EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into by and between
HemaCare Corporation (the "Company"), located at 0000 Xxx Xxxx Xxxxxxxxx,
Xxxxxxx Xxxx, XX 00000, and Xxxxxxx X. Xxxxxx (the "Employee") as of May 27,
1998.
I. Employment
The Company employs the Employee and the Employee accepts employment
(hereinafter, the "Employment") upon the terms and conditions of this
Agreement.
II. Duties
Employee shall perform the duties of Chief Executive Officer and such
other duties of a responsible nature consistent with his position as may be
prescribed from time to time by the Board of Directors. Employee is to
devote all of his working time and efforts to the business and affairs of the
Company. During the Employment, Executive shall report to the Board of
Directors of the Company.
III. Term
The term of this Agreement shall begin on June 1, 1998 (the "Effective
Date") and, subject to termination as provided herein, shall expire on May 31,
2000 (the "Initial Termination Date"). The period commencing on June 1, 1998
and expiring on the Initial Termination Date shall be referred to hereinafter
as the "Initial Term" and, together with any extension thereof, the "Term".
Notwithstanding the foregoing, this Agreement and the employment of the
Employee shall be automatically extended after the Initial Term for an
indefinite period. This Agreement may be terminated by either party, without
cause, upon prior written notice to the other party. The effective date of
such termination is referred to hereinafter as the "Termination Date."
IV. Compensation
A. Base Salary
The Company shall pay the Employee for all services rendered a salary of
$200,000 per year which may be adjusted by the Board of Directors of the
Company as
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recommended by the Board Compensation Committee, payable in semi-monthly
installments or in such other manner as the Company shall pay its executives.
B. Incentive Compensation
Annually the Company shall pay to the Employee an Incentive Bonus up to
a maximum amount of 40% of Employee's Base Salary pursuant to the Incentive
Bonus Plan Description as set forth in Exhibit "A" hereto. For the period
beginning on the Effective Date through December 31, 1998, the Incentive Bonus
shall be pro-rated in the manner described on Exhibit "A" hereto.
C. Stock Options
Upon commencement of the Employment, the Board of Directors will grant
the Employee the option to purchase 200,000 shares of HemaCare Corporation
common capital stock under the terms and conditions of the HemaCare Corporation
Incentive Stock Option Plan of 1996 and the Stock Option Grant Schedule as set
forth in Exhibit "B" herein and pursuant to the form of Non-Qualified Stock
Option Agreement attached hereto as Exhibit "C." Stock options, in addition
to those granted in Exhibit "B" herein, may be granted at the discretion of
the Board of Directors.
D. Fringe Benefits
Employee shall be eligible for all fringe benefits as stated in the
HemaCare Corporation Personnel Manual, plus the following additions/modifica-
tions and those which are from time to time provided to other employees of
the Company holding senior executive positions.
1. Vacation: 4 Weeks
2. Health/Dental Insurance commencing on the first day of the month
following the date of employment.
3. Long term disability insurance equal to 60% of Base Salary,
pursuant to the terms of an insurance policy purchased by the Company, benefits
under such policy will be payable to the Employee notwithstanding the Company's
ability to terminate this Agreement for cause as stated in Section VIII, B.
4. Term Life Insurance: Benefits equal to two times the Employee's
annual Base Salary.
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5. Participation in the Company's employee retirement programs in-
cluding the Company's (401K) Plan.
6. Car allowance of $600.00 per month.
V. Extent of Services
During the Term, Employee shall not, without the prior written consent
of the Company, be engaged in any other business activity whether or not such
business activity is pursued for gain, profit or other pecuniary advantage.
This shall not be construed as preventing Employee from investing his assets
in such form or manner as will not require the performance of services of
Employee in the operation of the affairs of the enterprises or companies in
which said investments are made.
VI. Non-Disclosure; Nonsolicitation; Nondisparagement
A. Employee shall not during the Term or at any time thereafter (i)
disclose to any person not employed by the Company or any person, firm or
corporation engaged to render services to Company except during the Term for
the benefit of Company, or (ii) use for the benefit of himself, or others,
any Confidential Information (as defined below) obtained by Employee prior to
the Effective Date, during the Term or any time thereafter, including, without
limitation, "know-how", trade secrets, details of the Company's contracts with
third parties, pricing policies, financial data, operational methods,
marketing and sales information or strategies, product development techniques
or plans or any strategies relating thereto, technical processes, designs and
design projects, and other proprietary information of Company ("Confidential
Information"); provided, however, that this provision shall not preclude
Employee from (x) upon advice of counsel and after reasonable notice to
Company, making any disclosure required by any applicable law or (y) using or
disclosing information known generally to the public (other than information
known generally to the public as a result of any violation of this paragraph
VI by or on behalf of Employee).
