Document:

exv10w17

 

EXHIBIT 10.17

AMENDMENT TO

FINANCIAL CONSULTING AGREEMENT

     THIS AMENDMENT TO FINANCIAL CONSULTING AGREEMENT (this “Amendment”), is made and entered into
effective as of March 1, 2005, and amends that certain Financial Consulting Agreement, dated as of
December 31, 1996, as the same has been amended from time to time (as amended, the
“Agreement”), by and between THE HALLWOOD GROUP INCORPORATED, a Delaware corporation
(“Hallwood Group”) and HALLWOOD INVESTMENTS LIMITED (f/k/a HSC Financial Corporation), an
entity organized under the laws of the territory of the British Virgin Islands (the
“Consultant”).

RECITALS

     WHEREAS, the parties to the Agreement desire to amend the Agreement; and

     WHEREAS, Section 9(h) of the Agreement provides that the parties may amend the Agreement by
written instrument.

     NOW, THEREFORE, in consideration of the mutual undertakings and agreements contained in this
Amendment and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

AGREEMENT

     1. Amendment. Section 6(A) of the Agreement is hereby amended in its entirety as
follows:

     “A. As compensation for the Consultant’s services, Hallwood Group agrees to pay
to the Consultant an annual fee of Nine Hundred Ninety-Six Thousand Dollars
($996,000.00), payable in monthly installments of Eighty-Three Thousand Dollars
($83,000.00) on the first day of each month.”

     2. Continuation of Agreement. The Agreement shall continue in full force and effect,
as amended by this Amendment.

     3. Counterparts. This Amendment may be executed in multiple counterparts, all of
which shall be deemed originals, but all of which together shall constitute one and the same
instrument.

 

 

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Amendment as of
the date first above written.

	 	 	 	 	 
	 	 	HALLWOOD GROUP:
	 
	 	 	 	 
	 	 	THE HALLWOOD GROUP INCORPORATED
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	Address:
	 	3710 Rawlins
	

	 	 	 	Suite 1500
	

	 	 	 	Dallas, TX 75219
	 
	 	 	 	 
	 	 	CONSULTANT:
	 
	 	 	 	 
	 	 	HALLWOOD INVESTMENTS LIMITED
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	Address:
	 	24, Avenue Princesse Grace
	

	 	 	 	Monte-Carlo MC98000
	

	 	 	 	Principality of Monaco

2exv10w18

 

Exhibit 10.18

BROOKWOOD COMPANIES INCORPORATED

STOCK OPTION PLAN

Dated June 12, 1989

As Amended April 5, 1993 and May 3, 1999

 

 

The Brookwood Companies Incorporated

Stock Option Plan

ARTICLE 1. INTRODUCTION

	1.1.  	This Stock Option Plan (the “Plan”) is intended to advance the interests of the Brookwood
Companies Incorporated (the “Company”), its sole shareholder, and any subsidiary or parent
corporation (whether now existing or hereafter formed or acquired) of the Company by
encouraging and enabling directors, officers, key employees and consultants of the Company,
(upon whose judgment, initiative and effort the Company is dependent for the successful
conduct of its business), to acquire and retain a proprietary interest in the Company by
ownership of its stock.

	1.2.  	The stock options (each an “Option” and collectively the “Options”) offered pursuant to the
Plan are a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any recipient.

	1.3.  	By means of the Plan, the Company seeks to retain the services of persons now holding key
positions and to secure the services of persons capable of filling such positions.

	1.4.  	As used in the Plan, the terms “subsidiary corporation” ( hereinafter a “Subsidiary”) and
“parent corporation” (hereinafter a “Parent”) shall mean, respectively, a corporation coming
within the definition of such terms contained in Sections 425(f) and 425(e) of the Code.

ARTICLE 2. NUMBER OF SHARES OF COMMON STOCK SUBJECT TO THE PLAN

	2.1.  	The total number of shares of common stock of the Company which may be purchased pursuant
to the exercise of Options granted under the Plan shall not exceed, in the aggregate, two
million five hundred thousand (2,500,000) shares of the currently authorized common stock,
$.01 par value, of the Company (the “Shares”). The term Shares shall include any securities,
cash or other property into which Shares may be changed through merger, consolidation,
reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of
 shares, exchange of shares, issuance of rights to subscribe to shares or change in capital
structure.

	2.2.  	Shares which may be acquired under the Plan may be either authorized but unissued shares of
common stock, shares held in the Company’s treasury, or both, at the discretion of the
Company. To the extent that Options granted under the Plan expire or terminate without having
been exercised in full, new Options may be granted with respect to the shares of such expired
or terminated Options that have not been purchased.

