Exhibit 10.2

Silvercrest Asset Management Group Inc.
2012 Equity Incentive Plan

Nonqualified Stock Option Agreement

 

Participant: Richard R. Hough, III

 

Grant Date: October 1, 2018

 

Per Share Exercise Price: $_____

 

Number of Shares of Stock subject to this Option: _____________________

 

Vesting schedule:

 

This Option may be exercised with respect to the first 33% of the shares subject
to this Option on the first anniversary date of the Grant Date, an additional
33% of the shares subject to this Option on the second anniversary of the Grant
Date, and all remaining shares subject to this Option on the third anniversary
of the Grant Date (in each case, subject to the Participant’s continued service
with the Company or any of its Subsidiaries through the applicable vesting
date).

 

* * * * * * * * * * * * *

This Nonqualified Stock Option Award Agreement (this “Agreement”), dated as of
the Grant Date specified above, is entered into by and between Silvercrest Asset
Management Group Inc., a Delaware corporation, (the “Company”) and the
Participant specified above, pursuant to the Silvercrest Asset Management Group
Inc. 2012 Incentive Plan, as in effect and as amended from time to time (the
“Plan”), which is administered by the Committee; and

Whereas, it has been determined that it would be in the best interests of the
Company to grant the nonqualified stock option provided for herein to the
Participant.

Now, therefore, in consideration of the mutual covenants and promises
hereinafter set forth and for other good and valuable consideration, the parties
hereto hereby mutually covenant and agree as follows:

1.Incorporation by Reference; Plan Document Receipt. This Agreement is subject
in all respects to the terms and provisions of the Plan (including, without
limitation, any amendments thereto adopted at any time and from time to time
unless such amendments are expressly intended not to apply to the award provided
hereunder), all of which terms and provisions are made a part of and
incorporated in this Agreement as if they were each expressly set forth herein.
Any capitalized term not defined in this Agreement shall have the same meaning
as is ascribed thereto in the Plan or Exhibit A to this Agreement. The
Participant

 

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hereby acknowledges receipt of a true copy of the Plan and that the Participant
has read the Plan carefully and fully understands its content. In the event of
any conflict between the terms of this Agreement and the terms of the Plan, the
terms of the Plan shall control.  No part of the Option granted hereby is
intended to qualify as an “incentive stock option” under Section 422 of the
Code.

2.Grant of Option. The Company hereby grants to the Participant, as of the Grant
Date specified above, a nonqualified stock option (this “Option”) to acquire
from the Company at the Per Share Exercise Price specified above, the aggregate
number of shares of Stock specified above (the “Option Shares”). Except as
otherwise provided by the Plan, the Participant agrees and understands that
nothing contained in this Agreement provides, or is intended to provide, the
Participant with any protection against potential future dilution of the
Participant’s interest in the Company for any reason. The Participant shall have
no rights as a stockholder with respect to any shares of Stock covered by this
Option unless and until the Participant has become the holder of record of the
shares of Stock, and no adjustments shall be made for dividends in cash or other
property, distributions, or other rights in respect of any such shares, except
as otherwise specifically provided for in the Plan or this Agreement.

3.Vesting; Forfeiture, Expiration.

(a)Vesting. The Option subject to this grant shall become vested in accordance
with the vesting schedule above. All vesting of the Option granted hereunder
shall occur only on the appropriate vesting date specified above, subject to the
Participant’s continued service with the Company or any of its Affiliates
through each applicable vesting date. There shall be no proportionate or partial
vesting in the periods before each vesting date.

(b)Accelerated Vesting Upon Certain Terminations.  Subject to the immediately
following sentence, if the Participant incurs a Separation from Service (as
defined below) as a result of (i) an involuntary termination by the Company or
its Affiliates without Cause, (ii) the Participant’s termination of employment
for Good Reason, or (iii) the Participant’s death or Disability, then, in each
case, any portion of the Option unvested as of such date shall become fully and
immediately vested. The Participant’s Separation from Service described in
sublcauses (i) and (ii) of the immediately preceding sentence shall result in
accelerated vesting conditioned on and subject to the Participant’s compliance
with Sections 6 and 7 of that certain letter agreement, dated as of September
18, 2018, by and between the Participant and Silvercrest Asset Management Group
LLC (the “Employment Agreement”).

