SWS GROUP INC
NON-QUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS
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<DESCRIPTION>NON-QUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B><U>Exhibit 10.10</U> </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SOUTHWEST SECURITIES GROUP, INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>NONQUALIFIED STOCK OPTION AGREEMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>FOR NON-EMPLOYEE DIRECTORS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. <U>Grant of Option</U>. Pursuant to the Southwest Securities Group, Inc. Stock Option Plan (the &#147;Plan&#148;) for non-employee directors of
Southwest Securities Group, Inc. (the &#147;Company&#148;), the Company grants to </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><HR WIDTH="21%" SIZE="1" NOSHADE COLOR="#000000"> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">(the &#147;Option Holder&#148;) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">a nonqualified option to purchase from the Company a total of<B> <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></B> shares of Common
Stock, $0.10 par value, of the Company (the &#147;Common Stock&#148;) at <B>$ <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </B>per share, in the amounts, during the periods and upon the terms and conditions set
forth in this Agreement. This option is not intended to constitute an incentive option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. <U>Time of Exercise</U>. Except only as specifically provided elsewhere in this Agreement, this option shall be 100%
exercisable at any time on or after six months following the date of grant provided that the grantee is still a non-employee director six months following the date of grant. In the event of the Option Holder&#146;s termination of service as a
non-employee director, after the six months following the date of grant, the option will continue to be exercisable subject to the limitations of Section 4 of this Agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Subject to Plan</U>. This option and the grant and exercise thereof are subject to the terms and conditions of the
Plan, which is incorporated herein by reference and made a part hereof, but the terms of the Plan shall not be considered an enlargement of any benefits under this Agreement. In addition, this option is subject to any rules and regulations
promulgated pursuant to the Plan, now or hereafter in effect. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">4. <U>Term</U>. This option will terminate at the first of the following: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">5 p.m. on <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>. </FONT></TD></TR></TABLE> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">5 p.m. on the date 180 days following the date of the Option Holder&#146;s death or disability. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">5 p.m. on the date the Option Holder&#146;s service as a non-employee director terminates for reasons of dishonesty, whether in the course of his service on the Board or otherwise,
or for assisting a competitor without permission, or for interfering with the Company&#146;s relationship with a customer, or for any similar action or willful breach of duty to the Company (hereinafter collectively referred to as
&#147;disloyalty&#148;). </FONT></TD></TR></TABLE>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5. <U>Who May Exercise</U>. Except in the case of death or disability of the Option Holder, this option
may be exercised only by the Option Holder. If the Option Holder dies or becomes disabled [within the meaning of Section 22(e)(3) of the Internal Revenue Code] prior to the termination date specified in Section 4 hereof without having exercised the
option as to all of the shares covered hereby, the option may be exercised to the extent the Option Holder could have exercised the option on the date of his death or disability at any time prior to the earlier of the dates specified in 4(a) and (b)
hereof by (i) the Option Holder&#146;s estate or a person who acquired the right to exercise the option by bequest or inheritance or by reason of the death of the Option Holder in the event of the Option Holder&#146;s death, or (ii) the Option
Holder or his personal representative in the event of the Option Holder&#146;s disability, subject to the other terms of this Agreement, the Plan and applicable laws, rules and regulations. For purposes of this Agreement, the Company shall determine
the date of disability of the Option Holder. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">6.