ARTICLE 3. DURATION OF THE PLAN

     The Company may grant Options hereunder until the close of business on May 2, 2009 (the
“Termination Date”).

Page 1 of 6

 

ARTICLE 4. ADMINISTRATION OF THE PLAN

	4.1.  	The Committee: The board of directors of the Company (the “Board of Directors”)
may designate an option committee (the “Committee”) to administer the Plan. References herein
to the “Board” or the “Board of Directors” shall mean any such committee, if appointed, except
in Sections 4.4, 9 and 10.

	4.2.  	Powers of the Board of Directors: Subject to the express provisions of the Plan, the
Board shall have the following authority, exercisable in its discretion:

	 	 	 	 	 
	(a).	 	to determine —
	 
	 	 	 	 
	

	 	(i.)
	 	the individuals to whom Options shall be granted;
	 
	 	 	 	 
	

	 	(ii.)
	 	the time when such Options shall be granted;
	 
	 	 	 	 
	

	 	(iii.)
	 	the number of Shares which shall be subject to each Option;
	 
	 	 	 	 
	

	 	(iv.)
	 	the purchase price of Shares subject to Options;
	 
	 	 	 	 
	

	 	(v.)
	 	the period(s) during which such Options shall
be exercisable (whether in whole or in part);
	 
	 	 	 	 
	

	 	(vi.)
	 	whether or not the Option shall be an
incentive stock option or a non-statutory stock option pursuant to the
then current provisions of the Internal Revenue Code; and
	 
	 	 	 	 
	

	 	(vii.)
	 	all other terms and provisions of Options (which need not be
identical);
	 
	 	 	 	 
	(b).	 	to prescribe, amend and rescind rules and regulations relating to the Plan;
	 
	 	 	 	 
	(c).	 	to amend Options;
	 
	 	 	 	 
	(d).	 	to construe the Plan and Options;
	 
	 	 	 	 
	(e).	 	to rely upon any opinion received from any counsel or
consultant and any computation received from any of them, all of the expenses
of which shall be paid by the Company; and
	 
	 	 	 	 
	(f).	 	to make all other determinations necessary or advisable for
administering the Plan.

	4.3.  	Determinations Final: The determination of the Board with respect to the Plan shall
be final and binding on all holders of Options.

	4.4.  	Liability of Board and Committee Members: No member or former member of the Board of
Directors or any committee appointed by the Board to administer the Plan shall be personally
liable for any action or determination made in good faith with respect to the Plan or any
Option.

ARTICLE 5. OPTION GRANTS

	5.1.  	Eligibility: Options may be granted to full or part time employees, directors
and consultants of the Company or of a Subsidiary or Parent.

Page 2 of 6

 

	5.2.  	Option Price: The price of each Share purchasable under any Option shall be such
amount as the Board determines at the date of grant thereof; provided, however, that in the
case of an incentive stock option, the exercise price shall comply with all applicable
requirements of the Internal Revenue Code then in effect. No cash payment shall be required
to receive the grant of an Option.

5.3. Fair Market Value:

	 	 	 	 	 	 	 
	 	 	(g).	 	If the Shares are listed on the Nasdaq National Market, the Nasdaq SmallCap Market or other nationally recognized exchange or trading
system on the date as of which a determination of fair market value is to be
made, the fair market value per Share shall be the last reported sale price or
closing price per share on such market, exchange or system on the trading day
immediately preceding such date (or, if no such price is reported on such date,
the price on the nearest preceding date on which such a price is reported).
	 
	 	 	 	 	 	 
	 	 	(h).	 	If the Shares are listed on more than one national securities
exchange or trading system in the United States, the Board shall determine
which exchange or trading system shall be used for the purpose of determining
the fair market of a Share.
	 
	 	 	 	 	 	 
	 	 	(i).	 	If a public market does not exist for the Shares, the Board

shall in its sole discretion determine the fair market value of a Share on the
Option grant date.

	5.4.  	Term of Options: Options shall be exercisable at such times, in such amounts, and
during such period or periods as the Board shall determine. The Board shall have the right
from time-to-time, conditionally or unconditionally, to accelerate in whole or in part the
right to exercise any Option or to extend the period during which an Option shall remain in
effect and/or remain exercisable. To the extent that an Option is not exercised within the
period of exercisability specified in the Option grant or as otherwise provided hereunder, it
shall expire.

