Schedule 13D/A

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TG2vkMOTM7FAkwd66UND9sk3zXzvepKvBa3L7MIM8spgpw0V8PuKgXQi5Fi7prZb 9ZQIh+QljddpRkinuXPjeg== 0001193125-11-008384.txt : 20110114 0001193125-11-008384.hdr.sgml : 20110114 20110114170245 ACCESSION NUMBER: 0001193125-11-008384 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20110114 DATE AS OF CHANGE: 20110114 GROUP MEMBERS: AJAY SAREEN GROUP MEMBERS: ANTHONY M. SANFILIPPO GROUP MEMBERS: FRANK DRAZKA GROUP MEMBERS: JOHN C. SHAW, JR. GROUP MEMBERS: JOHN W. MASCONE GROUP MEMBERS: PETER ZUGSCHWERT FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PASTERNAK KENNETH D CENTRAL INDEX KEY: 0001090901 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: C/O CHESTNUT RIDGE CAPITAL, LLC STREET 2: 50 TICE BLVD. CITY: WOODCLIFF LAKE STATE: NJ ZIP: 07677 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HUDSON HOLDING CORP CENTRAL INDEX KEY: 0000804157 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 411546471 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-39281 FILM NUMBER: 11530920 BUSINESS ADDRESS: STREET 1: 111 TOWN SQUARE PLACE, STREET 2: SUITE 1500A CITY: JERSEY CITY STATE: NJ ZIP: 07310 BUSINESS PHONE: 201-216-0100 MAIL ADDRESS: STREET 1: 111 TOWN SQUARE PLACE, STREET 2: SUITE 1500A CITY: JERSEY CITY STATE: NJ ZIP: 07310 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH OUTCOMES MANAGEMENT INC DATE OF NAME CHANGE: 19951116 FORMER COMPANY: FORMER CONFORMED NAME: DATA MED CLINICAL SUPPORT SERVICES INC /MN/ DATE OF NAME CHANGE: 19920703 SC 13D/A 1 dsc13da.htm SCHEDULE 13D/A Schedule 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 4)*

Hudson Holding Corporation

(Name of issuer)

Common Stock, par value $0.001 per share

(Title of class of securities)

443793104

(CUSIP number)

Hudson Holding Corporation

111 Town Square Place

Suite 1500A

Jersey City, NJ 07310

(Name, address and telephone number of person authorized to receive notices and communications)

January 4, 2011

(Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No. 443793104			Page 2 of 19 Pages
1.	Names of reporting persons. Anthony M. Sanfilippo
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 7,105,000
		8.	Shared voting power 41,346,864
		9.	Sole dispositive power 7,105,000
		10.	Shared dispositive power 41,346,864
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN


CUSIP No. 443793104			Page 3 of 19 Pages
1.	Names of reporting persons. Peter Zugschwert
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 866,344
		8.	Shared voting power 47,585,520
		9.	Sole dispositive power 866,344
		10.	Shared dispositive power 47,585,520
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN


CUSIP No. 443793104			Page 4 of 19 Pages
1.	Names of reporting persons. John C. Shaw, Jr.
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 1,031,722
		8.	Shared voting power 47,420,142
		9.	Sole dispositive power 1,031,722
		10.	Shared dispositive power 47,420,142
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN


CUSIP No. 443793104			Page 5 of 19 Pages
1.	Names of reporting persons. John W. Mascone
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 1,031,722
		8.	Shared voting power 47,420,142
		9.	Sole dispositive power 1,031,722
		10.	Shared dispositive power 47,420,142
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN


CUSIP No. 443793104			Page 6 of 19 Pages
1.	Names of reporting persons. Kenneth D. Pasternak
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 16,513,511
		8.	Shared voting power 31,938,353
		9.	Sole dispositive power 16,513,511
		10.	Shared dispositive power 31,938,353
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN


CUSIP No. 443793104			Page 7 of 19 Pages
1.	Names of reporting persons. Ajay Sareen
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 1,250,000
		8.	Shared voting power 47,201,864
		9.	Sole dispositive power 1,250,000
		10.	Shared dispositive power 47,201,864
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN


CUSIP No. 443793104			Page 8 of 19 Pages
1.	Names of reporting persons. Frank Drazka
2.	Check the appropriate box if a member of a group (see instructions) (a) ¨ (b) x
3.	SEC use only
4.	Source of funds (see instructions) PF, OO
5.	Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
6.	Citizenship or place of organization United States of America
Number of shares beneficially owned by each reporting person with		7.	Sole voting power 1,300,000
		8.	Shared voting power 47,151,864
		9.	Sole dispositive power 1,300,000
		10.	Shared dispositive power 47,151,864
11.	Aggregate amount beneficially owned by each reporting person 48,451,864
12.	Check if the aggregate amount in Row (11) excludes certain shares (see instructions) ¨
13.	Percent of class represented by amount in Row (11) 56.8%
14.	Type of reporting person (see instructions) IN

This Amendment No. 4 (this “Amendment”) amends and restates in its entirety the Statement on Schedule 13D (as amended, the “Statement”), dated January 10, 2006, as amended on November 28, 2006, January 5, 2009 and January 29, 2010, filed by Kenneth D. Pasternak. In addition to Mr. Pasternak, this Amendment is being filed with the Securities and Exchange Commission (the “SEC”) by Anthony M. Sanfilippo, Peter Zugschwert, John C. Shaw, Jr., John W. Mascone, Ajay Sareen and Frank Drazka to add such persons to the Statement and to report their and Mr. Pasternak’s entrance into that certain Stockholder Voting Agreement, dated as of January 4, 2011 (the “Voting Agreement”), by and among Rodman & Renshaw Capital Group, Inc., a Delaware corporation (“Parent”) and Keith R. Knox, Seaport Hudson LLC, and Messrs. Sanfilippo, Zugschwert, Shaw, Mascone, Pasternak, Sareen and Drazka (each party thereto a “Stockholder” and collectively, the “Stockholders”). The Voting Agreement was entered into in connection with the signing of an Agreement and Plan of Merger, dated as of January 4, 2011 (the “Merger Agreement”), by and among Parent, HHC Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”) and Hudson Holding Corporation, a Delaware corporation (the “Issuer”). Pursuant to the Merger Agreement, the Issuer will merge with and into Merger Sub, with Merger Sub surviving as a wholly owned subsidiary of Parent.

Item 1. Security and the Issuer.