(c)Forfeiture of Option.  Notwithstanding anything herein to the contrary, (A)
upon the Participant’s “separation from service,” as defined in Section 409A of
the Code and Treasury Regulation Section 1.409A-1(h) from the Company and its
Affiliates (a “Separation from Service”) for any or no reason, 100% of any and
all unvested portion of the Option outstanding as of the date of such Separation
from Service (other than any unvested portion of the Option that becomes vested
as of the date of such Separation from Service in accordance with Section 3(b))
shall be immediately forfeited and cancelled for no consideration, and shall
cease to be outstanding, and (B) upon the Participant’s Separation from Service
from the Company and its Affiliates for Cause, 100% of the Option (whether
vested or unvested)

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outstanding as of the date of such Separation from Service shall be immediately
forfeited and cancelled for no consideration, and shall cease to be
outstanding. 

(d)Expiration. The term of the Option shall be until the fifth anniversary of
the Grant Date, after which time it shall expire (such fifth anniversary date,
the “Expiration Date”), subject to earlier Separation from Service in the event
of the Participant’s Separation from Service as specified in the Plan and this
Agreement.  Upon the Expiration Date, the Option (whether vested or not) shall
automatically be cancelled for no consideration, shall no longer be exercisable,
and shall cease to be outstanding.  

4.Detrimental Activity.  

(a)Unless otherwise determined by the Committee, (A) in the event the
Participant engages in any Detrimental Activity prior to any exercise of the
Option, all Options held by the Participant shall thereupon terminate and
expire, (B) as a condition of the exercise of the Option, the Participant shall
be required to certify in a manner acceptable to the Company (or shall be deemed
to have certified) that the Participant is in compliance with the terms and
conditions of the Plan and that the Participant has not engaged in, and does not
intend to engage in, any Detrimental Activity, and (C) in the event the
Participant engages in Detrimental Activity during the 18-months commencing on
the earlier of the date the Option is exercised or the date of the Participant’s
Separation from Service, the Company shall be entitled to recover from the
Participant at any time within 18-months after such date, and the Participant
shall pay over to the Company, an amount equal to any gain realized (whether at
the time of exercise or thereafter) as a result of the exercise. This Section
4(a) shall cease to apply upon a Change of Control.  

(b)The Participant hereby acknowledges and agrees that (i) the Company’s present
and future business relationships with its Clients, employees, vendors,
suppliers and lenders are and will continue to be of a type which normally
continue unless interfered with by others, and (ii) any statements or actions
taken by the Participant to induce any Client, employee, vendor, supplier or
lender to terminate, reduce or not renew any business arrangement with the
Company (unless the Company determines that the termination, reduction or
non-renewal is in the best interest of the Company) or to enter into any
business arrangement within the Company’s line of business with any Person other
than the Company would cause irreparable harm to the Company. The Participant
further acknowledges and agrees that the services such Participant is to render
to the Company are of a special character, with a value to the Company the loss
of which cannot adequately be compensated by damages or an action at law.
Further, the Participant acknowledges and agrees that if he or she were to
become an equity owner of a competing organization, such Participant’s new
obligations and the products, services and technology of the competing
organization would be so similar or related to those contemplated by this
Agreement that it would be very difficult for such Participant not to rely on or
use the Company’s confidential information.  Accordingly, the Participant
acknowledges and agrees that the restrictions herein regarding Detrimental
Activity are necessary for the protection of the business and goodwill of the
Company and its Affiliates.

