Exhibit 10.2

 

NATIONAL HOLDINGS CORPORATION

 

NONQUALIFIED INDUCEMENT STOCK OPTION GRANT NOTICE

 

As an inducement material to the decision by the individual listed below (the
“Optionee”) to accept employment with National Holdings Corporation, a Delaware
corporation (the “Company”), and pursuant to that certain employment agreement
entered into by and between the Optionee and the Company, dated as of May 7,
2015 (the “Employment Agreement”), the Company hereby grants to the Optionee a
nonqualified stock option to purchase the number of shares of the common stock
of the Company (“Shares”) set forth below (the “Option”). This Option is subject
to all of the terms and conditions set forth herein and in the Stock Option
Agreement attached hereto as Exhibit A (the “Agreement”), which is incorporated
herein by reference. This Option is made and granted as a stand-alone award and
is not granted under or pursuant to the National Holdings Corporation 2013
Omnibus Incentive Plan (the “Plan”). However, unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this Grant
Notice and the Agreement.

 

 

 

 

 

 

Optionee:

 

Glenn C. Worman

 

Grant Date:

 

May 7, 2015

 

Vesting Commencement Date:

 

May 7, 2015

 

Total Number of Shares Subject to the Option:

 

180,000

Shares

 

Expiration Date:

 

June 20, 2023, subject to the terms of the Agreement

 

Exercise Price per Share and
Vesting Schedule:

 

(i) 60,000 options shall vest immediately upon grant, one third of such options
shall have an exercise price of $4.50 per share, one third of such options shall
have an exercise price of $5.50 per share and one third of such options shall
have an exercise price of $6.00 per share; (ii) 60,000 options shall vest on the
first anniversary of the Grant Date, one third of such options shall have an
exercise price of $4.50 per share, one third of such options shall have an
exercise price of $5.50 per share and one third of such options shall have an
exercise price of $6.00 per share; (iii) and 60,000 options shall vest on the
second anniversary of the Grant Date, one third of such options shall have an
exercise price of $4.50 per share, one third of such options shall have an
exercise price of $5.50 per share and the remainder of such options shall have
an exercise price of $6.00 per share. Notwithstanding the foregoing, the options
granted pursuant to this paragraph that are unvested as of a Change in Control
(as defined in the Plan) shall become immediately vested upon the Change in
Control, provided the Executive is still employed with the Company at such time.

 

 

 

Termination:

 

The Option shall terminate on the Expiration Date set forth above or, earlier,
in accordance with the terms of the Agreement.

 

 

By his signature, the Optionee agrees to be bound by the terms and conditions of
the Agreement and this Grant Notice. The Optionee has reviewed this Grant Notice
and the Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Grant Notice and fully understands all
provisions of this Grant Notice and the Agreement. The Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under this Grant Notice, the Agreement or
relating to the Option.

 

 

 

[Signature Page Follows]

 

 
 

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NATIONAL HOLDINGS CORPORATION

  

OPTIONEE

 

 

 

 

By:

 /s/ Robert B.Fagenson

  

By:

/s/ Glenn C. Worman

Print Name:

Robert B. Fagenson

  

Print Name:

Glenn C. Worman

Title:

Chairman of the Board and Chief Executive Officer 

  

  

  

Address:

410 Park Avenue, 14th Floor

  

Address:

385 Princeton Avenue

 

New York, New York 10021

 

 

 Brick, New Jersey 08724

 

 

 

 
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EXHIBIT A

 

TO NONQUALIFIED INDUCEMENT STOCK OPTION GRANT NOTICE

 

STOCK OPTION AGREEMENT

 

No. of shares subject to

Nonqualified Stock Option: 180,000

 

Pursuant to the Nonqualified Inducement Stock Option Grant Notice (the “Grant
Notice”) to which this Stock Option Agreement (this “Agreement”) is attached,
National Holdings Corporation, a Delaware corporation (the “Company”), has
granted to the Optionee an option (the “Option”) to purchase the number of
Shares indicated in the Grant Notice.

