HOMEPLEX MORTGAGE INVESTMENTS CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 21st day of
December, 1995, by and between HOMEPLEX MORTGAGE INVESTMENTS CORPORATION, a
Maryland corporation ("Homeplex"), and ALAN D. HAMBERLIN ("Hamberlin").
WHEREAS, Hamberlin is an employee of Homeplex and has served
as its Chief Executive Officer since its organization;
WHEREAS, Hamberlin and Homeplex have entered into an Amended
and Restated Employment Agreement as of the same date hereof (the "Employment
Agreement"); and
WHEREAS, Homeplex considers it desirable and its best interest
that in lieu of a regular salary Hamberlin be given an inducement to acquire a
proprietary interest in Homeplex and added incentive to advance the interest of
Homeplex by possessing an option to purchase shares of the common stock of
Homeplex (the "Stock").
NOW, THEREFORE, in consideration of the promises and of the
mutual covenants herein contained, it is agreed by and between the parties as
follows:
1. Grant of Option. Homeplex grants to Hamberlin, as of the
date of this Agreement (the "Grant Date"), the right, privilege and option (the
"Option") to purchase 750,000 shares of Stock (the "Optioned Shares"), subject
in all respects to the terms, conditions and provisions of this Agreement.
2. Option Price. The purchase price of the Optioned Shares
(the "Option Price") is $1.50, which is 100 percent of the fair market value per
share of the Stock on the date of grant of this option.
3. Vesting of Option.
(a) Vesting Schedule. Optioned Shares that have
vested may be acquired in accordance with the terms of this Agreement at any
time, and from time to time, in whole or in part, until the Option expires as
provided in Section 5 hereof. The time at which the Optioned Shares vest and the
Hamberlin or his permitted assignee(s) (each, an "Optionholder") may thereafter
exercise this Option with respect to such Optioned Shares shall be as follows:
(i) 200,000 of the Optioned Shares shall
vest immediately;
(ii) 275,000 of the Optioned Shares shall
vest on the first anniversary of the Grant Date provided Hamberlin is either
employed by Homeplex on that date or has left the employment of Homeplex
pursuant to a Consented Termination as described in Section 6(e) of the
Employment Agreement; and
(iii) 275,000 of the Optioned Shares shall
vest on the second anniversary of the Grant Date provided Hamberlin is either
employed by Homeplex on that date or has left the employment of Homeplex
pursuant to a Consented Termination as described in Section 6(e) of the
Employment Agreement.
Notwithstanding the foregoing, all Optioned Shares shall accelerate and vest
upon a Change in Control (as defined in the Employment Agreement) or upon the
termination of Hamberlin's employment (without his consent) by Homeplex for any
reason other than death, disability, a Consented Termination, or Cause (as that
term is used in the Employment Agreement).
(b) Acceleration. Homeplex may, in its discretion,
allow the Optioned Shares to be purchased prior to any vesting date.
4. Exercise of Option. All or any portion of the vested
Optioned Shares may be purchased by an Optionholder upon written notice to
Homeplex, addressed to Homeplex at its principal place of business. Such notice
shall be signed by the Optionholder and shall state the election to exercise the
Option and the number of Optioned Shares with respect to which it is being
exercised. Such notice shall be accompanied by payment in full of the Option
Price for the number of shares of Stock being purchased. Payment may be made in
cash or by check or by tendering duly endorsed certificates representing shares
of Stock then owned by the Optionholder. In the sole discretion of Homeplex, an
Optionholder may be provided with the election to pay for the Option Price by
having Homeplex withhold, from the Stock otherwise issuable, a portion of those
shares of Stock with an aggregate fair market value equal to that portion of the
Option Price designated by the Optionholder (not to exceed 100% of the Option
Price). Upon the exercise of the Option, Homeplex shall deliver, or cause to be
delivered, to the Optionholder a certificate or certificates representing the
net shares of Stock purchased upon such exercise as soon as practicable after
payment for those shares has been received by Homeplex. All shares that are
purchased and paid for in full upon exercise of the Option shall be fully paid
and non-assessable but may not be transferred, sold, assigned or conveyed by
Optionholder for six months from the date of shareholder approval as required by
Section 22 hereof.
5. Termination of Option. This Option, to the extent not
previously exercised, shall terminate upon the fifth anniversary of the Grant
Date, or as otherwise set forth in this Agreement.