(c)The Participant hereby acknowledges and agrees that it is fair and reasonable
that he or she make the covenants and undertakings set forth in Section 4 and
has done so with the benefit of the advice of counsel. Furthermore, the
Participant agrees that any

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breach or attempted breach by him or her of the provisions of Section 4 of this
Agreement will cause irreparable harm to the Company for which monetary damages
will not be an adequate remedy. Accordingly, the Company shall be entitled to
apply for and obtain injunctive relief (temporary, preliminary and permanent) in
order to restrain the breach or threatened breach of, or otherwise to
specifically enforce, any of the provisions of Section 4 without the requirement
to post a bond or provide other security. Nothing herein shall be construed as a
limitation or waiver of any other rights or remedies that may be available to
the Company for such breach or threatened breach.  The Participant further
agrees that the subject matter and duration of the restrictions set forth herein
are reasonable in light of the facts as they exist today. 

5.Termination. Subject to the terms of the Plan and this Agreement, the Option,
to the extent vested at the time of the Participant’s Separation from Service,
shall remain exercisable as follows:

(a)Termination due to Death or Disability. In the event of the Participant’s
Separation from Service by reason of death or Disability, the vested portion of
this Option shall remain exercisable until the earlier of (i) one year from the
date of such Separation from Service, and (ii) the Expiration Date.

(b)Termination Without Cause. In the event of the Participant’s involuntary
Separation from Service by the Company without Cause, the vested portion of this
Option shall remain exercisable until the earlier of (i) ninety days from the
date of such Separation from Service, and (ii) the Expiration Date.

(c)Voluntary Termination. In the event of the Participant’s voluntary Separation
from Service, the vested portion of this Option shall terminate and expire upon
such Separation from Service.

(d)Termination for Cause.  In the event of the Participant’s Separation from
Service by the Company for Cause (or in the event of a voluntary Separation from
Service by the Participant after the occurrence of an event that would be
grounds for a Separation from Service for Cause), the Option granted hereunder
(whether or not vested) shall terminate and expire upon such Separation from
Service.

(e)Treatment of Unvested Option upon Termination. Any portion of this Option
that is not vested as of the date of the Participant’s Separation from Service
for any reason shall terminate and expire as of the date of such Separation from
Service.

6.Method of Exercise and Payment. Subject to Sections 4 and 5 hereof, to the
extent that the Option has become vested and exercisable with respect to a
number of shares of Stock as provided herein, the Option may thereafter be
exercised by the Participant with respect to a whole number of Option Shares, in
whole or in part, at any time or from time to time before the expiration of the
Option as provided herein and in accordance with Section 7.1(e) of the Plan,
including, without limitation, by the delivery of any form of exercise notice as
may be required by the Committee and payment in full of the Per Share Exercise
Price multiplied by the number of shares of Stock underlying the portion of the
Option exercised.

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7.Non-transferability.  The Option, and any rights and interests with respect
thereto, issued under this Agreement and the Plan shall not, prior to vesting,
be sold, exchanged, transferred, assigned, or otherwise disposed of in any way
by the Participant (or any beneficiary(ies) of the Participant), other than by
testamentary disposition by the Participant or the laws of descent and
distribution. Any attempt to sell, exchange, transfer, assign, pledge, encumber,
or otherwise dispose of or hypothecate in any way the Option, or the levy of any
execution, attachment, or similar legal process upon the Option, contrary to the
terms and provisions of this Agreement and/or the Plan shall be null and void
and without legal force or effect.

8.Governing Law. All questions concerning the construction, validity, and
interpretation of this Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without giving effect
to its principles of conflicts of laws.

9.Withholding of Tax. The Company or any Affiliate shall have the power and the
right to deduct or withhold, require the Participant to remit to the Company or
such Affiliate, or make any other arrangements as it considers appropriate to
ensure that it has received an amount sufficient to satisfy any federal, state,
local, and foreign taxes of any kind (including, but not limited to, the
Participant’s FICA and SDI obligations) that the Company, in its sole
discretion, deems necessary to be withheld or remitted to comply with the Code
and/or any other applicable law, rule, or regulation with respect to the Option
and, if the Participant fails to do so, the Company may otherwise refuse to
issue or transfer any shares of Stock otherwise required to be issued pursuant
to this Agreement.

10.Recoupment Policy. The Participant acknowledges and agrees that this Option
(including any shares of Stock issued upon exercise thereof) shall be subject to
the terms and provisions of any “clawback” or recoupment policy that may be
adopted by the Company or its Affiliates from time to time or as may be required
by any applicable law (including, without limitation, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and implementing rules and regulations
thereunder).