This Statement relates to the common stock, par value $0.001 per share (the “Common Stock”) of the Issuer, whose principal executive offices are located at 111 Town Square Place, Suite 1500A, Jersey City, NJ 07310.

Item 2. Identity and Background.

(a)	This Amendment is being filed by:

(i)

Anthony M. Sanfilippo;

(ii)

Peter Zugschwert;

(iii)

John C. Shaw, Jr.;

(iv)

John W. Mascone;

(v)

Kenneth D. Pasternak;

(vi)

Ajay Sareen; and

(vii)

Frank Drazka.

Messrs. Sanfilippo, Zugschwert, Shaw, Mascone, Pasternak, Sareen and Drazka are referred to herein collectively as the “Reporting Persons,” and each individually, a “Reporting Person.” Information with respect to each Reporting Person is given solely by such Reporting Person, and no Reporting Person assumes responsibility for the accuracy or completeness of information furnished by another Reporting Person. The Reporting Persons are filing this Amendment jointly, pursuant to the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as separate persons and not as members of a group. See Exhibit 99.1 for the Reporting Persons’ Joint Filing Agreement.

(b)	The address of each of the Reporting Persons is c/o Hudson Holding Corporation, 111 Town Square Place, Suite 1500A, Jersey City, NJ 07310.

(c)	(i) Anthony M. Sanfilippo is a director of the Issuer and its Chief Executive Officer.

(ii)

Peter J. Zugschwert is a director of the Issuer and previously served as its Chief Executive Officer.

(iii)

John C. Shaw, Jr. has been retired since 2005. He serves as a director of the Issuer.

(iv)

John W. Mascone is a director of the Issuer and is Managing Director of Convertibles and Leveraged Credit of The Seaport Group LLC, a privately held firm established in 2001 that provides institutional sales and trading services, investment banking and research and analysis. The Seaport Group LLC’s principal offices are located at 360 Madison Avenue, 22nd Floor, New York, New York 10017.

(v)

Kenneth D. Pasternak is the founder and Chief Executive Officer of Chestnut Ridge Capital, LLC, a money management firm that acts as a general partner to investment partnerships. Chestnut Ridge Capital, LLC’s principal offices are located at 10 Forest Avenue, Paramus, NJ 07652.

(vi)

Ajay Sareen is Chief Administrative Officer of Hudson Securities, Inc., a wholly owned subsidiary of the Issuer. Hudson Securities, Inc.’s principal offices are located at 111 Town Square Place, Suite 1500A, Jersey City, NJ 07310.

(vii)

Frank Drazka is Managing Director and Head of Investment Banking of Hudson Securities, Inc.

(d)	None of the Reporting Persons and, to the best of their knowledge, the Issuer, Chestnut Ridge Capital, LLC, Hudson Securities, Inc. and The Seaport Group LLC, during the last five years, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)

None of the Reporting Persons and, to the best of their knowledge, the Issuer, Chestnut Ridge Capital, LLC, Hudson Securities, Inc. and The Seaport Group LLC, during the last five years, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)	Each Reporting Person is a United States citizen.

Item 3. Source and Amount of Funds or Other Consideration.

Anthony M. Sanfilippo

Mr. Sanfilippo purchased 105,000 shares of Common Stock using personal funds prior to becoming an officer and director of the Issuer.

On October 12, 2009, Mr. Sanfilippo was granted 2,500,000 shares of Common Stock pursuant to that certain Employment Agreement, dated as of October 12, 2009, between Mr. Sanfilippo and the Issuer (the “Sanfilippo Employment Agreement”) and a restricted stock award agreement with the Issuer. Pursuant to such agreements, 625,000 of the shares vested on the date of grant and the remaining 1,875,000 shares vested or were scheduled to vest in equal annual installments commencing October 12, 2010.

On October 12, 2009, pursuant to the Sanfilippo Employment Agreement and a stock option award agreement with the Issuer, Mr. Sanfilippo was granted an option to purchase 2,500,000 shares of Common Stock at an exercise price of $0.50 per share under the Issuer’s 2007 Long-Term Incentive Plan. Pursuant to such agreements, the option to purchase 625,000 of the shares vested on the date of grant and the remaining options vested or were scheduled to vest in equal annual installments commencing October 12, 2010. In connection with its approval of the Merger Agreement, on January 4, 2011, the board of directors of the Issuer accelerated the vesting of all outstanding restricted shares of Common Stock and all outstanding options to purchase Common Stock that were not then vested as of January 4, 2011 (the “Acceleration”).

On November 12, 2009, Mr. Sanfilippo purchased 2,000,000 shares of Common Stock using personal funds in a private placement for an aggregate purchase price of $500,000.00.

The unvested portion of such restricted stock and stock option awards vested on January 4, 2011 as a result of the Acceleration.

Peter Zugschwert

On August 15, 2006, Mr. Zugschwert was granted 10,000 options to purchase shares of Common Stock at an exercise price of $1.15 per share pursuant to the Issuer’s 2005 Stock Option Plan.

On July 19, 2007, Mr. Zugschwert was granted 25,000 options to purchase shares of Common Stock at $0.40 per share pursuant to the Issuer’s 2005 Stock Option Plan.

From May 7, 2008, through January 3, 2011, Mr. Zugschwert was granted 616,988 shares of Common Stock pursuant to the Issuer’s 2007 Long-Term Incentive Plan.

The unvested portion of such restricted stock and stock option awards vested on January 4, 2011 as a result of the Acceleration.

John C. Shaw, Jr.

On November 12, 2009, Mr. Shaw purchased 800,000 shares of Common Stock using personal funds in a private placement for an aggregate purchase price of $200,000.00.

From July 7, 2010, through January 3, 2011, Mr. Shaw was granted 231,722 shares of Common Stock pursuant to the Issuer’s 2007 Long-Term Incentive Plan.

The unvested portion of such restricted stock awards vested on January 4, 2011 as a result of the Acceleration.

John W. Mascone

On November 12, 2009, Mr. Mascone purchased 800,000 shares of Common Stock using personal funds in a private placement for an aggregate purchase price of $200,000.00.

From July 7, 2010, through January 3, 2011, Mr. Mascone was granted 231,722 shares of Common Stock pursuant to the Issuer’s 2007 Long-Term Incentive Plan.

The unvested portion of such restricted stock awards vested on January 4, 2011 as a result of the Acceleration.

