EXHIBIT 10.1
INCENTIVE STOCK OPTION AGREEMENT dated as of September 14, 2004 between New York
Health Care, Inc., a New York corporation (the "Company"), and Xxxxxx X.
X'Xxxxxxx ("Optionee").
RECITAL
The Company desires to grant to Optionee an Incentive Stock Option (the
"Option") to purchase 100,000 shares ("Option Shares") of the Company's common
stock, par value $.01 per share (the "Stock"), under and for the purposes of the
Company's Performance Incentive Plan (the "Plan"). Accordingly, in consideration
of the mutual covenants hereinafter set forth and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. This Agreement is subject to the provisions of the Plan, the receipt of
a copy of which is hereby acknowledged by Optionee. The Plan may hereafter be
amended as provided therein and this Agreement will also be subject to any such
amendment. The Plan, as from time to time amended, is incorporated herein and
made a part of this Agreement. Capitalized terms used herein without definition
will have the meanings ascribed to those terms in the Plan.
2. In recognition for Optionee's valuable service to the Company as its
President and Chief Executive Officer, the Compensation Committee of the
Company's Board of Directors, pursuant and subject to the Plan, granted the
Option to Optionee, effective as of the date of this Agreement, to purchase
commencing six (6) months from the date hereof, all or any of the Option Shares
at an exercise price of $0.50 per share. The Option is intended to be an
Incentive Option.
3. The Option and all rights of the Optionee hereunder shall terminate on
September 14, 2014 (the "Expiration Date"). On or prior to the Expiration Date,
the Option shall be exercisable subject to the terms of the Plan and the
following terms:
(a) Optionee may exercise the Option with respect to all or any part
of the Option Shares by giving the Company written notice of such exercise, as
provided in paragraph 4 hereof. Such notice shall specify the number of shares
as to which the Option is being exercised and shall be accompanied by payment in
full in either cash or Stock, as provided in paragraph 11 of the Plan, of an
amount equal to the exercise price per Option Share multiplied by the number of
Option Shares as to which the Option is being exercised. Payment of the
exercise price of such Option Shares may also be made by the Company, at its
option, retaining from the Option Shares to be delivered upon exercise of the
Option that number of Option Shares having a fair market value on the date of
exercise equal to the exercise price of the number of Option Shares as to which
the Optionee exercises the Option or, subject to the requirements of Regulation
T (as in effect from time to time) under the Securities Exchange Act of 1934, as
amended , by giving irrevocable instructions to a stockbroker to promptly
deliver to the Company full payment for the
Option Shares with respect to which the Option is exercised from the proceeds of
the stockbroker's sale of or loan against such Option Shares.
(b) As soon as practicable after receipt of the notice of exercise
and payment of the exercise price for the number of Option Shares specified in
such notice of exercise, the Company shall deliver to the Optionee at the
principal office of the Company or at such other place as may be mutually
acceptable to the Company and the Optionee, a certificate or certificates for
such shares; provided, however, that the time of such delivery may be postponed
by the Company for such period of time as the Company may require to comply with
any law or regulation applicable to the issuance or transfer of shares. If the
Optionee fails for any reason to accept delivery of all or any of the number of
Option Shares specified in such notice of exercise upon tender of delivery
thereof, his right to purchase such undelivered Option Shares may be terminated
by the Company by notice in writing to the Optionee and refund of the any
payment of the exercise price.
(c) Prior to or concurrently with delivery by the Company to the
Optionee of a certificate(s) representing such shares, the Optionee shall (i)
upon notification of the amount due, pay promptly any amount necessary to
satisfy applicable federal, state or local tax requirements, and (ii) if such
shares are not then registered under the Securities Act of 1933, sign and
deliver to the Company an investment letter confirming that such shares are
being purchased for investment and not with a view to the distribution thereof,
and the Optionee shall give such other assurances and take such other action as
the Company shall require to secure compliance with any federal or state
securities law applicable to the issuance of the Option Shares; provided that
the out-of-pocket expense of such compliance shall be borne by the Company,
other than fees of Optionee's counsel and advisors
4. Any notice to the Company provided for in the Option shall be addressed
to the Company at its principal office, in care of its Secretary, with a copy to
Blank Rome LLP, 000 Xxxxxxxxx Xxx, Xxx Xxxx, XX 00000-0000, attention Ethan
Seer, and any notice to the Optionee shall be addressed to him at his address
now on file with the Company, or to such other address as either may last have
designated to the other by notice as provided herein. Any notice so addressed
shall be deemed to be given on the fourth business day after mailing, by
registered or certified mail, return receipt requested, at a post office or
branch post office within the United States.