B. As requested by the Company from time to time and upon the
termination of the Employment for any reason, Employee will promptly deliver
to the Company all copies and embodiments, in whatever form, of all
Confidential Information in Employee's possession or within Employee's
control (including, but not limited to, written records, notes, photographs,
manuals, notebooks, documentation, program listings, flow charts, magnetic
media, disks, diskettes, tapes and all other materials containing any such
Confidential Information) regardless of the location or form of such material
and, if requested by the Company, will provide the Company with written
confirmation that all such materials have been delivered to the Company.
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C. The Employee shall not, either directly or indirectly, call on,
solicit or take away or assist to be called on, solicited or taken away, any
of the customers, other employees or independent contractors of the Company
on whom the Employee called or with whom the Employee became acquainted during
the Employee's employment with or hiring by the Company, either for the
Employee's own benefit, or for the benefit of any other person, firm or
corporation. The Employee shall not disclose the name of any employee,
customer, sales representative or other employee of the Company to any third
party, unless the disclosure occurs during the Employee's employment with
the Company and is reasonably required by the Employee's position with the
Company. The Employee shall not now or in the future disrupt, damage, impair
or interfere with the business of the Company in any manner, including,
without limitation, inducing an employee to leave the employ of the Company
or inducing an employee, a consultant, a sales representative or an
independent contractor to sever that person's relationship with the Company
either by interfering with or raiding the Company's employees or sales
representatives, disrupting its relationships with customers, agents,
independent contractors, representatives or vendors, or otherwise.
In the event of a breach or threatened breach by Employee of the
provisions of this paragraph, the Company will be entitled to injunctive or
other equitable relief restraining Employee from any breach or threatened
breach of this paragraph VI. Nothing herein shall be construed as prohibiting
the Company from pursuing any other remedies available to the Company for
such breach or threatened breach, including the recovery of damages from
Employee.
VII. Expenses
The Employee may incur reasonable expenses, in accordance with Company
policies for such expenses, for promoting the Company's business, including
expenses for entertainment, travel and similar items. The Company will
reimburse the Employee for all such expenses upon the Employee's presentation
of an itemized account of such expenditures and supporting documentation, in
accordance with Company policy.
VIII.Termination by the Company for Cause
This Agreement may be terminated by the Company under any of the
following circumstances:
A. Upon the death of Employee; or
B. Upon the inability of Employee to perform all of his duties hereunder
by reason of illness, physical, mental or emotional disability or other
incapacity, which
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inability shall continue for more than three (3) successive months or six (6)
months in the aggregate during any period of twelve (12) consecutive months,
or
C. For cause, defined as:
(i) the willful failure of Employee (other than for the reasons
described in subparagraph VIII(B) above) to substantially perform his duties
hereunder. No act, or failure to act, on Employee's part shall be considered
"willful" unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the best interest
of the Company;
(ii) conviction of a crime involving a felony, fraud embezzlement
or the like,
(iii) the engaging by Employee in conduct, or the taking by Employee
of any action, which is materially injurious to the Company,
(iv) habitual insobriety or habitual abuse of a controlled substance,
(v) misappropriation of the Company's funds, or
(vi) the failure of Employee to comply with the provisions of
Paragraphs V or VI above.
Termination pursuant to this subsection may only occur after written
notice from the Company to the Employee specifying the grounds for termination
and the Employee fails within ten (10) days after receipt of such notice to
cure such failure.
IX. Termination by Employee for Cause
This Agreement may be terminated by Employee under any of the following
circumstances:
A. The failure of the Company to observe or comply with any of the
material terms or provisions of this Employment Agreement after written
notice from Employee to Company specify to grounds for termination and the
Company fails within ten (10) days after receipt of such notice to cure such
failure;
B. Any material reduction in Employee?s Base Salary Amount, or a material
reduction in Employee?s fringe benefits or any other material failure by the
Company to comply with Sections II and IV hereof;
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C. The Company sells substantially all of its assets to a single
purchaser or to a group of associated purchasers;
D. At least two-thirds of the outstanding corporate shares of the
Company are sold, exchanged, or otherwise disposed of, in one transaction or
a series of related transactions;
E. The Company dissolves or liquidates its business.
Termination pursuant to this subsection may only occur after written
notice from the Employee to the Company specifying the grounds for termination
and the Company fails within ten (10) days after receipt of such notice to
cure such failure.