 

1.     Non-Plan Grant; Incorporation of Terms of Plan. The Option is made and
granted as a stand-alone award, separate and apart from, and outside of, the
National Holdings Corporation 2013 Omnibus Incentive Plan (the “Plan”), and
shall not constitute an award granted under or pursuant to the Plan.
Notwithstanding the foregoing, the terms, conditions and definitions set forth
in the Plan shall apply to the Option as though the Option had been granted
under the Plan (including but not limited to the adjustment provision contained
in the Plan), and the Option shall be subject to such terms, conditions and
definitions which are hereby incorporated into this Agreement by reference. For
the avoidance of doubt, the Option shall not be counted for purposes of
calculating the aggregate number of Shares that may be issued or transferred
pursuant to Awards under the Plan or for purposes of calculating the award
limitations with respect to the Optionee under the Plan.

 

2.     Employment Inducement Grant. The Option is intended to constitute an
“employment inducement grant” under NASDAQ Listing Rule 5635(c)(4), and
consequently is intended to be exempt from the NASDAQ rules regarding
shareholder approval of stock option and stock purchase plans. This Agreement
and the terms and conditions of the Option shall be interpreted in accordance
and consistent with such exemption.

 

3.     Grant of Options. (a) In consideration, and as an inducement for the
Employee to enter into employment with the Company pursuant to an employment
agreement dated as of May 7, 2015 (“Employment Agreement”), the Company, on May
7, 2015 (the “Grant Date”), granted to the Optionee, subject to the terms and
conditions of the Plan and subject further to the terms and conditions set forth
herein, the Option. The Option gives the Optionee the right and option to
purchase from the Company all or any part of an aggregate of 180,000 shares of
the Common Stock of the Company, at the exercise price of (a) $4.50 per share
with respect to 60,000 of such shares (“Tranche A”), (b) $5.50 with respect to
60,000 of such shares (“Tranche B”), and (c) $6.00 with respect to 60,000 of
such shares (“Tranche C”) (which exercise prices are not less than the Fair
Market Value of a share of Common Stock on the Grant Date). This Option is
intended to be treated as a nonqualified stock option, which is not subject to
Code Section 421. This Option is exercisable as hereinafter provided.

 

(b)     In consideration of the grant of the Option by the Company, the Optionee
agrees to render faithful and efficient services to the Company or any
Affiliate.

 

 
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4.     Terms and Conditions. The Options are subject to the following terms and
conditions:

 

(a)     Expiration Date. The Options shall expire at 11:59 p.m. on June 20, 2023
(the “Expiration Date”) or, if earlier, the time set forth in Sections 5 or 6 of
the Agreement, as applicable. No Option may be exercised after the Option
expires.

 

(b)     Vesting of Options.

 

(i)     In General. Except as otherwise provided below, each Tranche shall be
exercisable with respect to 20,000 shares of Common Stock in each of Tranches A,
B and C (for a total of 60,000 shares) on the Grant Date; with respect to an
additional 20,000 shares of Common Stock in each of Tranches A, B and C (for a
total of 60,000 shares) on the first anniversary of the Grant Date and with
respect to an additional 20,000 shares of Common Stock in each of Tranches A, B
and C (for a total of 60,000 shares) on the second anniversary of the Grant
Date, provided the Optionee has been continuously employed by, or providing
services to, the Company or an Affiliate from the Grant Date until such time.
Once this Option has become exercisable, it shall continue to be exercisable
until the earlier of the termination of the Optionee’s rights hereunder pursuant
to Sections 5 or 6 of this Agreement or the Expiration Date. A partial exercise
of this Option shall not affect the Optionee’s right to exercise this Option
with respect to the remaining shares of Common Stock, subject to the conditions
of the Plan and this Agreement.