Kenneth D. Pasternak

On January 1, 2006, Mr. Pasternak purchased 6,581,076 shares of Common Stock using personal funds directly from the Issuer for an aggregate purchase price of $2,000,000.00.

On November 28, 2006, Mr. Pasternak purchased 1,666,670 shares of Common Stock and warrants to purchase an additional 833,335 shares of Common Stock, directly from the Issuer for an aggregate purchase price of $1,000,002.00. The source of funding for this purchase was through personal funds.

From December 22, 2008, through January 5, 2009, Chestnut Ridge Partners, LP (“Chestnut Ridge”) purchased 550,000 shares in the open market for a total consideration of $111,858.00. Mr. Pasternak is the managing member of Chestnut Ridge Capital, LLC, which serves as the general partner of Chestnut Ridge, and he has the sole power to vote and dispose of the Issuer’s securities owned by Chestnut Ridge. The funds required for the purchase of the 550,000 shares of Common Stock were obtained from the investment funds of Chestnut Ridge. Each of the Reporting Persons other than Mr. Pasternak expressly disclaim beneficial ownership of the shares held by Chestnut Ridge.

On November 12, 2009, Mr. Pasternak purchased 6,000,000 shares of Common Stock using personal funds directly from the Issuer for an aggregate purchase price of $1,500,000.00.

On December 31, 2009, Mr. Pasternak purchased 650,000 shares of Common Stock using personal funds from third parties for an aggregate purchase price of $162,300.00.

From July 7, 2010, through January 3, 2011, Mr. Pasternak was granted 231,722 shares of Common Stock pursuant to the Issuer’s 2007 Long-Term Incentive Plan.

The unvested portion of such restricted stock and stock option awards vested on January 4, 2011 as a result of the Acceleration.

Ajay Sareen

Pursuant that certain employment agreement between Mr. Sareen and the Issuer, dated as of November 5, 2009 (the “Sareen Employment Agreement”) and a restricted stock award agreement with the Issuer, Mr. Sareen was granted 500,000 shares of Common Stock.

Pursuant to the Sareen Employment Agreement and a stock option award agreement with the Issuer, Mr. Sareen was granted an option to purchase 500,000 shares of Common Stock at an exercise price of $0.50 per share under the Issuer’s 2007 Long-Term Incentive Plan.

On November 12, 2009, Mr. Sareen purchased 250,000 shares of Common Stock using personal funds in a private placement for an aggregate purchase price of $62,500.00.

The unvested portion of such restricted stock and stock option awards vested on January 4, 2011 as a result of the Acceleration.

Frank Drazka

Mr. Drazka purchased 300,000 shares in the open market at market prices.

Pursuant that certain employment agreement between Mr. Drazka and the Issuer, dated as of April 29, 2010 (the “Drazka Employment Agreement”) and a restricted stock award agreement with the Issuer, Mr. Drazka was granted 500,000 shares of Common Stock.

Pursuant to the Drazka Employment Agreement and a stock option award agreement with the Issuer, Mr. Drazka was granted an option to purchase 500,000 shares of Common Stock at an exercise price of $0.50 per share under the Issuer’s 2007 Long-Term Incentive Plan.

The unvested portion of such restricted stock and stock option awards vested on January 4, 2011 as a result of the Acceleration.

By virtue of the Voting Agreement, the Reporting Persons may be deemed to beneficially own 16,000,000 securities beneficially owned by Seaport Hudson LLC, a Delaware limited liability company (“Seaport”), and 3,353,565 securities beneficially owned by Keith R. Knox (collectively with Seaport, the “Other Stockholder Parties”). The following is the Reporting Persons’ understanding of the source and amount of consideration for purchases and sales of Common Stock by the Other Stockholder Parties:

Seaport

Pursuant to a Securities Purchase Agreement dated June 20, 2008, Seaport acquired 8,000,000 shares of Common Stock and a warrant to purchase up to 4,000,000 shares of Common Stock for an aggregate purchase price of $4,000,000.00. The warrant is exercisable at any time during the five-year period following the date of issuance at an exercise price of $0.75 per share of Common Stock, subject to certain limited adjustments. All funds used to purchase the shares of Common Stock and the warrant to acquire shares of Common Stock pursuant to the Securities Purchase Agreement came directly from the working capital of Seaport.

Pursuant to a Securities Purchase Agreement dated October 14, 2009, on November 12, 2009, Seaport acquired 4,000,000 shares of Common Stock from the Issuer for an aggregate purchase price of $1,000,000.00. All funds used to purchase the shares of Common Stock came directly from the working capital of Seaport.

Keith R. Knox

As of May 3, 2005, after giving effect to the Issuer’s September 6, 2005 one-for-eight reverse stock split, Mr. Knox held 4,348,565 shares of Common Stock purchased using personal funds.

From June 12, 2006, through August 8, 2007, Mr. Knox sold 995,000 shares of Common Stock.

On October 2, 2007, Mr. Knox made a bona-fide gift of an aggregate of 150,000 shares of Common Stock to his three children.

The Reporting Persons may be deemed to be a member of a group with the other Stockholders with respect to the Issuer or the Common Stock for purposes of Section 13(d) of the Exchange Act by virtue of being parties to the Voting Agreement (as defined below in Item 4). Each of the Reporting Persons expressly disclaims (i) any such group membership for purposes of Section 13(d) of the Exchange Act or otherwise and (ii) beneficial ownership, for purposes of Section 13(d) of the Exchange Act or otherwise, over any securities held by the other Stockholders.

Each of the Reporting Persons declares that neither the filing of this Statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) of the Exchange Act or any other purpose, (i) acting (or has agreed or is agreeing to act together with any other person) as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding or disposing of securities of the Issuer or otherwise with respect to the Issuer or any securities of the Issuer, (ii) a member of any group with respect to the Issuer or any securities of the Issuer or (iii) the beneficial owner of any securities held by the other Stockholders.

Item 4. Purpose of the Transaction.

Merger Agreement

On January 4, 2011, Parent, Merger Sub and the Issuer entered into the Merger Agreement. The Merger Agreement provides that Parent will acquire all of the outstanding shares of Common Stock in a stock-for-stock merger (the “Merger”) using an exchange ratio of 0.0338 shares of Parent common stock for each share of Issuer Common Stock. The deal is valued at approximately $7.0 million, based upon a $2.69 valuation per share of Parent’s common stock. The exchange ratio and aggregate merger consideration are subject to adjustment, up or down, based upon the net liquid assets of the Issuer at the effective time of the Merger. The Merger Agreement provides that at the effective time of the Merger, the Issuer will merge with and into Merger Sub, with Merger Sub continuing as a wholly owned subsidiary of Parent.