X. Xxxxxxxxx
In the event this Agreement is terminated by the Company, without cause,
or in the event this Agreement is terminated by the Employee for any of those
causes listed in paragraph IX, (i) in the event such termination occurs prior
to the Initial Termination Date, the Company shall continue to pay the
Employee his then current Base Salary and provide the benefits set forth in
paragraph IV(D)(2), (3) and (4) above during the period expiring on the
Initial Termination Date, and (ii) in the event such termination occurs after
the Initial Termination Date, the Company shall continue to pay the Employee
his then current Base Salary until such time that the Employee commences new
full time employment acceptable to the Employee. However, in the case of
clause (ii) of the immediately preceding sentence, such payments shall not
continue for a period greater than 12 months from the date of termination.
In the event of any termination prior to year-end, the Employee shall not be
entitled to (i) payment of Incentive Bonus payable for such year, or (ii)
stock options which have not vested as of the Termination Date.
XI. Waiver of Breach
The waiver by either party of a breach of any provision of this Agreement
by the other shall not operate or be construed as a waiver of any subsequent
breach.
XII. Arbitration
Any dispute arising out of or relating to this Agreement or the transact-
ions contemplated hereby shall be finally resolved and determined by mandatory,
binding arbitration before a single arbitrator in Los Angeles, California, in
accordance with the then-prevailing commercial arbitration rules of the
American Arbitration Association; PROVIDED, HOWEVER, that no claim for
specific performance or injunctive relief shall be required to be submitted
to arbitration; PROVIDED, FURTHER, that the arbitrator shall apply the
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internal laws of the State of California. Each of the parties hereto submits
to the jurisdiction of the arbitrator appointed in accordance with such rules
and (without limiting the effect of the foregoing arbitration clause) to the
jurisdiction of any state or federal court sitting in Los Angeles County,
California, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court. Each of the parties hereto
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that
might be required of any other party with respect thereto. Nothing in this
paragraph XII, however, shall affect the right of any party to bring any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby in any other court or to serve legal
process in any other manner permitted by law or at equity, for the purposes
of compelling arbitration, enforcing any award in arbitration, or seeking
specific performance or injunctive relief. Any party hereto may make service
on any other party by sending or delivering a copy of the process to the
party to be served at the address and in the manner provided for the giving
of notices in paragraph XVI hereof. Each party hereto agrees that a final
award in any such arbitration or final judgment in any such action or
proceeding so brought shall be conclusive and may be enforced by entry of
such award in any court of competent jurisdiction, suit on the award or
judgment, or in any other manner provided by law or at equity. In the event
of legal action or arbitration to construe or enforce this Agreement, the
prevailing party (as determined by the court or arbitrator, as applicable)
shall be entitled to recover its reasonable attorneys' fees and costs.
XIII. Assignment
The rights and obligations of the Company under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns
of the Company, but the rights and obligations of Employee are personal and
may not be assigned or delegated without the Company's prior written consent.
XIV. Entire Agreement
This Agreement and the Exhibits attached herein, contains the entire
Agreement of the parties and may not be changed orally, but only by an
agreement in writing executed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.
XV. Law Applicable
This Agreement shall be governed in all respects, whether as to validity,
construction, capacity, performance or otherwise, by the laws of the State of
California. In the event any provision of this Agreement shall be held
invalid by a court with
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jurisdiction over the parties to this Agreement, such
provision shall be deleted from the Agreement, which shall then be construed
to give effect to the remaining provisions thereof.
XVI. Notices
Any notice to the Company required or permitted under this Agreement
shall be given in writing to Company, either by personal service or by
registered or certified mail, postage prepaid, addressed to the Chairman of
the Company at its then principal place of business. Any such notice to
Employee shall be given in a like manner and, if mailed, shall be addressed
to Employee at his home address then shown in the Company's files. For the
purpose of determining compliance with any time limit in this Agreement, a
notice shall be deemed to have been duly given (a) on the date of service,
if served personally on the party to whom notice is to be given, or (b) on
the second business day after mailing, if mailed to the party to whom the
notice is to be given in the manner provided in this paragraph.
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IN WITNESS WHEREOF, the parties intending to be legally bound, have
executed this Agreement the day and year first above stated.