	5.5.  	Transferability of Options: No option shall be assignable or transferable by the
person to whom it was granted, either voluntarily or by operation of law, except (a) to
immediate members of such person’s family or to a trust therefor; or (b) by such person’s will
or by the laws of descent and distribution. “Immediate family members” shall consist only of
a person’s father and mother; sisters and brothers; spouse; and children and grandchildren (in
both cases, including by adoption). A transfer of an incentive stock option as an incentive
stock option pursuant to this provision will only
be permissible if and to the extent permitted by then applicable provisions of the Internal
Revenue Code.

ARTICLE 6. OPTION EXERCISES

	6.1.  	Notice of Exercise: To exercise an Option as to all or part of the Shares
covered thereby, the Option holder shall (i) give written notice of the exercise to the
Secretary of the Company at its principal business office specifying the number of Shares to
be purchased, accompanied by payment of the purchase price, and (ii) comply with all the terms
of the Option grant and this Plan. Notwithstanding the foregoing, an Option holder may not
purchase less than a whole Share under such Option.

	6.2.  	Payment/Issuance of Shares: Upon the exercise of an Option, the Company shall cause
the Shares purchased to be issued only when (a) payment of the full exercise price of the
Shares has been received by the Company; (b) provision acceptable to the Company has been made
for the payment of any federal, state and local taxes that are due or that are required to be
withheld by the

Page 3 of 6

 

Company because of the purchase of the Shares; and (c) there has been
compliance with all federal and state laws and regulations, in particular, the Securities Act
of 1933 and the Securities Exchange Act of 1934 and the rules and regulations promulgated
under those acts, that the Company deems applicable, and all other legal matters in connection
with the issuance and delivery of the Shares have been approved by the Company’s counsel.

     6.3. To the extent permitted by the Board and by applicable law, the holder of an
Option may pay the exercise price of an Option —

	 	 	 	 	 	 	 
	 	 	(j).	 	in whole or in part, by delivering to the Company common stock
of the Company (in proper form for transfer) owned by such holder having a fair
market value equal to the exercise price of the number of Shares being
purchased; such fair market value to be determined as of the date immediately
preceding the date on which the Option is exercised, or otherwise as may be
required in order to comply with the requirements of any applicable laws or
regulations; or
	 
	 	 	 	 	 	 
	 	 	(k).	 	in part, by delivering to the Company an executed promissory
note on such terms and conditions as the Board shall in its sole discretion
determine; provided however, that the par value of such Shares shall be paid in
cash and the amount of such note shall not violate any applicable margin
regulations.

	6.4.  	Certificates/Legends: Upon satisfaction of all pre-requisites to the issuance of
Shares, a certificate or certificates for the Shares purchased shall be issued by the Company
in the name of the person exercising the Option and shall be delivered to or upon the order of
such person or persons. The Company may place such legends upon the certificates, and may
issue such “stop transfer” instructions to its transfer agent in respect of such Shares, as
the Board or the Board of Directors in its discretion determines to be necessary or
appropriate (i) to prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act; or (ii) to implement the provisions of any agreement
between the Company and the Option holder with respect to such Shares.

	6.5.  	Expenses of Issuance: The Company shall pay all issue or transfer taxes with respect
to the issuance of Shares upon the purchase thereof by the holder of an Option, as well as all
fees and expenses necessarily incurred by the Company in connection with such issuance.

	6.6.  	Certain Preconditions to Issuance: If at any time after the date hereof, the Board
of Directors shall determine in its discretion that the listing, registration or qualification
of the Shares upon any
national securities exchange or under any state or federal law, or the consent or approval of
any governmental regulatory body is necessary or desirable as a condition of, or in connection
with, the sale or purchase of Shares, no Shares shall be delivered unless and until such
listing, registration, qualification, consent or approval shall have been effected or obtained,
or otherwise provided for, free of any conditions that the Board of Directors deems
unacceptable.

	6.7.  	Use of Proceeds: The cash proceeds of the sale of Shares pursuant to Options shall
be added to the general funds of the Company and may be used for its general corporate
purposes.

ARTICLE 7. TERMINATION OF OPTION HOLDERS

	7.1.  	Termination of Employment or Service: The Plan shall not impose any obligation
on the Company or on a Subsidiary or Parent to continue the employment or to continue to
retain the services of any holder of an Option and shall not impose any obligation on the part
of any holder of an Option to remain in the employ of, or to continue to render services to,
the Company or a Subsidiary or Parent.