6. Death or Disability of Hamberlin. If Hamberlin's employment
with Homeplex is terminated pursuant to the Employment Agreement upon the death
or disablement of Hamberlin, the Optioned Shares that are vested as of the date
of death or Disablement Commencement Date (as defined in the Employment
Agreement), whichever is applicable, shall be exercisable within one year of the
Date of Termination (as defined in the Employment Agreement) or until the stated
expiration date of the Option, whichever occurs first, by an Optionholder in
accordance with Section 4 hereof. If Hamberlin dies after a Consented
Termination, the Optioned Shares that are vested as of the date of death shall
be exercisable within one year of such date of death or until the stated
expiration date of the Option, whichever occurs first, by Hamberlin's
successors-in-interest.
7. No Privilege of Stock Ownership. An Optionholder shall not
have any of the rights of a stockholder with respect to the Optioned Shares
until such Optionholder shall have
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exercised the option, paid the Option Price, and received a stock certificate
for the purchased shares of Stock.
8. Compliance With Laws and Regulations. The exercise of this
Option and the issuance of the Stock upon such exercise shall be subject to
compliance by Homeplex and each Optionholder with all applicable requirements of
law relating thereto and with all applicable regulations of any stock exchange
in which the shares of the Stock may be listed at the time of such exercise and
issuance. In connection with the exercise of an Option hereunder, an
Optionholder shall execute and deliver to Homeplex such representations in
writing as may be requested by Homeplex in order for it to comply with
applicable requirements of federal and state securities laws.
9. Liability of Homeplex. The inability of Homeplex to obtain
approval from any regulatory body having authority deemed by Homeplex to be
necessary to the lawful issuance and sale of any Stock pursuant to this
Agreement shall relieve Homeplex of any liability with respect to the
nonissuance or sale of the Stock as to which such approval shall not have been
obtained. Homeplex, however, shall use its best efforts to obtain all such
approvals.
10. Capital Adjustments. The number of Optioned Shares shall
be proportionately adjusted for any increase or decrease in the number of
outstanding shares of Stock of Homeplex resulting from a subdivision or
consolidation of shares or any other capital adjustment or the payment of a
stock dividend or any other increase or decrease in the number of such shares
effected without Homeplex's receipt of consideration therefor in money, services
or property.
11. Mergers, Etc. If Homeplex is the surviving corporation in
any merger or consolidation (not including a Corporate Transaction), the Option
granted herein shall pertain to and apply to the securities to which a holder of
the number of shares of Stock subject to the Option or Award would have been
entitled prior to the merger or consolidation.
12. Corporate Transaction. In the event of stockholder
approval of a Corporate Transaction that is not a Change in Control, all
unvested Options shall automatically accelerate and immediately vest so that
each outstanding Option shall, one week prior to the specified effective date
for the Corporate Transaction, become fully exercisable for all of the Optioned
Shares. Upon the consummation of the Corporate Transaction, all Options shall,
to the extent not previously exercised, terminate and cease to be outstanding.
"Corporate Transaction" shall mean (a) a merger or consolidation in which
Homeplex is not the surviving entity or (b) any reverse merger in which Homeplex
is the surviving entity.
13. Assignment. The right to acquire Stock under this
Agreement may not be assigned, encumbered or otherwise transferred by
Optionholder other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code of 1986, as amended, Title 1 of the Employment Retirement Income
Security Act, or the rules thereunder.
14. Securities Restrictions
(a) Legend on Certificates. All certificates
representing shares of Stock issued hereunder shall be endorsed with a legend
reading as follows:
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The shares of Common Stock evidenced by this
certificate have been issued to the
registered owner in reliance upon written
representations that these shares have been
purchased solely for investment. These shares
may not be sold, transferred or assigned
unless in the opinion of Homeplex and its
legal counsel such sale, transfer or
assignment will not be in violation of the
Securities Act of 1933, as amended, and the
rules and regulations thereunder.
(b) Private Offering for Investment Only. If the
shares to be issued to an Optionholder upon the exercise of any Option have not
been registered under the 1933 Act, the Arizona Act or the securities laws of
any other jurisdiction, those shares will be "restricted securities" within the
meaning of Rule 144 under the 1933 Act and must be held indefinitely without any
transfer, sale or other disposition unless (a) the shares are subsequently
registered under the 1933 Act, the Arizona Act and the securities laws of any
other applicable jurisdiction, or (b) the Optionholder obtains an opinion of
counsel which is satisfactory to counsel for Homeplex that the shares may be
sold in reliance on an exemption from registration requirements. By the act of
accepting an Option, Hamberlin agrees (i) that, any shares of Stock acquired
will be solely for investment not with any intention to resell or redistribute
those shares and (ii) such intention will be confirmed by an appropriate
certificate at the time the Stock is acquired if requested by Homeplex. The
neglect or failure to execute such a certificate, however, shall not limit or
negate the foregoing agreement.
