NON-QUALIFIED STOCK OPTION AGREEMENT
pursuant to the
RAND LOGISTICS, INC.
2007 LONG-TERM INCENTIVE PLAN
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Optionee: Laurence S. Levy
Grant Date: February 15, 2008
Per Share Exercise Price: $5.81
Number of Option Shares subject to this Option: 104,255
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THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Rand Logistics, Inc., a Delaware corporation (the “Company”), and the Optionee specified above, pursuant to the Rand Logistics, Inc. 2007 Long-Term Incentive Plan, as in effect and as amended from time to time (the “Plan”); and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the non-qualified stock option provided for herein to the Optionee.
NOW, THEREFORE, in consideration of the mutual covenants and premises 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 grant of the option 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 under the Plan. The Optionee hereby acknowledges receipt of a true copy of the Plan and that the Optionee 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.
2. Grant of Option. The Company hereby grants to the Optionee, as of the Grant Date specified above, a non-qualified stock option (this “Option”) to acquire from the Company at the Per Share Exercise Price specified above the aggregate number of shares of the Common Stock specified above (the “Option Shares”). This Option is not to be treated as (and is not intended to qualify as) an incentive stock option within the meaning of Section 422 of the Code.
3. No Dividends Equivalents. The Optionee shall not be entitled to receive a cash payment in respect of the Option Shares underlying this Option on any dividend payment date for the Common Stock.
4. Exercise of this Option.
4.1 This Option shall become exercisable as follows:
| · | 33 1/3%, on the first anniversary of the Grant Date, provided the Optionee is then employed by or performing services at such time for the Company and/or one of its Subsidiaries; |
| · | 66 2/3%, on the second anniversary of the Grant Date, provided the Optionee is then employed by or performing services at such time for the Company and/or one of its Subsidiaries; and |
| · | 100%, on the third anniversary of the Grant Date, provided the Optionee is then employed by or performing services at such time for the Company and/or one of its Subsidiaries. |
4.2 Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, this Option shall expire and shall no longer be exercisable after the expiration of ten years from the Grant Date (the “Option Period”).
4.3 In no event shall this Option be exercisable for a fractional share of Common Stock.
4.4 Upon an Optionee’s death or disability (as determined under the Company’s long-term disability plan), this Option shall become 100% exercisable under this Agreement as of such date.
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5. Method of Exercise and Payment. This Option shall be exercised by the Optionee by delivering to the Secretary of the Company or his designated agent on any business day (the “Exercise Date”) a written notice, in such manner and form as may be required by the Company, specifying the number of the Option Shares the Optionee then desires to acquire (the “Exercise Notice”). The Exercise Notice shall be accompanied by payment of the aggregate Per Share Exercise Price for such number of the Option Shares to be acquired upon such exercise. Such payment shall be made in the manner set forth in Section 6.5 of the Plan.
6. Termination.
6.1 If the Optionee's employment with the Company and/or one of its Subsidiaries terminates for any reason, any then unexercisable portion of this Option shall be forfeited and cancelled by the Company.
6.2 If the Optionee’s employment with the Company and/or its Subsidiaries terminates for any reason other than due to the Optionee's death or disability (as defined and determined by the Company), the Optionee’s rights, if any, to exercise any then exercisable portion of this Option, shall terminate ninety (90) days after the date of such termination, but not beyond the expiration of the Option Period, and thereafter such Option shall be forfeited and cancelled by the Company.
6.3 If Optionee's termination of employment with the Company and/or its Subsidiaries is due to the Optionee's death or disability, the Optionee (or the Optionee's estate, designated beneficiary or other legal representative, as the case may be and as determined by the Committee) shall have the right to exercise this Option at any time within the one (1) year period following such termination due to death or disability, but not beyond the expiration of the Option Period, and thereafter such Option shall be forfeited and cancelled by the Company.