At the effective time of the Merger, each outstanding Issuer stock option will terminate and each outstanding Issuer warrant will convert into a warrant to acquire 0.0338 shares of Parent common stock, subject to appropriate adjustment to the exercise price.

The Merger Agreement contains customary representations, warranties and covenants, including, among other things, covenants that, subject to certain exceptions: (i) the Issuer will conduct its business in the ordinary course consistent with past practice until the earlier of the effective time of the Merger and termination of the Merger Agreement; (ii) Parent and the Issuer will each use their reasonable best efforts to take all actions necessary, proper or advisable under applicable laws and regulations to consummate the Merger and the other transactions contemplated by the Merger Agreement; and (iii) the Issuer will not solicit, initiate or knowingly take any action that it knows or reasonably should know would facilitate or encourage the submission of any alternative acquisition proposal.

Consummation of the Merger is subject to various conditions, including: (i) adoption of the Merger Agreement by the Issuer’s stockholders in accordance with Delaware law; (ii) the absence of any applicable law that prohibits, makes illegal or enjoins the consummation of the Merger; (iii) the joint Registration Statement and Proxy Statement on Form S-4 having been declared effective by the SEC; and (iv) FINRA approval of the transaction.

The Merger Agreement contains certain termination rights for both Parent and the Issuer, including the right of the Issuer, under certain circumstances, to terminate the Merger Agreement in order to enter into an alternative business combination that constitutes a “Superior Proposal” (as defined in the Merger Agreement). The Merger Agreement further provides that, under specified circumstances, the Issuer may be required to pay Parent a termination fee of $350,000.00.

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference as Exhibit 99.7 hereto.

Voting Agreement

As a condition to Parent entering into the Merger Agreement, on January 4, 2011, the Stockholders entered into the Voting Agreement, in each case with respect to all of the shares of Issuer Common Stock beneficially owned by such Stockholders (collectively, the “Voting Agreement Shares”). The Stockholders agreed to take the following actions, among others: (1) vote all Voting Agreement Shares in favor of the Merger; and (2) vote the Voting Agreement Shares against any action, transaction or agreement that would result in a breach in respect of any covenant, representation or warranty or any other obligation or agreement of the Issuer under the Merger Agreement or the Voting Agreement.

The Reporting Persons may be deemed to be a member of a group with the other Stockholders with respect to the Issuer or the Common Stock for purposes of Section 13(d) of the Exchange Act by virtue of being parties to the Voting Agreement. Each of the Reporting Persons expressly disclaims (i) any such group membership for purposes of Section 13(d) of the Exchange Act or otherwise and (ii) beneficial ownership, for purposes of Section 13(d) of the Exchange Act or otherwise, over any securities held by the other Stockholders.

A copy of the form of Voting Agreement is incorporated herein by reference as Exhibit 99.8 hereto. The foregoing description of the Voting Agreement is qualified in its entirety by reference to the full text of the form of Voting Agreement.

Except as set forth in this Amendment, none of the Reporting Persons nor, to the best knowledge of the Reporting Persons, none of the Other Stockholder Parties, has formulated any plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer.

(a) As of January 4, 2011, pursuant to the Voting Agreement, each Stockholder may be deemed to beneficially own the Voting Agreement Shares which represent approximately 56.8% of the shares of Common Stock that would have been outstanding as of January 4, 2011, if all outstanding options and warrants were exercised into shares of Common Stock.

Each Reporting Person declares that neither the filing of this Statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) of the Exchange Act or any other purpose, the beneficial owner of any securities held by the other Stockholders.

(b) Number of shares as to which each Reporting Person has:

(i)

sole power to vote or to direct the vote:

See Item 7 on the cover page(s) hereto.

(ii)

shared power to vote or to direct the vote:

See Item 8 on the cover page(s) hereto.

(iii)

sole power to dispose or to direct the disposition of:

See Item 9 on the cover page(s) hereto.

(iv)

shared power to dispose or to direct the disposition of:

See Item 10 on the cover page(s) hereto.

Each of the Reporting Persons, by virtue of the Voting Agreement, may be deemed to have shared power to vote those Voting Agreement Shares attributable to the Other Stockholder Parties.

(c) The following transactions in Common Stock were effected during the past sixty days or since the most recent filing of Schedule 13D, whichever is less, by the Reporting Persons, and to the extent known by the Reporting Persons, the Other Shareholders:

On January 3, 2011, Peter Zugschwert, John C. Shaw, Jr., John W. Mascone, and Kenneth D. Pasternak were each granted 197,239 shares of Common Stock by the Issuer pursuant to the Issuer’s 2007 Long-Term Incentive Plan.

(d) To each Reporting Person’s knowledge, no person other than the Stockholders has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock covered by this Statement.

(e)	Not applicable.

Item 6. Contract, Arrangements, Understandings, or Relationships with respect to Securities of the Issuer.

The descriptions of the Merger Agreement and the Voting Agreement in Item 4 are incorporated by reference into this Item 6.

Restricted Stock and Stock Option Award Agreements

The restricted stock and stock option awards described in Item 3 were made pursuant to the Issuer’s standard form restricted stock and stock option award agreements, copies of which are incorporated by reference into this Amendment as Exhibits 99.2 and 99.3, respectively.

Sanfilippo Employment Agreement

The description of the Sanfilippo Employment Agreement in Item 3 is incorporated by reference into this Item 6. Such description is qualified by reference to the copy of the Sanfilippo Employment Agreement incorporated as Exhibit 99.10 to this Amendment, which Exhibit is also incorporated into this Item 6 by reference.

Agreement to Terminate 2008 Registration Rights Agreement; Warrant Amendment

In connection with the Merger Agreement, the Issuer entered into amendments to: (i) terminate the 2008 Registration Rights Agreement, effective upon the Effective Time (as defined in the Merger Agreement) of the Merger and (ii) remove references to registration rights in that certain Warrant No. 001, issued on June 20, 2008 to Seaport, to purchase 4,000,000 shares of Issuer Common Stock (the “Warrant”), effective upon the Effective Time.