 

(ii)     Qualifying Termination or Change in Control. In the event (A) the
Optionee's employment or service with the Company and/or its Affiliates is
terminated by the Company without "Cause" (as defined in the Employment
Agreement) (and not due to Disability, as defined in the Employment Agreement)
or by the Optionee for "Good Reason" (as defined in the Employment Agreement)
(either of such events a “Qualifying Termination”) or (B) a Change of Control
(as defined in the Plan) of the Company, provided the Optionee has remained in
continuous employment until such Change of Control, the Option shall become
exercisable in full, to the extent not then previously exercisable.

 

(c)     Method of Option Exercise and Payment for Shares. The Option shall be
exercised by delivering written notice of exercise, along with the Option price
for the portion of the Option being exercised and all applicable tax
withholdings, to the attention of the Company’s Secretary at the Company’s
address specified in Section 11 below. The exercise date shall be the date of
delivery. The Optionee shall pay the Option price (i) in cash or cash equivalent
acceptable to the Committee, (ii) by surrendering shares of Common Stock the
Optionee already owns, (iii) by a cashless exercise through a broker, (iv) by
means of a “net settlement” procedure, (v) by such other medium of payment as
the Committee shall authorize or (vi) by any combination of the allowable
methods of payment set forth herein. Additionally, the Optionee shall pay all
applicable tax withholdings in cash or cash equivalent acceptable to the
Committee.

 

(d)     Transferability. The Options may not be transferred except by will or
the laws of descent and distribution. No right or interest of the Optionee or
any transferee in an Option shall be liable for, or subject to, any lien,
obligation or liability of the Optionee or any transferee.

 

 
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5.     Exercise in the Event of Qualifying Termination. In the event the
Optionee's employment or service with the Company and/or its Affiliates is
terminated as a result of a Qualifying Termination, this Option shall be
exercisable for all or part of the number of shares of Common Stock that were
exercisable as of the date of, or as a result of, such termination of
employment, reduced by the number of shares for which the Optionee previously
exercised the Option shall survive, only until the earlier of (a) six (6) months
after the termination date and (b) the Expiration Date and the Options shall
thereafter expire.

 

6.     Exercise in the Event of Termination other than Qualifying Termination.
Except as otherwise provided in this Section 6, in the event the Optionee's
employment or service with the Company and/or its Affiliates terminates other
than as a result of a Qualifying Termination, this Option shall be exercisable
for all or part of the number of shares of Common Stock subject to the Option
that were exercisable as of the date of the Qualifying Termination, reduced by
the number of shares for which the Optionee previously exercised the Option
shall survive, only until the earlier of (a) three (3) months after the
termination date or (b) the Expiration Date and the Options shall thereafter
expire. In the event the Optionee’s employment or service with the Company
and/or its Affiliates is terminated for Cause (as defined in the Employment
Agreement), this Option shall immediately terminate and be forfeited with no
further compensation to the Optionee.    

 

7.     Agreement to Terms of the Plan and Agreement. The Optionee has received a
copy of the Plan, has read and understands the terms of the Plan and this
Agreement, and agrees to be bound by their terms and conditions except as
modified herein.

 

8.     Tax Consequences. The Optionee acknowledges (i) that there may be adverse
tax consequences upon acquisition or disposition of the shares of Common Stock
received upon exercise of this Option and (ii) that Optionee should consult a
tax adviser prior to such acquisition or disposition of the shares of Common
Stock. The Optionee is solely responsible for determining the tax consequences
of the Options and for satisfying the Optionee’s tax obligations with respect to
the Options.

 

9.     Fractional Shares. Fractional shares shall not be issuable hereunder, and
when any provision hereof may entitle the Optionee to a fractional share such
fractional share shall be disregarded.

 

10.     Adjustments; Change in Capital Structure. The terms of this Option shall
be adjusted, if at all, in accordance with the terms and conditions of the Plan
as the Committee determines is equitably required in the event the Company
effects one or more extraordinary dividends, stock dividends, stock splits,
subdivisions or consolidations of shares or other similar changes in
capitalization (which adjustment shall be no less favorable than any other
holder of options of the Company).