11.Notices. Any notice or communication given hereunder shall be in writing and
shall be deemed to have been duly given: (i) when delivered in person; (ii) two
days after being sent by United States mail; or (iii) on the first business day
following the date of deposit if delivered by a nationally recognized overnight
delivery service, in each case, to the appropriate party at the address set
forth below (or such other address as the party may from time to time specify):

If to the Company, to:

c/o Silvercrest Asset Management Group Inc.

1330 Avenue of the Americas

New York, NYC 10019
Attention: Office of the General Counsel

 

with a copy (which shall not constitute notice) to:

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Proskauer Rose LLP
Eleven Times Square
New York, NY 10036-8299
Attention:

If to the Participant, to the address on file with the Company.

12.No Right to Employment. Nothing in this Agreement shall affect the right of
the Company or any of its Affiliates to terminate the Participant’s employment
at any time, with or without Cause, or shall be deemed to create any rights to
employment or continued employment. The rights and obligations arising under
this Agreement are not intended to and do not affect the Participant’s
employment relationship that otherwise exists between the Participant and the
Company or any of its Affiliates, whether such employment relationship is at
will or defined by an employment contract. Moreover, this Agreement is not
intended to and does not amend any existing employment contract between the
Participant and the Company or any of its Affiliates; to the extent there is a
conflict between this Agreement and such an employment contract, the employment
contract shall govern and take priority.

13.Data Protection.  By executing this Agreement, the Participant hereby
consents to the holding and processing of personal information provided by the
Participant to the Company, any Affiliate thereof, trustee, or third party
service provider, for all purposes relating to the operation of the Plan. These
include, but are not limited to: (i) administering and maintaining Participant
records; (ii) providing information to the Company, its Affiliates, trustees of
any employee benefit trust, registrars, brokers, or third-party administrators
of the Plan; (iii) providing information to future purchasers or merger partners
of the Company or any Affiliate thereof, or the business in which the
Participant works; and (iv) transferring information about the Participant to
any country or territory that may not provide the same protection for the
information as the Participant’s home country.

14.Market Stand-Off.  If requested by the Company, any Affiliate, or a lead
underwriter of any public offering of the shares of Stock (a “Lead
Underwriter”), the Participant shall irrevocably agree, and by execution of this
Agreement shall irrevocably be deemed to have agreed, not to sell, contract to
sell, grant any option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge, or otherwise transfer or dispose of, any
interest in any shares of Stock or any securities convertible into, derivative
of, or exchangeable or exercisable for shares of Stock, or any other rights to
purchase or acquire shares of Stock (except shares of Stock included in such
public offering or acquired on the public market after such offering) during
such period of time following the effective date of a registration statement of
the Company filed under the Securities Act that a Lead Underwriter shall specify
(the “Lock-up Period”).  The Participant hereby further agrees to sign such
documents as may be requested by a Lead Underwriter, the Company, or any
Affiliate to effect the foregoing and agree that the Company or an Affiliate may
impose stop transfer instructions with respect to shares of  Stock acquired
pursuant to an Award until the end of such Lock-up Period.

15.Compliance with Laws. The issuance of this Option (and the shares of Stock
upon exercise of this Option) pursuant to this Agreement shall be subject to,
and shall comply with, any applicable requirements of any foreign and U.S.
federal and state securities laws, rules,

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and regulations (including, without limitation, the provisions of the Securities
Act, the Exchange Act, and in each case any respective rules and regulations
promulgated thereunder) and any other law or regulation applicable thereto. The
Company shall not be obligated to issue this Option or any of the shares of
Stock pursuant to this Agreement if any such issuance would violate any such
requirements.

16.Section 409A. Notwithstanding anything herein or in the Plan to the contrary,
the Option is intended to be exempt from the applicable requirements of
Section 409A and shall be limited, construed, and interpreted in accordance with
such intent.