On January 4, 2010, the Issuer and Seaport entered into that certain Agreement to Terminate Registration Rights Agreement (the “Agreement to Terminate”), whereby the parties agreed to terminate that certain Registration Rights Agreement, dated June 20, 2008, by and between the parties (the “2008 Registration Rights Agreement”), effective upon the Effective Time. The 2008 Registration Rights Agreement provides Seaport with certain registration rights with respect to the shares underlying the Warrant.

In conjunction with the execution of the Agreement to Terminate, on January 4, 2011, the Issuer and Seaport also entered into that certain Amendment to Stock Purchase Warrant (the “Warrant Amendment”) to, among other things, amend the terms of the Warrant to eliminate references to the 2008 Registration Rights Agreement, effective upon the Effective Time.

Copies of the Warrant Amendment, Agreement to Terminate, Warrant and 2008 Registration Rights Agreement are incorporated herein by reference as Exhibits 99.5, 99.6, 99.11 and 99.12 to this Amendment, respectively. The foregoing descriptions of the Warrant Amendment, Agreement to Terminate, Warrant and 2008 Registration Rights Agreement are qualified in their entirety by reference to the full text of such documents.

Agreement to Terminate 2009 Registration Rights Agreement

In connection with the Merger Agreement, the Issuer entered into amendments to terminate the 2009 Registration Rights Agreement, effective upon the Effective Time of the Merger.

On January 5, 2011, the Issuer, Seaport, and Messrs. Pasternak, Sanfilippo and Sareen entered into that certain Consent of Majority Investor Holders and Majority Management Holders to Termination of Registration Rights Agreement, dated as of January 4, 2011 (the “Consent to Terminate”). Pursuant to the terms of the Consent to Terminate, the parties agreed, among other things, to terminate that certain Registration Rights Agreement, as amended, dated October 14, 2009, by and among the Issuer, Seaport, Ken Pasternak, Anthony M. Sanfilippo, Ajay Sareen and certain other stockholders and investors as indicated on the signature pages thereto (the “2009 Registration Rights Agreement”), effective upon the Effective Time. The 2009 Registration Rights Agreement provides the parties thereto other than the Issuer with certain demand and incidental registration rights with respect to their holdings of Issuer Common Stock.

Copies of the Consent to Terminate and the 2009 Registration Rights Agreement are incorporated herein by reference as Exhibits 99.4 and 99.9 to this Amendment, respectively. The foregoing descriptions of the Consent to Terminate and the 2009 Registration Rights Agreement are qualified in their entirety by reference to the full text of such documents.

Except as otherwise described herein, the Reporting Persons do not have any contracts, arrangements, understandings or relationships (legal or otherwise), including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, between the Reporting Persons and any other person with respect to any securities of the Issuer, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

Item 7. Material to be Filed as Exhibits.

The following exhibits are filed as exhibits hereto:


Exhibit		Description of Exhibit

99.1		Joint Filing Agreement, dated as of January 14, 2011, by and among the Reporting Persons (filed herewith)

99.2		Form of Restricted Stock Award Agreement under the Issuer’s 2007 Long-Term Incentive Plan (filed herewith)

99.3		Form of Nonqualified Stock Option Agreement under the Issuer’s 2005 Stock Option Plan and the Issuer’s 2007 Long-Term Incentive Plan (filed herewith)

99.4		Consent of Majority Investor Holders and Majority Management Holders to Termination of Registration Rights Agreement, dated as of January 4, 2011, by and among the Issuer, Seaport, Ken Pasternak, Anthony M. Sanfilippo and Ajay Sareen (incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 10, 2011, File No. 000-15936)

99.5		Amendment to Stock Purchase Warrant, dated January 4, 2011, by and between the Issuer and Seaport Hudson LLC (incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 10, 2011, File No. 000-15936)

99.6		Agreement to Terminate Registration Rights Agreement, dated January 4, 2011, by and between the Issuer and Seaport (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 10, 2011, File No. 000-15936)

99.7		Agreement and Plan of Merger, dated January 4, 2011, by and among Rodman & Renshaw Capital



		Group, Inc., HHC Acquisition, Inc. and the Issuer (incorporated herein by reference to Exhibit 2.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 5, 2011, File No. 000-15936)

99.8		Form of Voting Agreement by and among Rodman & Renshaw Capital Group, Inc. and the Stockholders, dated as of January 4, 2011 (incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 5, 2011, File No. 000-15936)

99.9		Form of Registration Rights Agreement, dated as of October 14, 2009, by and among the Issuer and the signatories thereto (incorporated herein by reference to Exhibit 10.5 of the Quarterly Report on Form 10-Q filed with the SEC by the Issuer on November 16, 2009, File No. 000-15936)

99.10		Employment Agreement, as of October 12, 2009, by and between the Issuer and Anthony M. Sanfilippo (incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed with the SEC by the Issuer on November 16, 2009, File No. 000-15936)

99.11		Stock Purchase Warrant, issued to Seaport Hudson LLC, dated as of June 20, 2008 (incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on June 20, 2008, File No. 000-15936)

99.12		Form of Registration Rights Agreement, entered into by and between the Issuer and Seaport Hudson LLC, dated as of June 20, 2008 (incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC by the Issuer on June 20, 2008, File No. 000-15936)

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


Date:	January 14, 2011	/s/ Anthony M. Sanfilippo
		Anthony M. Sanfilippo

	January 14, 2011	/s/ Peter Zugschwert
		Peter Zugschwert

	January 14, 2011	/s/ John C. Shaw, Jr.
		John C. Shaw, Jr.

	January 14, 2011	/s/ John W. Mascone
		John W. Mascone

	January 14, 2011	/s/ Kenneth D. Pasternak
		Kenneth D. Pasternak

	January 14, 2011	/s/ Ajay Sareen
		Ajay Sareen

	January 14, 2011	/s/ Frank Drazka
		Frank Drazka

EXHIBIT INDEX


Exhibit		Description of Exhibit

99.1		Joint Filing Agreement, dated as of January 14, 2011, by and among the Reporting Persons (filed herewith)

99.2		Form of Restricted Stock Award Agreement under the Issuer’s 2007 Long-Term Incentive Plan (filed herewith)

99.3		Form of Nonqualified Stock Option Agreement under the Issuer’s 2005 Stock Option Plan and the Issuer’s 2007 Long-Term Incentive Plan (filed herewith)

99.4		Consent of Majority Investor Holders and Majority Management Holders to Termination of Registration Rights Agreement, dated as of January 4, 2011, by and among the Issuer, Seaport, Ken Pasternak, Anthony M. Sanfilippo and Ajay Sareen (incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 10, 2011, File No. 000-15936)