6.4 The Board or the Committee, in its sole discretion, may determine that all or any portion of this Option, to the extent exercisable immediately prior to the Optionee's termination of employment with the Company and/or its Subsidiaries for any reason, may remain exercisable for an additional specified time period after the period specified above in this Section 6 expires (subject to any other applicable terms and provisions of the Plan and this Agreement), but not beyond the expiration of the Option Period.
6.5 If the Optionee's employer ceases to be a Subsidiary of the Company, that event shall be deemed to constitute a termination of employment under Section 6.2 above.
7. Change of Control.
7.1 In the event of a Change of Control, this option shall become fully exercisable.
7.2 "Change of Control" shall mean (A) the consummation of a merger, reorganization, consolidation or other transaction involving the Company, or sale of voting stock by the shareholders of the Company, in each case following which the holders of voting stock of the Company immediately prior to the consummation of such transaction do not hold at least 50.1% of the voting stock of the surviving entity, (B) the sale of all or substantially all the assets of the Company, or (C) a series of related transactions which has the effects referred to in clause (A) or (B) of this sentence.
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8. Transferability.
8.1 Except as provided in Section 8.2, this Option, and any rights or interests therein, shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way at any time by the Optionee (or any beneficiary(ies) of the Optionee), other than by testamentary disposition by the Optionee or the laws of descent and distribution. This Option shall not be pledged, encumbered or otherwise hypothecated in any way at any time by the Optionee (or any beneficiary(ies) of the Optionee) and shall not be subject to execution, attachment or similar legal process. Any attempt to sell, exchange, pledge, transfer, assign, encumber or otherwise dispose of or hypothecate this Option, or the levy of any execution, attachment or similar legal process upon this Option, contrary to the terms of this Agreement and/or the Plan shall be null and void and without legal force or effect. This Option shall be exercisable during the Optionee’s lifetime only by the Optionee.
8.2 During the Optionee's lifetime, the Optionee may, with the consent of the Committee, transfer without consideration all or any portion of this Option to one or more members of his or her Immediate Family, to a trust established for the exclusive benefit of one or more members of his or her Immediate Family, to a partnership in which all the partners are members of his or her Immediate Family, or to a limited liability company in which all the members are members of his or her Immediate Family. For purposes of this Agreement, "Immediate Family" means the Optionee's children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half-brothers and half-sisters), in-laws, and all such relationships arising because of legal adoption; provided, however, that any such Immediate Family, and any such trust, partnership and limited liability company, shall agree to be and shall be bound by the terms and provisions of the Plan, and by the terms and provisions of any applicable outstanding award agreements or other agreements covering the Options or the shares subject to the Options.
9. Entire Agreement; Amendment. This Agreement 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 Board or 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; provided, however, that no such modification or amendment shall materially adversely affect the rights of the Optionee under this Option without the consent of the Optionee. The Company shall give written notice to the Optionee 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 Optionee.
10. Notices. Any Exercise Notice or other notice which may be required or permitted under this Agreement shall be in writing, and shall be delivered in person or via facsimile transmission, overnight courier service or certified mail, return receipt requested, postage prepaid, properly addressed as follows.
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10.1 If such notice is to the Company, to the attention of the Secretary of Rand Logistics, Inc., 461 Fifth Avenue, 25th Floor, New York, New York 10017 or at such other address as the Company, by notice to the Optionee, shall designate in writing from time to time.
10.2 If such notice is to the Optionee, at his or her address as shown on the Company’s records, or at such other address as the Optionee, by notice to the Company, shall designate in writing from time to time.
11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles of conflict of laws thereof.
12. Compliance with Laws. The issuance of this Option (and the Option Shares upon exercise of this Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act of 1933, the Exchange Act and the 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 Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.
13. 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 Optionee shall not assign any part of this Agreement without the prior express written consent of the Company.
14. 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 one and the same instrument.
15. 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.
16. Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as any party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.
17. Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Optionee has hereunto set his hand, all as of the Grant Date specified above.
RAND LOGISTICS, INC. | ||||
| By: | /s/ Edward Levy | |||
| Name: | Edward Levy | |||
| Title: | President | |||
| /s/ Laurence S. Levy | ||||
| Laurence S. Levy | ||||
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