriter in connection with any firm commitment
underwriting of securities to be issued by the Company, or (D) any acquisition
by any corporation (or other entity) if, immediately following such acquisition,
more than 50% of the then outstanding shares of common stock of such corporation
(or other entity) and the combined voting power of the then outstanding voting
securities of such corporation (or other entity) entitled to vote generally in
the election of directors, is beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who, immediately prior to
such acquisition, were the beneficial owners of the Common Stock and the Voting
Securities in substantially the same proportions, respectively, as their
ownership, immediately prior to such acquisition, of the Common Stock and Voting
Securities; or

 

(ii)                                  Individuals who, as of the Effective Date,
constitute the Board (the “Incumbent Board”) cease thereafter for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose election,
or nomination for election by the Company’s shareholders, was approved by at
least a majority of the directors then serving and comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents; or

 

(iii)                               Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company (a “Corporate Transaction”), other than a Corporate
Transaction with respect to which all or substantially all of the individuals
and entities who were the beneficial owners, immediately prior to such Corporate
Transaction, of the Common Stock and Voting Securities beneficially own,
directly or indirectly, immediately after such Corporate Transaction, more than
50% of the then outstanding common stock and voting securities (entitled to vote
generally in the election of directors) of the corporation (or other entity)
resulting from Corporate Transaction in substantially the same proportions as
their respective ownership, immediately prior to such Corporate Transaction, of
the Common Stock and the Voting Securities; or

 

(iv)                              Approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company.

 

(c)                                  “Disability” means disability as defined in
the Company’s long-term disability plan as in effect from time to time.

 

(d)                                 “Forfeiture Event” means without the consent
in writing of the Board of Directors of the Company, Employee will not, at any
time prior to an applicable Stated Vesting Date or exercise of vested Options,
acting alone or in

 

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conjunction with others, directly or indirectly, (A) induce any customer or
client of or investor (excluding anyone who is an investor solely as a holder of
Company common stock ) in any Group Entity, to curtail, limit, or cancel their
business with any Group Entity; (B) induce, or attempt to influence, any
employee of any Group Entity to terminate employment; (C) solicit, hire or
retain as an employee or independent contractor, or assist any third party in
the solicitation, hire, or retention as an employee or independent contractor,
any person who during the previous 12 months was an employee of any Group
Entity; (D) otherwise fail to comply with the conditions set forth in Sections
7.4(b) and (c) of the Plan or (E) breach the covenants contained in the Letter
Agreement and, for purposes of this clause (E), such covenants shall remain in
effect and continue to apply through the later of the Stated Vesting Date or
exercise of vested Options, notwithstanding any earlier expiration of such
covenants for purposes of the Letter Agreement.

 

(e)                                  “Good Reason” means without Employee’s
prior written consent:  (i) a material reduction in his Annual Base Salary (as
defined in the Letter Agreement); (ii) the assignment to Employee of duties or
responsibilities that represent a material diminution from the duties or
responsibilities associated with the position of Chief Operating Officer; or
(iii) the relocation of Employee’s primary place of employment to a location 50
or more miles from the Company’s headquarters.  In order to invoke a termination
for Good Reason, Employee must provide written notice to the Company of the
existence of one or more of the conditions described in clauses (i) through
(iii) within thirty (30) days following the initial existence of such condition
or conditions, and the Company shall have thirty (30) days following receipt of
such written notice (the “Cure Period”) during which it may remedy the
condition.  In the event that the Company fails to remedy the condition
constituting Good Reason during the Cure Period, Employee must terminate
employment, if at all, within 90 days following the Cure Period in order for
such termination to constitute a termination for Good Reason.

 

(f)                                    “Group Entity” means either the Company
or any of its subsidiaries and affiliates.

 

(g)                                 “Letter Agreement” means that certain letter
agreement entered into by and between Employee and the Company dated July 7,
2011.

 

(h)                                 “Termination of Employment” means the event
by which Employee ceases to be employed by a Group Entity and immediately
thereafter is not employed by any other Group Entity.

 

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