99.5		Amendment to Stock Purchase Warrant, dated January 4, 2011, by and between the Issuer and Seaport Hudson LLC (incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 10, 2011, File No. 000-15936)

99.6		Agreement to Terminate Registration Rights Agreement, dated January 4, 2011, by and between the Issuer and Seaport (incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 10, 2011, File No. 000-15936)

99.7		Agreement and Plan of Merger, dated January 4, 2011, by and among Rodman & Renshaw Capital Group, Inc., HHC Acquisition, Inc. and the Issuer (incorporated herein by reference to Exhibit 2.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 5, 2011, File No. 000-15936)

99.8		Form of Voting Agreement by and among Rodman & Renshaw Capital Group, Inc. and the Stockholders, dated as of January 4, 2011 (incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on January 5, 2011, File No. 000-15936)

99.9		Form of Registration Rights Agreement, dated as of October 14, 2009, by and among the Issuer and the signatories thereto (incorporated herein by reference to Exhibit 10.5 of the Quarterly Report on Form 10-Q filed with the SEC by the Issuer on November 16, 2009, File No. 000-15936)

99.10		Employment Agreement, as of October 12, 2009, by and between the Issuer and Anthony M. Sanfilippo (incorporated herein by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed with the SEC by the Issuer on November 16, 2009, File No. 000-15936)

99.11		Stock Purchase Warrant, issued to Seaport Hudson LLC, dated as of June 20, 2008 (incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC by the Issuer on June 20, 2008, File No. 000-15936)

99.12		Form of Registration Rights Agreement, entered into by and between the Issuer and Seaport Hudson LLC, dated as of June 20, 2008 (incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC by the Issuer on June 20, 2008, File No. 000-15936)

EX-99.1 2 dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

JOINT FILING AGREEMENT

Pursuant to, and in accordance with, the requirements of Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, and subject to the limitations set forth therein, each party hereto hereby agrees to jointly file a Statement on Schedule 13D (including amendments thereto) with regard to the common stock of Hudson Holding Corporation, a Delaware corporation, and further agrees that this Joint Filing Agreement be included as an exhibit to such joint filings.

The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate.

The Joint Filing Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument.

In evidence thereof, the undersigned, being duly authorized, hereby execute this Joint Filing Agreement as of the date set forth below.

Dated: January 14, 2011

/s/ Anthony M. Sanfilippo

Anthony M. Sanfilippo

/s/ Peter Zugschwert

Peter Zugschwert

/s/ John C. Shaw, Jr.

John C. Shaw, Jr.

/s/ John W. Mascone

John W. Mascone

/s/ Kenneth D. Pasternak

Kenneth D. Pasternak

/s/ Ajay Sareen

Ajay Sareen

/s/ Frank Drazka

Frank Drazka

EX-99.2 3 dex992.htm EXHIBIT 99.2 Exhibit 99.2

Exhibit 99.2

HUDSON HOLDING CORPORATION

2007 LONG-TERM INCENTIVE COMPENSATION PLAN

RESTRICTED STOCK AWARD AGREEMENT

This RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made and entered into by and between Hudson Holding Corporation, a Delaware corporation (the “Company”), and , an employee of the Company or a Subsidiary Corporation (“Grantee”), as of this day of .

Pursuant to the Hudson Holding Corporation 2007 Long-Term Incentive Compensation Plan (the “Plan”), the Board of Directors of the Company (the “Board”) has determined that the Grantee shall be granted restricted shares of the Company’s common stock, par value $.001 per share (the “Restricted Stock”) upon the terms and subject to the conditions hereinafter contained. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan.

Section 1. Number of shares of Restricted Stock. On the effective date hereof, the Company hereby grants to Grantee shares of Restricted Stock, at no cost to the Grantee.

Section 2. Vesting. The Restricted Stock will vest as follows:


Vesting Dates		Percent of Grant

Section 3. Issuance of Restricted Stock. The Restricted Stock will be issued in uncertificated form. The Restricted Stock will be recorded in the name of the Grantee in the books and records of the Company’s transfer agent. Upon vesting and Grantee’s compliance with Section 8 hereof, the Company shall cause certificates for the Restricted Stock to be issued to Grantee.

Section 4. Transferability. The Restricted Stock may not be sold, transferred, pledged, exchanged, hypothecated or otherwise transferred or encumbered in any manner prior to vesting except by will or the laws of descent and distribution. The transferee of any Restricted Stock will be subject to all restrictions, terms, and conditions applicable to the Restricted Stock, including such further agreements and restrictions as may be required as a condition of the grant or issuance of shares.

Section 5. Termination of Employment. If the Grantee does not remain employed by the Company through the Final Vesting Date, all shares of Restricted Stock not vested as of the date Grantee is no longer employed by the Company will be forfeited.

Section 6. Shareholder Rights and Restrictions. The Grantee will generally have no rights of a shareholder with respect to the Restricted Stock prior to vesting, except to the extent necessary to comply with the Internal Revenue Code of 1986, as amended, in which event Grantee agrees to vote any shares of Restricted Stock in accordance with the recommendations of the Board of Directors of the Company.

Section 7. Taxes. The Grantee hereby agrees to pay to the Company any federal, state, or local taxes of any kind required by law to be withheld and remitted by the Company with respect to the Restricted Stock. The Grantee may satisfy such tax obligation, in whole or in part, by electing to have the Company withhold a portion of the Restricted Stock otherwise to be delivered upon vesting of the Restricted Stock with a Fair Market Value equal to the amount of such taxes. The election, if any, must be made on or before the date that the amount of tax to be withheld is determined. If the Grantee does not make such payment to the Company, the Company shall have the right to withhold from any payment of any kind otherwise due to the Grantee from the Company, any federal, state or local taxes of any kind required by law to be withheld with respect to the award or vesting of the Restricted Stock.

Section 8. Securities Law Compliance.

(a) The Grantee agrees that the Company may impose such restrictions on the Restricted Stock as are deemed advisable by the Company, including, without limitation, restrictions relating to listing or trading requirements. The Grantee further agrees that certificates representing the Restricted Stock may bear such legends and statements as the Company shall deem appropriate or advisable to assure, among other things, compliance with applicable securities laws, rules, and regulations.