(c) Registration Statement. If a registration
statement covering the shares of Stock issuable hereunder as filed under the
Securities Exchange Act of 1933, as amended, and as declared effective by the
Securities Exchange Commission (the "Registration"), the provisions of Sections
14(a) and (b) shall terminate during the period of time that such registration
statement, as periodically amended, remains effective. The Company shall use its
best efforts to effect the Registration within six months after shareholder
approval is obtained as required by Section 22 hereof.
15. Tax Withholding.
(a) General. Homeplex's obligation to deliver Stock
under this Agreement shall be subject to Hamberlin's satisfaction of all
applicable federal, state and local income tax withholding requirements.
(b) Shares to Pay for Withholding. Homeplex may, in
its discretion and in accordance with the provisions of this Section 15(b) and
such supplemental rules as it may from time to time adopt (including any
applicable safe-harbor provisions of SEC Rule 16b-3), provide Hamberlin with the
right to use shares of Stock in satisfaction of all or part of the federal,
state and local income tax liabilities incurred by Hamberlin in connection with
the receipt of Stock ("Taxes"). Such right may be provided to Hamberlin in
either or both of the following formats:
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(i) Stock Withholding. Hamberlin may be
provided with the election to have Homeplex withhold, from the Stock otherwise
issuable, a portion of those shares of Stock with an aggregate fair market value
equal to the percentage of the applicable Taxes (not to exceed 100 percent)
designated by Hamberlin.
(ii) Stock Delivery. Homeplex may, in its
discretion, provide Hamberlin with the election to deliver to Homeplex, at the
time the Option is exercised, one or more shares of Stock previously acquired by
Hamberlin (other than pursuant to the transaction triggering the Taxes) with an
aggregate fair market value equal to the percentage of the taxes incurred in
connection with such Option exercise (not to exceed 100 percent) designated by
Hamberlin.
16. Binding Effect. This agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
17. Defined Terms. All capitalized terms herein which are not
otherwise defined therein shall have the same meaning ascribed to such terms in
the Employment Agreement.
18. Notices. Any notice required to be given or delivered to
Homeplex under the terms of this Agreement shall be in writing and addressed to
Homeplex in care of the Corporate Secretary at its principal corporate offices.
Any notice required to be given or delivered to Hamberlin at the address
indicated on the signature page hereto. Any permitted assignee hereunder shall
notify the other party hereto of the permitted assignee's address for purposes
of this notice provision. All notices shall be deemed to have been given or
delivered upon personal delivery or upon deposit in the U.S. mail, postage
prepaid return receipt requested, and properly addressed to the party to be
notified.
19. Integration, Modification and Amendment. This Agreement
and the Employment Agreement embody the full understanding of the parties with
respect to the subject matter hereof, superseding any and all prior agreements,
and no amendment or modification thereof shall be effective unless the same
shall be in writing and signed by both of said parties. Notwithstanding the
foregoing, this Agreement may not be amended or modified more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder. In addition,
any amendment to this Agreement shall be required to be approved by the
shareholders if the amendment would: (a) materially increase the benefits
accruing to Hamberlin; (b) materially increase the number of shares of Stock
which may be issued hereunder; or (c) materially modify the requirements for
Hamberlin's eligibility for participation hereunder.
20. Governing Law. Except as the corporate law of the State of
Maryland expressly applies hereto, this Agreement shall be construed in
accordance with, and governed by, the laws of the State of Arizona, without
regard to application of conflicts of law principles.
21. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which,
taken together, shall constitute one and the same instrument.
22. Shareholder Approval. The grant of this Option is subject
to approval by the shareholders of Homeplex. Such approval must be by a majority
of the votes cast provided that the
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total vote cast on the proposal represents over 50 percent in interest of all
securities entitled to vote on the matter. Notwithstanding any provision of this
Agreement to the contrary, the Option may not be exercised in whole or in part
until such shareholder approval is obtained. In the event that such shareholder
approval is not obtained within three years of the Grant Date, then the Option
shall terminate and an Optionholder hereunder shall have no further rights under
this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement or caused it to be executed on the day and year first above written.
HOMEPLEX MORTGAGE INVESTMENTS
CORPORATION, a Delaware corporation
By: ________________________________________
Name: ______________________________________
Its: _______________________________________
____________________________________________
Alan D. Hamberlin
Address:
____________________________________
____________________________________
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