EXHIBIT 10.2
LADENBURG THALMANN FINANCIAL SERVICES INC.
4400 Biscayne Boulevard, 12th Floor
Miami, Florida 33137
October 19, 2007
Mr. Bruce Zwigard
c/o Investacorp, Inc.
15450 New Barn Road
Miami Lakes, Florida 33014
Dear Mr. Zwigard:
     We are pleased to inform you that Ladenburg Thalmann Financial Services
Inc. (the “Company”) has granted you a nonqualified option (the “Option”) to
purchase 3,000,000 shares of the Company’s common stock, par value $.0001 per
share (the “Common Stock”), at a purchase price of $1.91 per share (any of the
underlying shares of Common Stock to be issued upon exercise of the Option are
referred to hereinafter as the “Shares”). Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them in the
employment agreement of even date herewith between you and the Company
(“Employment Agreement”).
     1. Subject to the terms hereof, the Option may be exercised on or prior to
October 19, 2017 (after which date the Option will, to the extent not previously
exercised, expire). The Option shall vest and become exercisable as to 1,000,000
of the Shares on and after each of October 19, 2008, 2009 and 2010, provided you
are then employed by the Company and/or one of its present or future
subsidiaries or affiliates (for purposes of this letter agreement (this
“Agreement”), any other entity controlling, controlled by, or under common
control with, the Company); provided, however, that the entire Option shall vest
earlier and become immediately exercisable in the event (a) that your employment
under the Employment Agreement is terminated by reason of your death or
Disability, (b) that your employment under the Employment Agreement is
terminated by the Board without Cause, (c) that your employment under the
Employment Agreement is terminated by you for Good Reason, (d) you duly
accelerate the Note in accordance with its terms or (e) of any Change in Control
(the foregoing (a) through (e) are collectively referred to herein as “Vesting
Events”).
     2. The Option, from and after the date it vests and becomes exercisable
pursuant to Section 1 hereof, may be exercised in whole or in part by delivering
to the Company a written notice of exercise in the form attached hereto as
Exhibit A (or such other form approved by the Company), specifying the number of
the Shares to be purchased and the purchase price therefor, together with
payment of the purchase price of the Shares to be purchased. The purchase price
is to be paid in cash or, with the prior approval of the Compensation Committee
of the Company’s

 

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Mr. Bruce Zwigard
October 19, 2007
Page 2
Board of Directors, by delivering shares of Common Stock already owned by you
for at least six months and having a Fair Market Value (as hereinafter defined)
on the date of exercise equal to the purchase price of the Option being
exercised, or a combination of such shares and cash. For purposes of the
immediately preceding sentence, the term “Fair Market Value” means as of any
given date: (i) if the Common Stock is listed on a national securities exchange,
the last sale price of the Common Stock in the principal trading market for the
Common Stock as reported by the exchange; (ii) if the Common Stock is not listed
on a national securities exchange, but is traded in the over-the-counter market,
the closing bid price for the Common Stock; and (iii) if the fair market value
of the Common Stock cannot be determined pursuant to clause (i) or (ii) above,
such price as the Compensation Committee shall determine, in good faith.
          In addition, payment of the purchase price of the Shares to be
purchased may also be made by delivering a properly executed notice to the
Company, together with a copy of the irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds necessary to
pay the purchase price, and, if required, the amount of any federal, state and
local withholding taxes.
          No Shares shall be issued until full payment therefor has been made.
You shall have all of the rights of a stockholder of the Company holding the
Common Stock that is subject to the Option (including, if applicable, the right
to vote the Shares and the right to receive dividends thereon), when you have
given written notice of exercise, have paid the Company in full for such Shares
and, if requested, have given the certificate described in Section 8 hereof.
     3. In the event your employment under the Employment Agreement is
terminated by the Board with Cause or by you without Good Reason, the Option
shall forthwith terminate; provided that, notwithstanding anything to the
contrary in this Agreement, (i) if a Vesting Event has occurred, or your
employment has terminated upon or following expiration of the stated initial
three-year term of your Employment Agreement, you may exercise any then
unexercised portion of the Option prior to the expiration of the Option on
October 19, 2017, and (ii) if your employment is terminated by you without Good
Reason at any time, you may exercise any then unexercised portion of the Option
then vested and exercisable pursuant to Section 1 hereof prior to the expiration
of the Option on October 19, 2017. In the event of your death or Disability, the
Option may be exercised by your personal representative or representatives or by
the person or persons to whom your rights under the Option shall pass by will or
by the applicable laws of descent and distribution.
     4. The Option is not transferable except by will or the applicable laws of
descent and distribution. Notwithstanding the foregoing, with the prior approval
of the Compensation Committee of the Company’s Board of Directors (which prior
approval shall not be unreasonably withheld or delayed), you may transfer the
Option (i) (A) by gift, for no consideration, or (B) pursuant to a domestic
relations order, in either case, to or for the benefit of your “Immediate
Family” (as defined below), or (ii) to an entity in which you and/or members of
your Immediate Family collectively own more than fifty percent of the voting
interest, in exchange for an interest in that entity, provided that such
transfer is being made for estate, tax and/or personal planning

 