17.Binding Agreement; Assignment. This Agreement shall inure to the benefit of,
be binding upon, and be enforceable by the Company and its successors and
assigns. The Participant shall not assign any part of this Agreement without the
prior express written consent of the Company.

18.Headings. The titles and headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.

19.Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute the same instrument.

20.Severability. If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties hereto
shall be relieved of all obligations arising under such provision, but only to
the extent that it is illegal, unenforceable or void, it being the intent and
agreement of the parties hereto that this Agreement shall be deemed amended by
modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible, by
substituting therefor another provision that is legal and enforceable and
achieves the same objectives.

21.Entire Agreement; Amendment. This Agreement, together with the Plan, contains
the entire agreement between the parties hereto with respect to the subject
matter contained herein, and supersedes all prior agreements or prior
understandings, whether written or oral, between the parties relating to such
subject matter. The Committee shall have the right, in its sole discretion, to
modify or amend this Agreement from time to time in accordance with and as
provided in the Plan. The Company shall give written notice to the Participant
of any such modification or amendment of this Agreement as soon as practicable
after the adoption thereof.  This Agreement may also be modified or amended by a
writing signed by both the Company and the Participant.

22.Mode of Communications. The Participant agrees, to the fullest extent
permitted by applicable law, in lieu of receiving documents in paper format, to
accept electronic delivery of any documents that the Company or any of its
Affiliates may deliver in connection with this Option grant and any other grants
offered by the Company or its Affiliates, including, without limitation,
prospectuses, grant notifications, account statements, annual or quarterly
reports, and other communications.  Electronic delivery of a document may be
made via the

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Company’s email system or by reference to a location on the Company’s intranet,
an internet website, or the online brokerage account system.

23.Acquired Rights. The Participant acknowledges and agrees that: (a) the
Company may terminate or amend the Plan at any time; (b) the award of the Option
made under this Agreement is completely independent of any other award or grant
and is made at the sole discretion of the Company; (c) no past grants or awards
(including, without limitation, the Option awarded hereunder) give the
Participant any right to any grants or awards in the future whatsoever; and
(d) any benefits granted under this Agreement are not part of the Participant’s
ordinary salary and shall not be considered as part of such salary in the event
of severance, redundancy, or resignation.

 

Remainder of Page Intentionally Left Blank

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

 

 

Silvercrest Asset Management Group Inc.

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Participant

 

 

Name:

 

 Richard R. Hough, III

 

 

 

 

Social Security Number:

 

 

 

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EXHIBIT A

DEFINITIONS

 

“Cause” has the meaning set forth in the Silvercrest LPA.

“Detrimental Activity” means

(a)without written authorization from the Company, disclosure to any Person
outside the Company or the use in any manner, except as necessary in the
furtherance of Participant’s responsibilities to the Company, at any time, of
any confidential information, trade secrets or proprietary information relating
to the business of the Company that is acquired by the Participant at any time
prior to the Participant’s termination.  For avoidance of doubt, nothing in this
Agreement shall be construed to prohibit the Participant from (i) responding
truthfully to a valid subpoena; (ii) filing a charge or complaint with, or
participating in any investigation conducted by, a governmental agency including
the Department of Labor, the National Labor Relations Board, the Occupational
Safety and Health Administration, the Equal Employment Opportunity Commission
and/or any state or local human rights agency or Inspector General; or (iii)
filing, testifying or participating in or otherwise assisting in a proceeding
relating to, or reporting, an alleged violation of any federal, state or
municipal law relating to fraud or any rule or regulation of the Securities
Exchange Commission, the Commodity Futures Trading Commission or any
self-regulatory organization (including, but not limited to, the Financial
Industry Regulatory Authority), or making other disclosures or taking other
actions (including, without limitation, receiving any whistleblower award
provided for under such laws or regulations) that are protected under the
whistleblower provisions of federal or state law or regulation.  Prior
authorization of the Company shall not be required to make any reports or
disclosures under this Paragraph and the Participant is not required to notify
the Company that the Participant has made such reports or disclosures;

(b)any activity while employed or performing services that results, or if known
could have reasonably been expected to result, in the Participant’s termination
for Cause;

(c)without written authorization from the Company, directly or indirectly, in
any capacity whatsoever, (i) engage or hold interests in other business ventures
of any kind that creates or appears to create a conflict of interest with such
Participant’s responsibilities with respect to the Company and its Clients
without the prior approval in writing of the Company.  The restrictions set
forth in this (c) shall not prohibit the ownership of a less than 2% interest in
any Person if the securities of such Person are publicly traded.