(b) The Grantee agrees that any Restricted Stock which the Grantee may acquire by virtue of this Agreement may not be transferred, sold, assigned, pledged, hypothecated or otherwise disposed of by the Grantee unless (i) a registration statement or post-effective amendment to a registration statement under the Securities Act of 1933, as amended, with respect to such Restricted Stock has become effective so as to permit the sale or other disposition of such Restricted Stock by the Grantee, or (ii) there is presented to the Company an opinion of counsel satisfactory to the Company to the effect that the sale or other proposed disposition of such Restricted Stock by the Grantee may lawfully be made otherwise than pursuant to an effective registration statement or post-effective amendment to a registration statement relating to such Restricted Stock under the Securities Act of 1933, as amended.

Section 9. Rights of the Grantee. The granting of the Restricted Stock shall in and of itself not confer any right of the Grantee to continue in the employ of the Company, any subsidiary or affiliate and shall not interfere in any way with the right of the Company, any subsidiary or affiliate to terminate the Grantee’s employment at any time, subject to the terms of any employment agreement between the Company and the Grantee.

Section 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, except to the extent otherwise governed by federal law.

Section 11. Right to Withhold Amounts Owed to the Company. The Company shall have the right to condition the vesting of any shares of Restricted Stock on the Grantee’s payment of all amounts then due and owing to the Company or any subsidiary or affiliate.

IN WITNESS WHEREOF, the parties have subscribed their names hereto.


Attest:						HUDSON HOLDING CORP.

By:						By:

DATE OF GRANT:

ACCEPTANCE OF AGREEMENT

The Grantee hereby:

(a) Acknowledges that he has received a copy of the Company’s most recent Annual Report and other communications routinely distributed to the Company’s shareholders;

(b) Accepts this Agreement and the Restricted Stock granted to him under this Agreement subject to all provisions of this Agreement;

(c) Represents and warrants to the Company that he is acquiring the Restricted Stock for his own account, for investment, and not with a view to or any present intention of selling or distributing the Restricted Stock either now or at any specific or determinable future time or period or upon the occurrence or nonoccurrence of any predetermined or reasonably foreseeable event; and

(d) Agrees that no transfer of the Restricted Stock will be made unless the Restricted Stock have been duly registered under all applicable federal and state securities laws pursuant to a then effective registration which contemplates the proposed transfer or unless the Company has received the written opinion of, or satisfactory to, its legal counsel that the proposed transfer is exempt from such registration.

Grantee’s Signature:



		Date:

(Print Name):

EX-99.3 4 dex993.htm EXHIBIT 99.3 Exhibit 99.3

HUDSON HOLDING CORPORATION

NONQUALIFIED STOCK OPTION AGREEMENT


Option Agreement Number:		NSO -

Date of Grant/Award:

Name of Optionee:

Optionee’s Social Security Number:

Vesting Dates:

Expiration Date:

1. Grant of Option.

(a) Pursuant to the (the “Plan”) of Hudson Holding Corporation (the “Company”), a Stock Option (the “Option”), dated as of the Date of Grant/Award set forth above (the “Grant Date”), is hereby granted to the above-named Optionee. The award of this Option (the “Award”) conveys to the Optionee the right to purchase from the Company up to shares of common stock (the “Common Stock”) at an exercise price of $ per share (the “Option Shares”).

(b) The Option awarded hereunder is intended to be a nonqualified stock option and is specifically not intended to be treated as an Incentive Stock Option as such term is defined under Section 422 of the Code.

2. Vesting. The Option Shares will vest and expire in accordance with the following vesting schedule:


Shares	Full Vest Date	Expiration Date

3. Exercise of Option.

(a) The Option may be exercised with respect to all or any part of the number of vested Option Shares by the giving of written notice (“Notice”) of the intent to exercise to the Company. The Notice shall specify the exercise date and the number of Option Shares as to which the Option is to be exercised.

(b) Full payment, in cash, of the Option exercise price shall be made on or before the exercise date specified in the Notice. Such full payment having occurred on or before the exercise date specified in the Notice, or as soon thereafter as is practicable, the Company shall cause to be delivered to the Optionee a certificate or certificates for the Option Shares then being purchased. If the Optionee fails to pay for any of the Option Shares specified in the Notice, or fails to accept delivery of Option Shares, the Optionee’s right to purchase such Option Shares may be terminated by the Company.

(c) The Administrator (as defined below), in its absolute and sole discretion, may authorize any one or more of the following additional methods of payment of the Option exercise price:

(i) Delivery by the Optionee of shares of Common Stock previously owned by the Optionee for all or part of the Option exercise price, provided, that, subject to Section 6.2 of the Plan, the Fair Market Value of such shares being delivered is equal on the date of exercise to the Option exercise price, or such portion thereof as the Optionee is authorized to pay by delivery of such stock; or

(ii) Through the surrender of shares of Common Stock then issuable upon the exercise of the Option, provided, that, subject to Section 6.2 of the Plan, the Fair Market Value of such shares is equal on the date of exercise to the Option exercise price, or such portion thereof as the Optionee is authorized to pay by surrender of such stock.

(d)	During the Optionee’s lifetime, the Option granted hereunder shall be exercisable only by the Optionee.

Expiration Date. To the extent not previously exercised, the Option and all rights with respect thereto, shall terminate and become null and void upon the Expiration Date shown above.

Fractional Shares. No fractional shares of Common Stock will be issued upon the exercise of this Option.

Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below:

(a)	“Administrator” shall have the meaning defined in Section 4 of the Plan.

(b)	“Agreement” means this Nonqualified Stock Option Agreement, dated May 10, 2010.

(c)	“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

(d)	“Fair Market Value” means

(i) the closing price of shares of Common Stock of the Company or other securities of the Company on the date before the date the value is to be determined on the principal recognized securities exchange or recognized securities market on which such stock is reported, but if selling prices are not reported, its fair market value shall be the mean between the high bid and low asked prices for such stock on the date before the date the value is to be determined (or if there are no quoted prices for such date, then for the last preceding business day on which there were quoted prices).

(ii) In the absence of an established market for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company’s net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including goodwill of the Company, the economic outlook in the Company’s industry, the Company’s position in the industry, the Company’s management, and the values of stock of other corporations in the same or similar line of business.