HEMACARE CORPORATION EMPLOYEE
/s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- --------------------------
Xxxx X. Xxxxxxxxxx, Chairman of
the Board of Directors
5/27/98 5/27/98
-------------------------------- ---------------------------
Date Date
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Exhibit "A"
Percentage of
Maximum % of Base Budgeted Pretax Other Personal and
Compensation Payable Income Achieved Non-Financial Corporate
as Bonus to Employee in Period* Objectives Achieved**
--------------------- ----------------- ------- -----------------------
0% < 100% And Did not meet Objectives
10% < 100% And Met Objectives
15% 100%+ And Did Not meet Objectives
25% 100%+ And Met or Exceeded Objectives
40% 125%+ And Exceeded Objectives
* The annual budget will be prepared under the CEO's direction and approved
by the Board of Directors prior to the commencement of each fiscal year;
provided that as soon as practicable following the Effective Date, the CEO
shall prepare a budget (subject to Board of Directors approval) for the
period commencing on the Effective Date through and including December 31,
1998 (the "Initial Period"). Any Incentive Bonus for the Initial Period
which shall be earned on the basis set forth in the table above shall be
pro-rated by multiplying the amount of the Incentive Bonus as so determined
by a fraction, the numerator of which is the number of days in the Initial
Period and the denominator of which is 365.
** Personal and Corporate Non-Financial objectives will be mutually agreed
by the Employee and the Board of Directors in writing.
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Exhibit "B"
Price and Vesting Dates for Initial Option Grant
Vesting Date Option Option
for Stock Exercise Number of Expiration
Options Price Shares Date
-------------- ---------- --------- -----------
5/31/1999 $0.625 40,000 5/31/2008
5/31/2000 $0.625 40,000 5/31/2008
5/31/2001 $0.625 40,000 5/31/2008
5/31/2002 $0.625 40,000 5/31/2008
5/31/2003 $0.625 40,000 5/31/2008
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EXHIBIT C
HEMACARE CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
[1996 STOCK INCENTIVE PLAN]
(Non-Qualified Stock Option Agreement Form 96-2)
------------------------------ Date Option Granted:___________
Name of Optionee
------------------------------ No. of Shares: -----------
Residence Address
------------------------------ Option Number: ------------
City, State, Zip
THIS AGREEMENT is made as of the date set forth above, between
HEMACARE CORPORATION, a California corporation (hereinafter called
the "Company"), and the optionee named above (hereinafter called
the "Optionee").
RECITAL
The Board of Directors of the Company (the "Board"), or the
Compensation Committee of the Board or such other committee of
directors as the Board of Directors of the Company shall designate
in accordance with the HemaCare Corporation 1996 Stock Incentive
Plan (the "Plan"), has determined that it is to the advantage and
interest of the Company and its shareholders to grant the option
provided for herein to the Optionee as an inducement to remain in
the service of the Company (or any corporation, partnership, joint
venture or other entity in which the Company owns, directly or
indirectly, at least a 20% beneficial ownership interest (a
"Related Company")) and as an incentive for increased effort during
such service. Such committee as shall be designated to administer
the Plan (or, if none, the Board) is referred to herein as the
Committee. In consideration of the mutual covenants herein
contained, the parties agree as follows:
1. Grant of Option. The Company hereby grants to the
Optionee the right and option (the "Option") to purchase on the
terms and conditions set forth herein and in the Plan all or any
part of an aggregate of _____ shares (the "Shares") of the Common
Stock of the Company (whether authorized and unissued or treasury
shares) at the purchase price of $_____ per Share [the price to
be not less than 100% of Fair Market Value Per Share] as the
Optionee may, from time to time, elect. The Option shall vest and
become exercisable on a cumulative basis as follows:
(i) On or after ________________, __________ shares;
(ii) On or after ________________, __________ shares;
(iii) On or after ________________, __________ shares;
(iv) On or after ________________, __________ shares; and
(v) On or after ________________, __________ shares.
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[The vesting period of stock options awarded to participants
other than directors, officers, consultants or independent
contracts shall be at a rate of at least 20% per year over five
years from the date of grant.]
Nothing contained herein shall be construed to limit or
restrict the right of the Company or any Related Company to
terminate the Optionee's employment or other Relationship at any
time, with or without cause, or to increase or decrease the
Optionee's compensation from the rate in existence at the time the
Option is granted. As used herein, the term "Relationship" shall
mean that the Optionee is or has agreed to become an officer,
director, employee, consultant, adviser, independent contractor or
agent of the Company or any Related Company.
The Option is not intended to meet the requirements of an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
2. Term of Option. The right to exercise the Option granted
hereunder, to the extent unexercised, shall remain in effect until
[specify the period, not to exceed 120 months after the date of
grant] unless sooner terminated in accordance with Section 5 hereof
(the "Term").