Page 4 of 6

 

	7.2.  	Death/Permanent Disability/Retirement: Upon termination of service as a director or
consultant, or upon termination of employment of an employee of the Company or of a Subsidiary
or Parent by reason of death, permanent disability or retirement, any Option previously
granted shall thereupon become exercisable in full and shall remain exercisable by the Option
holder or the legal representative of such holder, as the case may require, for a period of
one (1) year after the date of such termination notwithstanding an earlier expiration date set
forth in the Option grant; provided that no incentive stock option may be exercised as such
more than ten (10) years after its date of grant. Any written notice of exercise by a legal
representative shall be accompanied by proof of the right of such person to act for the Option
holder.

	7.3.  	Termination for Cause: Notwithstanding anything herein to the contrary, a person to
whom an Option has been granted shall forfeit all rights in and to such Option if the
termination of his service as a director or consultant or his employment as an employee was
for cause, such forfeiture to be effective on the date of such termination.

	7.4.  	Other Terminations: Upon termination of service or employment other than for cause
or by reason of death, permanent disability or retirement, any Option previously granted to
the extent not exercised prior to the date of such termination shall remain exercisable to the
extent that it was exercisable at the date of termination for a period of thirty (30) days
thereafter.

	7.5.  	Transfers: The transfer of an Option holder between or among the Company, a
Subsidiary or a Parent shall not be deemed a termination of his or her service or employment.

ARTICLE 8. ADJUSTMENTS TO SHARES

Notwithstanding any other provision contained herein, in the event of a merger,
consolidation, reorganization, recapitalization, stock dividend, stock split, split-up,
split-off, combination of shares, exchange of shares, issuance of rights to subscribe, or
change in capital structure of the Company, appropriate adjustment shall be made by the Board
to the total number of Shares and to the number of Shares and price per Share subject to
outstanding Options as shall be equitable to prevent dilution or enlargement of rights under
Options. Fractional Shares resulting from any such adjustment shall be rounded up or down or
paid in cash in the sole discretion of the Board. The determination of the Board as to all of
the foregoing matters shall be final and binding on the holders of Options.

ARTICLE 9. AMENDMENT OF THE PLAN

The Board of Directors may from time-to-time amend the Plan. The rights and obligations
under any Option granted before amendment of the Plan shall not be adversely affected by such
amendment without the consent of the holder of the Option.

ARTICLE 10. TERMINATION OR SUSPENSION OF THE PLAN

The Board of Directors may at any time suspend or terminate the Plan. Unless sooner
terminated by action of the Board of Directors, the Plan shall terminate at the close of
business on the Termination Date. An Option may not be granted while the Plan is suspended or
after its termination. Rights and obligations under any Option granted while the Plan is in
effect shall not be altered or impaired by the suspension or termination of the Plan except
with the consent of the holder of such Option. The power of the Board to construe and
administer any Options granted prior to the termination or suspension of the Plan shall
nevertheless continue after such termination or during any suspension.

ARTICLE 11. ARBITRATION

Page 5 of 6

 

In the event that any dispute relating to or arising from this Plan cannot be settled by
the parties, they shall submit the dispute to an arbitrator in New York City selected in the
following manner:

	 	 	 	 	 	 	 	 	 
	

	 	 	11.1.	 	 	Within twenty (20) days of receiving written demand for arbitration, each
party involved in the dispute shall select an individual to represent him in the
selection of the arbitrator.
	 
	 	 	 	 	 	 	 	 
	

	 	 	11.2.	 	 	If the individuals selected by the parties cannot agree upon an impartial
arbitrator within thirty (30) days from the date written demand for arbitration is
filed, the arbitrator shall be selected by a judge of the court having jurisdiction
over the parties upon three (3) days’ notice.

Any arbitration shall be conducted in accordance with the rules of the American Arbitration
Association then in effect, and judgment may be entered on the arbitrator’s award in a court of
competent jurisdiction.

ARTICLE 12. GOVERNING LAW

The Plan, the Options and all related matters shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware from time to time obtaining
without regard to choice of laws provisions.

Adopted by the Board of Directors and approved by the sole stockholder on June 12, 1989

Amended by the Board of Directors and approved by the Sole stockholder on April 5, 1993

Amended by the Board of Directors and approved by the sole stockholder on May 3, 1999

Approved by the sole stockholder of the Company this 3rd day of May, 1999.

The Hallwood Group Incorporated

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	 	 	 
	

	 	Anthony J. Gumbiner, Chairman
	 	 

Page 6 of 6

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