(d)engaging, individually or through an agent, for such Participant or on behalf
of another, as an employee, director, owner, partner, member, sole proprietor,
consultant, agent, representative, shareholder, or in any other manner or
capacity whatsoever in the following: (A) contacting, directly or indirectly,
any Client or otherwise solicit or inducing or attempting to solicit or induce
any Client with whom the Participant has dealt, to terminate, reduce or not
renew its relationship with the Company; (B) accepting any business involving or
relating to the business of the Company from any Client with whom the
Participant has dealt during the

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Restricted Period, or entering into a business relationship involving or
relating to the business of the Company with any such Client (unless approved by
the Company in writing); (C) making any statement or take any action that may
interfere with the Company’s business relationship with any Client, vendor,
supplier or lender; (D) inducing or soliciting or attempting to induce or
solicit any vendor, supplier or lender of the Company to terminate, reduce or
not renew its relationship with the Company; or (E) soliciting or inducing any
individual then employed by the Company to terminate such employment, or hire or
attempt to hire any individual who is, or was during the Restricted Period,
employed by or associated with the Company as an employee, independent
contractor or agent;

(e)a material breach of any restrictive covenant contained in any agreement
between the Participant and the Company; or

(f)the Participant’s Disparagement, or inducement of other to do so, of the
Company or its Affiliates or their past or present officers, directors,
employees or products.  

For purposes of Detrimental Activity, the term “Company” shall be deemed to
include its Affiliates.  Only the Chief Executive Officer or the Chief Financial
Officer of the Company (or his designee, as evidenced in writing) shall have the
authority to provide the Participant, except for himself or herself, with
written authorization to engage in the activities contemplated in subsections
(a) and (c) of the definition of Detrimental Activity.

“Disability” has the meaning set forth in the Slivercrest LPA.

“Disparagement” means making comments or statements to the press, the Company’s
or its Affiliate’s employees, consultants or any individual or entity with whom
the Company of its Affiliates has a business relationship which could reasonably
be expected to adversely affect in any manner: (a) the conduct of the business
of the Company or its Affiliates (including, without limitation, any products or
business plans or prospects); or (b) the business reputation of the Company or
its Affiliates, or any of their products, or their past or present officers,
directors or employees.

“Good Reason” has the meaning set forth in the Employment Agreement, including
the notice and cure provisions set forth therein.

“Restricted Period” means the period beginning on the date of Separation from
Service of the Participant with the Company and ending on the 18-month
anniversary thereof, (B) “Person” means and includes an individual and any legal
entity including a corporation, partnership, association, limited liability
company, joint stock company, trust or estate, and (C) the term “Client” shall
include all Past Clients, and Present Clients, subject to the following general
rule: with respect to each such Client, the term shall also include any Persons
which are known to the Participant to be Affiliates of such Client. Past
Clients, Potential Clients and Present Clients shall be defined as follows:

“Past Client” shall mean, at any particular time, any Person who at any point
within the five years prior to such time had been a recipient of services from
the Company (including, without limitation, its predecessors) or its Affiliates
but at such time is not a recipient of services from the Company or its
Affiliates.

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“Potential Client” shall mean, as of any time of determination, any Person to
whom the Company (including without limitation, its predecessors) or its
Affiliates has offered to provide investment products or services at any point
during the period of two (2) years immediately preceding such time of
determination (but who has not become a recipient of investment products or
services from the Company or its Affiliates).

“Present Client” shall mean, at any particular time, any Person who is at such
time a recipient of services from the Company or its Affiliates.

 

“Silvercrest LPA” means that certain Second Amended and Restated Limited
Partnership Agreement of Silvercrest L.P. executed as of November 13, 2012.

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