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