 

11.     Notice. Any notice or other communication given pursuant to this
Agreement, or in any way with respect to the Options hereunder, shall be in
writing and shall be personally delivered or mailed by United States registered
or certified mail, postage prepaid, return receipt requested, to the following
addresses:

 

 
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If to the Company:

National Holdings Corporation

 

 

 

 

 

410 Park Avenue, 14th Floor

 

 

 

 

 

New York, New York 10022

 

 

 

 

 

Attention: Chief Executive Officer

 

 

 

     

 

If to the Optionee: 

Glenn C. Worman

     

 

 

385 Princeton Avenue

 

 

 

 

 

Brick, New Jersey  08724

     

 

 

12.     Shareholder Rights. The Optionee shall not have any rights as a
shareholder with respect to shares of Common Stock subject to this Option until
the issuance of the shares of the Common Stock upon exercise of the Option.

 

13.     No Right to Continued Employment or Service. Neither this Agreement, the
granting of the Options nor any other action taken pursuant to this Agreement,
or the Options constitutes or is evidence of any agreement or understanding,
expressed or implied, that the Company or any Affiliate shall retain the
Optionee as an employee or other service provider for any period of time or at
any particular rate of compensation.

 

14.     Binding Effect. Subject to the limitations stated above and in the Plan,
this Agreement shall be binding upon and inure to the benefit of the legatees,
distributees, and personal representatives of the Optionee and the successors of
the Company.

 

15.     Conflicts. In the event of any conflict between the provisions of the
Plan and the provisions of this Agreement, the provisions of the Agreement shall
govern. All references herein to the Plan shall mean the Plan as in effect on
the date hereof.

 

16.     Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same instrument.

 

17.     Miscellaneous. The Company agrees to file with the SEC as soon as
reasonably practicable following the Grant Date, a Form S-1 or Form S-8
registration statement covering the shares of Common Stock subject to the
Option. The parties agree to execute such further instruments and take such
further actions as may be necessary to carry out the intent of this Agreement.

 

 
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18.     Section 409A. Notwithstanding any of the provisions of this Agreement,
the parties intend that the Option be exempt from Code Section 409A. Each
payment, amount or benefit payable hereunder that is subject to Code Section
409A shall be treated as a separate payment in a series of separate payments for
all purposes under Code Section 409A. Notwithstanding the preceding, neither the
Company nor any Affiliate shall be liable to the Optionee or any other person if
the Internal Revenue Service or any court or other authority have any
jurisdiction over such matter determines for any reason that an Option is
subject to taxes, penalties or interest as a result of failing to be exempt
from, or comply with, Code Section 409A (other than resulting from the gross
negligence or willful misconduct of the Company, Affiliate or person after the
date first referenced above).

 

19.     Governing Law. This Agreement shall be governed by the laws of the State
of Delaware without reference to conflict of law provisions, except to the
extent federal law applies.

 

20.     Administration. The Committee shall have full power and authority to
take all actions and to make all determinations required or provided for under
this Agreement, and shall have full power and authority to take all such other
actions and make all such other determinations not inconsistent with the
specific terms and provisions of this Agreement that the Committee deems to be
necessary or appropriate to the administration of this Agreement. All actions
taken and all interpretations and determinations made by the Committee in good
faith shall be final and binding upon the Optionee, the Company and all other
interested persons. No member of the Committee or the Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Agreement or the Option.

 

21.     Conformity to Securities Laws. The Optionee acknowledges that this
Agreement is intended to conform to the extent necessary with all provisions of
the Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Agreement shall be administered, and the Option is granted and may
be exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, this Agreement shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.

 

22.     Entire Agreement. The Grant Notice, this Agreement and the Employment
Agreement, constitute the entire agreement of the parties and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly
authorized officer, and the Optionee has affixed his signature hereto.

 

 
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COMPANY:

 

National holdings corporation

 

By:                                                                                     

 

Name: Robert B. Fagenson

 

Title: Chairman and Chief Executive Officer

 

OPTIONEE:

 

                                                                                            

Glenn C. Worman

 

 

 

 

 

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