5. This Option shall terminate in the event of a termination of employment
or death of the Optionee as follows:
(a) If the Optionee's employment with the Company is terminated
voluntarily by the Optionee, or for cause, then this Option shall expire
forthwith. Except as provided in Subsections (b) and (c) below, if such
employment shall terminate for any other reason, then the Option may be
exercised at any time within three months after such termination, subject to the
provisions of subparagraph (d) below.
(b) If the Optionee dies while employed by the Company or within
three months
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after the termination of his employment other than voluntarily by the Optionee
or for cause, then and in that event the Option, subject to the provisions of
subparagraph (d) below, may be exercised by the estate of the Optionee or by a
person who acquired the right to exercise this Option by bequest or inheritance
or by reason of the death of the Optionee, at any time within one year after
such death.
(c) If the Optionee ceases employment with the Company because of
permanent and total disability (within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended) while employed by the Company, then
this Option, subject to the provisions of subparagraph (d) below, may be
exercised at any time within one year after such termination of employment due
to disability.
(d) This Option may not be exercised in the event of termination of
employment of the Optionee, except to the extent that the Optionee was entitled
to exercise this Option at the time of such termination or death, and in any
event may not be exercised after the expiration of this Option.
(e) For the purposes of this paragraph, the employment relationship
of the Optionee with the Company will be treated as continuing intact while the
Optionee is on sick leave or other bona fide leave of absence, if such leave
does not exceed 90 days or, if longer, so long as the Optionee's right to
re-employment is guaranteed either by statute or by contract. A leave of
absence or an interruption in service authorized pursuant to the Plan, shall not
be deemed an interruption of employment.
6. In the event of any change in the Company's Stock subject to the Option,
by reason of any stock dividend, split-up, merger, consolidation, or exchange of
shares, spin-off, liquidation or the like, such adjustment shall be made in the
number of shares subject to the option and the price per share as the Committee
or the Board of Directors shall, in its sole judgment, deem appropriate to give
proper effect to such event.
7. The Option is not transferable and may not be exercised by any person
other than the Optionee, except to the extent specified in the Plan and the term
"Optionee" shall include any person having rights to exercise the Option under
the Plan. In the event of any attempt by the Optionee to transfer, assign,
pledge, hypothecate or otherwise dispose of the Option or of any right
hereunder, or in the event of the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Company may terminate
the Option by notice to the Optionee and it shall thereupon become null and
void.
8. In the event that any question or controversy shall arise with respect
to the nature, scope or extent of any one or more rights conferred by the
Option, or any provision of this Agreement, including whether and when a change
of control has occurred or is about to occur, the determination in good faith by
the Board of Directors of the Company (as constituted at the time of such
determination) of the rights of the Optionee shall be conclusive, final and
binding upon the Optionee and upon any other person who shall assert any right
pursuant to this Option.
9. The Optionee shall have no rights of a stockholder with respect to the
shares covered
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by the Option until he or she becomes the holder of record of such shares. All
shares issued upon exercise of the Option shall be fully paid and
non-assessable.
10. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
11. This Agreement shall at all times be subject to the terms and
conditions of the Plan. In the event of any conflict between the terms and
conditions of this Agreement and the Plan, the terms and conditions of the Plan
shall govern.
12. This Agreement shall governed by and construed in accordance with the
internal substantive law of the State of New York without giving effect to the
choice of law rules
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed on the day and year first written above.
NEW YORK HEALTH CARE, INC.
By: /s/ Xxxxx Xxxxx
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Authorized Officer
OPTIONEE:
/s/ Xxxxxx X. X'Xxxxxxx
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Xxxxxx X. X'Xxxxxxx
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SUBSCRIPTION FORM
(To Be Executed Only Upon Exercise of Option)
The undersigned, holder of an option pursuant to the Incentive Stock Option
Agreement between New York Health Care, Inc. and Xxxxxx X. X'Xxxxxxx dated as of
September 14, 2004 (the "Agreement") hereby irrevocably exercises his option
thereunder to purchase the number of shares of common stock of New York Health
Care, Inc. specified below and herewith makes payment therefore, all at the
price and on the terms and conditions specified in the Agreement.
Dated: , 20
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Number of Shares:
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Exercise Price: $
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Signature of Optionee:
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Name:
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Address:
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Social Security Number:
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