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Mr. Bruce Zwigard
October 19, 2007
Page 3
purposes and will not have adverse tax consequences to the Company and subject
to the execution of such documents as the Compensation Committee may reasonably
require. In such event, the transferee shall remain subject to all the terms and
conditions applicable to the Option prior to such transfer. The term “Immediate
Family” shall mean any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships, any person sharing your household (other than
a tenant or employee), a trust in which one or more of such persons own more
than fifty percent voting interest, and a foundation in which one or more of
such persons (or you) control the management of the assets.
     5. In the event of any change in the shares of Common Stock of the Company
as a whole occurring as the result of a stock split, reverse stock split, stock
dividend payable on shares of Common Stock, combination or exchange of shares,
or other extraordinary or unusual event occurring after the date hereof, the
Board of Directors of the Company (the “Board”) shall make appropriate
adjustments in the terms of the Option to preserve the economic interest of the
grant. Any such adjustments will be made by the Board, whose determination will
be final, binding and conclusive.
     6. The grant of the Option does not confer on you any right to continue in
the employ of the Company or any of its subsidiaries or affiliates or interfere
in any way with the right of the Board to terminate the term of your employment
in accordance with the terms of the Employment Agreement.
     7. The Company shall require as a condition to the exercise of any portion
of the Option that you pay to the Company, or make other arrangements regarding
the payment of, any federal, state or local taxes required by law to be withheld
as a result of such exercise.
     8. Unless at the time of the exercise of any portion of the Option a
registration statement under the Securities Act of 1933, as amended (the “Act”),
is in effect as to the Shares, the Shares shall be acquired for investment and
not for sale or distribution, and if the Company so requests, upon any exercise
of the Option, in whole or in part, you agree to execute and deliver to the
Company a reasonable certificate to such effect. Notwithstanding the foregoing,
the Company acknowledges that, pursuant to Section 4(g) of the Employment
Agreement, the Company has agreed to (a) use commercially reasonable efforts to
cause the Shares to be listed on AMEX and (b) file a registration statement on
Form S-8 with the Securities and Exchange Commission registering the offer and
sale of the Shares and cause such registration to remain effective at all times
until the earlier to occur of (i) the exercise of all of the Option by Employee
or (ii) the expiration of the Option. The Company’s obligations pursuant to
Section 4(g) of the Employment Agreement are hereby incorporated herein by this
reference as if Section 4(g) of the Employment Agreement was fully set forth in
its entirety herein.
     9. You agree to abide by all of the Company’s policies in effect at the
time you acquire any Shares and thereafter, including the Company’s Insider
Trading Policy, with respect to the ownership and trading of the Company’s
securities.

 

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Mr. Bruce Zwigard
October 19, 2007
Page 4
     10. The Company represents and warrants to you as follows: (i) this
Agreement and the grant of the Option hereunder have been authorized by all
necessary corporate action by the Company and this Agreement is a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms; (ii) the Company will obtain, at its expense, any regulatory and
stock exchange approvals necessary or advisable in connection with the grant of
the Option and the issuance of the Shares; and (iii) the Company currently has
reserved and available, and will continue to have reserved and available during
the term of the Option, sufficient authorized and unissued shares of its Common
Stock for issuance upon exercise of the Option.
     11. This Agreement and the Employment Agreement contain all the
understandings between the Company and you pertaining to the matters referred to
herein, and supercedes all other undertakings and agreements, whether oral or in
writing, previously entered into by the Company and you with respect hereto. No
provision of this Agreement may be amended or waived unless such amendment or
waiver is agreed to in writing signed by you and a duly authorized officer of
the Company. No waiver by the Company or you of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, any prior time or any subsequent time. If any
provision of this Agreement or the application of any such provision to any
party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances other than those to which it is so determined to be invalid and
unenforceable, shall not be affected thereby, and each provision hereof shall be
validated and shall be enforced to the fullest extent permitted by law. This
Agreement will be governed by and construed in accordance with the laws of the
State of Florida, without regard to its conflicts of laws principles. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]

 

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Mr. Bruce Zwigard
October 19, 2007
Page 5
     Would you kindly evidence your acceptance of the Option and your agreement
to comply with the provisions hereof by executing this Agreement in the space
provided below.

            Very truly yours,

LADENBURG THALMANN FINANCIAL SERVICES INC.

      By:   /s/ Richard J. Lampen         Richard J. Lampen       President and
Chief Executive Officer     

AGREED TO AND ACCEPTED:
/s/ Bruce Zwigard
BRUCE ZWIGARD

 

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EXHIBIT A
Ladenburg Thalmann Financial Services Inc.
4400 Biscayne Boulevard, 12th Floor
Miami, Florida 33137
Gentlemen:
     Notice is hereby given of my election to purchase _________ shares of
Common Stock, $.0001 par value (the “Shares”), of Ladenburg Thalmann Financial
Services Inc., at a price of $_________ per Share, pursuant to the provisions of
the stock option granted to me as of October 19, 2007. Enclosed in payment for
the Shares is:

    o my check or wire transfer in the amount of $__________________.       o
with the consent of the Company, _________ Shares having a total value of
$____________, such value being based on the closing price(s) of the Shares on
the date hereof.

     The following information is supplied for use in issuing and registering
the Shares purchased hereby:

         
 
  Number of Certificates and Denominations    
 
       
 
       
 
  Name    
 
       
 
       
 
  Address    
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
  Social Security No.    
 
       
 
       
Dated:
       
 
      Very truly yours,
 
       
 
       
 
      Bruce Zwigard