<U>Restrictions on Exercise</U>. This option: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">may be exercised only with respect to full shares and no fractional share of stock shall be issued; </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">may not be exercised in whole or in part and no cash or certificates representing shares subject to such option shall be delivered, if any requisite approval or consent of any
government authority of any kind having jurisdiction over the exercise of options shall not have been secured; and </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">may be exercised at all times prior to 5 p.m. on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>; provided, if the Option Holder&#146;s service on
the Board is terminated by (i) disloyalty, the option will terminate as provided in Section 4(c), (ii) disability, the option may be exercised in accordance with Section 5, or (iii) death, or if the Option Holder dies within said three-month period,
the option may be exercised in accordance with Section 5. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">7. <U>Manner of Exercise</U>. Subject to such administrative regulations as the Board, or any committee appointed by the Board from time to time, may from time to time adopt, the Option Holder or beneficiary shall, in order to exercise this
option: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">give written notice to the Company of the exercise price and the number of shares which he will purchase and deliver a check, with such notice, to make full payment of the
applicable option exercise price; or </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">give written notice to the Company of the exercise price and the number of shares for which he is requesting approval from the Committee to tender other shares of Common Stock in
exchange for option shares, and furnish an undertaking to make full payment of the applicable option exercise price in cash, before the issuance of such shares, if the Committee does not approve the tender of other shares of Common Stock in exchange
for option shares. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-2- </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Any notice shall include an undertaking to furnish or execute such documents as the Company in its
discretion shall deem necessary (i) to evidence such exercise, in whole or in part, of the option evidenced by this Agreement, (ii) to determine whether registration is then required under the Securities Act of 1933, or any other law, as then in
effect, and (iii) to comply with or satisfy the requirements of the Securities Act of 1933, or any other law, as then in effect. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">8. <U>Non-Assignability</U>. This option is not assignable or transferable by the Option Holder except by will or by the laws of descent and distribution.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">9. <U>Rights of Shareholder</U>. The Option Holder will have
no rights as a shareholder with respect to any shares covered by this option until the issuance of a certificate or certificates to the Option Holder for the shares. Except as otherwise provided in Section 10 hereof, no adjustment shall be made for
dividends or other rights for which the record date is prior to the issuance of such certificate or certificates. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">10. <U>Capital Adjustments; Antidilution</U>. The number of shares of Common Stock covered by this option, and the option price thereof, shall be subject
to such adjustment as the Board of Directors of the Company deems appropriate to reflect any stock dividend, stock split, share combination, exchange of shares, recapitalization, merger, consolidation, separation, reorganization, liquidation or the
like, of or by the Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In the event the Company shall be
a party to any merger, consolidation or corporate reorganization, as the result of which the Company shall be the surviving corporation, the rights and duties of the Option Holder and the Company shall not be affected in any manner. In the event the
Company shall sell all or substantially all of its assets or shall be a party to any merger, consolidation or corporate reorganization, as the result of which the Company shall not be the surviving corporation, or in the event any other person or
entity acquires 100% of the outstanding Common Stock of the Company (the transaction being collectively referred to as the &#147;transaction&#148;), then the Company shall notify the Option Holder that his option evidenced by this Agreement is
accelerated effective as of the effective date of the transaction whether or not such option shall then be exercisable under the terms of this Agreement. The Option Holder may exercise any portion of the option as he may desire and deposit with the
Company the requisite cash to purchase in full and not in installments the Common Stock thereby exercised, in which case the Company shall, prior to the effective date of the transaction, issue all Common Stock thus exercised, which shall be treated
as issued stock for purposes of the transaction. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">-3- </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">11. <U>Law Governing</U>. This Agreement is intended to be performed in the State of Texas and shall be
construed and enforced in accordance with and governed by the laws of such State. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">12. <U>Date of Grant</U>. The date of grant of this option <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">13. <U>Shareholder Approval</U>. This option is subject to the approval of the Plan, prior to February 2, 1997 by the
shareholders of the Company. Subject to such approval, this option is effective on the date of grant specified in Section 12. If the Plan is not so approved, this option will be of no effect. No portion of this option may be exercised prior to such
approval. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer and the Option Holder, to evidence his consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 12 hereof. </FONT></P> <P
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<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">SOUTHWEST SECURITIES GROUP, INC.</FONT></TD></TR>
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<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">President &amp; CEO</FONT></TD></TR>
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<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">Option Holder</FONT></TD></TR>
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