7. Termination. The Option may be exercised at any time or from time to time prior to the Expiration Date in accordance with the vesting schedule set forth above (the “Option Term”). The Option Term is contingent upon the continued service of the Optionee with the Company. The Option shall be exercisable after the Optionee’s termination of employment with the Company only during the applicable time period determined in accordance with the following provisions and thereafter shall terminate:

(a) DISABILITY. If the Optionee becomes permanently and totally disability (within the meaning of Section 22(e)(3) of the Code) while employed by the Company or any of its affiliates (the “Termination”), or within the period that the Option remains exercisable after Termination, an Option then held, to the extent exercisable on the date on which the Optionee’s employment terminated, may be exercised in whole or in part by the Optionee (or the Optionee’s guardian or personal representative) at any time within twelve (12) months after the permanent and total disability of the Optionee, but in any event no later than the Expiration Date.

(b) DEATH. If the Optionee’s employment terminates because of the death of the Optionee, an Option then held, to the extent exercisable on the date on which the Optionee’s employment terminated, may be exercised in whole or in part by the Optionee’s legal representative or by the person to whom the Option is transferred by devise or the laws of descent and distribution, at any time within twelve (12) months after the death of the Optionee, but in any event no later than the Expiration Date.

(c)

RETIREMENT. If the Optionee’s employment terminates because of retirement,, an Option then held at the date of Termination, to the extent exercisable on the date on which the Optionee’s employment terminated by reason of retirement, may be exercised in whole or in part by the Optionee at any time within three (3) months of the date of such Termination, but in any event no later than the Expiration Date; provided, however, that if such exercise of the Option would result in liability for the Optionee under Section 16(b) of the Securities Exchange Act of

1934, as amended, then such three month period automatically shall be extended until the tenth day following the last date upon which the Optionee has any liability under Section 16(b), but in any event no later than the Expiration Date

d) TERMINATION FOR CAUSE; RESIGNATION WITHOUT GOOD REASON. If the Optionee is terminated for Cause or resigns without Good Reason, the Option shall terminate as of the date of any such termination for Cause or resignation without Good Reason.

(e) OTHER TERMINATION OF SERVICE. If the Optionee’s employment terminates for any reason, other than death. Retirement, termination for Cause, resignation without Good Reason or permanent and total disability, an Option then held at the date of Termination, to the extent exercisable on the date on which the Optionee’s employment terminated, may be exercised in whole or in part by the Optionee at any time within two (2) months of the date of such Termination, but in any event no later than the Expiration Date; provided, however, that if such exercise of the Option would result in liability for the Optionee under Section 16(b) of the Securities Exchange Act of 1934, as amended, then such two-month period automatically shall be extended until the tenth day following the last date upon which the Optionee has any liability under Section 16(b), but in any event no later than the Expiration Date.

Changes in Capital Structure; Corporate Transactions.

(a) In the event of a stock split, reverse stock split, stock dividend, or recapitalization, combination or reclassification or similar change in the capital structure of the Company, appropriate adjustments shall be made by the Board of Directors of the Company (the “Board”) in (i) the number and class of shares of stock subject to the Plan and each Option outstanding under the Plan, and (ii) the exercise price per share of any outstanding Option.

(b) In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify the Optionee at least 30 days prior to such proposed action. To the extent not previously exercised, the Option shall terminate immediately prior to the consummation of such proposed action; provided, however, that the Administrator, in its sole discretion, may permit the exercise of the Option prior to its termination, even if such Option was not otherwise exercisable.

(c) In the event of a merger or consolidation of the Company with or into another corporation or entity in which the Company does not survive, or in the event of a sale of all or substantially all of the assets of the Company in which the shareholders of the Company receive securities of the acquiring entity or an affiliate thereof, the Option shall be assumed or equivalent options shall be substituted by the successor corporation (or other entity) or a parent or subsidiary of such successor corporation (or other entity); provided, however, that if such successor does not agree to assume the Options or to substitute equivalent options therefor, the

Administrator, in its sole discretion, may permit the exercise of the Option prior to consummation of such event, even if such Option were not otherwise exercisable.

(d) The grant of Awards under the Plan shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

9. Stockholder Rights. Until the date a stock certificate is issued to the Optionee, the Optionee shall have no rights as a stockholder with respect to the Option Shares, and no adjustments shall be made for dividends of any kind or nature, distributions, or other rights for which the record date is prior to the date such stock certificate is issued.

10. Stock Certificate. Until the Option Shares are registered, each certificate representing the Option Shares shall be stamped or otherwise imprinted with a legend substantially in the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR IF APPLICABLE, STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT THE OPTION OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED

11.

No Transfer or Assignment.

(a) Neither (i) this Agreement, (ii) any of the rights, benefits, duties or obligations hereunder, nor (iii) the Option Shares, may be transferred or assigned without the prior written consent of the Company.

(b) Notwithstanding the foregoing, the Option Shares may be transferable (i) by will or by the laws of descent and distribution, in the case of the death of the Optionee, or (ii) pursuant to a qualified domestic relations order.

12. Amendment. The Company may unilaterally amend the Award at any time if the Company determines, in its sole discretion that amendment is necessary or advisable in light of any applicable addition to or change in the Code, any regulations issued thereunder, or any federal or state securities law or other applicable law or regulation.

13. Acknowledgement. The Optionee acknowledges having received and read a copy of this Agreement and the Plan and agrees to comply with the Plan and all laws, rules and

regulations applicable to the Award and to the sale or other disposition of the Common Stock of the Company received.

14. Entire Agreement. This Agreement contains the entire understanding between the parties. No other representations or covenants have induced either party to execute this Agreement, and this Agreement supersedes all prior understandings among the parties hereto with respect to the subject matter contained herein.

15. Notices. Any notice to the Company provided for in this Agreement shall be addressed to it in care of its Secretary at its executive offices located at 111 Town Square Place, Jersey City, New Jersey 07310, and any notice to the Optionee shall be addressed to the Optionee at the address currently shown on the payroll records of the Company. Any notice shall be deemed duly given if and when properly addressed and posted by registered or certified mail, postage prepaid.

16. Severability. If any provision of this Agreement is held to be illegal or invalid for any reason, the remaining provisions are to remain in full force and effect and are to be construed and enforced in accordance with the purposes of this Agreement as if the illegal or invalid provision or provisions did not exist.

17. Headings. The section headings of this Agreement are for convenience of reference only and do not form a part of the terms of this Agreement.

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Nonqualified Stock Option Agreement, and the Optionee has placed his or her signature hereon, effective as of the Grant Date.

HUDSON HOLDING CORPORATION

By: ________________________________

Name:

Title:

ACCEPTED AND AGREED TO:

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