3. Method of Exercise.
(a) To the extent that the Option has become exercisable
hereunder, the Option may be exercised in whole or in part at any
time during the Term by giving written notice of exercise to the
Company specifying the number of Shares to be purchased,
accompanied by payment of the purchase price therefor. Payment of
the purchase price for such Shares shall be made (i) in cash,
(ii) by certified or cashier's check payable to the order of the
Company, (iii) other cash equivalents acceptable to the Committee
in its sole discretion, (iv) by delivery of shares of the Common
Stock of the Company already owned by the Optionee or subject to
vested stock options under the Plan, subject to such delivery being
permissible under the General Corporation Law of the State of
California, including without limitation Chapter 5 thereof, or
(v) any combination of the foregoing. If requested by the
Committee, prior to the delivery of any Shares, the Optionee, or
any other person entitled to exercise the Option, shall supply the
Committee with a representation that the Shares are not being
acquired with a view to distribution and will be sold or otherwise
disposed of only in accordance with applicable federal and state
statutes, rules and regulations. As soon after the notice of
exercise as the Company is reasonably able to comply, the Company
shall, without transfer or issue tax to the Optionee or other
person entitled to exercise the Option, deliver to the Optionee or
such other person, at the principal office of the Company or such
other place as shall be mutually acceptable, a certificate or
certificates for the Shares being purchased.
(b) If payment is made with shares of Common Stock of
the Company already owned by the Optionee, the Optionee, or other
person entitled to exercise the Option, shall deliver to the
Company with the notice of exercise certificates representing the
number of shares of Common Stock in payment for the Shares, duly
endorsed for transfer to the Company. In addition, prior to the
acceptance of such certificates in payment for the Shares, the
Optionee, or any other person entitled to exercise the Option,
shall supply the Company with a written representation and warranty
that he or she has good and marketable title to the shares
represented by the certificate(s), free and clear of liens and
encumbrances. The value of the shares
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of Common Stock so tendered
in payment for the Shares being purchased shall be their Fair
Market Value Per Share (as defined below) on the date of the
Optionee's notice of exercise. Any Shares purchased upon exercise
of the Option which are paid for using Restricted Stock (as defined
in the Plan) shall be restricted in accordance with the original
terms of the award of such Restricted Stock.
(c) If payment is to be made in shares of Common Stock
subject to vested stock options under the Plan, the per share value
attributable to the shares underlying the stock option(s) to be
surrendered or canceled shall be the Fair Market Value Per Share of
such shares less the exercise price per share of such option(s).
The Company and the Optionee or other person entitled to exercise
the Option shall execute and deliver such instruments or
modifications of stock options as shall be necessary to give effect
to such an exercise of the Option.
(d) If for any reason a purported exercise of the Option
providing for payment to be made in whole or in part through the
delivery of shares of Common Stock already owned or underlying
vested stock options is not permitted, such purported exercise
shall not be effective unless, following notice thereof from the
Company, the Optionee or other person entitled to exercise the
Option promptly pays the exercise price in an acceptable form.
(e) If the Optionee or other person entitled to exercise
the Option desires to exercise the Option with funds borrowed from
a broker-dealer in a margin transaction under Regulation T of the
Board of Governors of the Federal Reserve System, the Optionee's
notice of exercise may be delivered to the Company by such broker-
dealer and the Company may deliver the certificate(s) for the
Shares being purchased to such broker-dealer on behalf of the
Optionee or other person entitled to exercise the Option.
(f) For purposes hereof, the "Fair Market Value Per
Share" of the Company's Common Stock shall mean, if the Common
Stock is publicly traded, the closing per share bona fide bid price
of the Common Stock on such date. In any situation not covered by
the preceding sentence, the Fair Market Value Per Share shall be
determined by the Committee in accordance with one of the valuation
methods described in Section 20.2031-2 of the Federal Estate Tax
Regulations (or any successor provision thereto), which
determination shall be final, binding and conclusive.
(g) Notwithstanding the foregoing, the Company shall
have the right to postpone the time of exercise of the Option or
the delivery of the Shares for such period as may be required for
the Company (i) to comply with any applicable listing, registration
or qualification requirements of any national securities exchange
or over-the-counter market or under any federal or state law or
(ii) to obtain the consent or approval of any government regulatory
body. In addition, in connection with any exercise of the Option,
the Committee may require the Optionee to agree not to dispose of
any of the Shares acquired upon exercise thereof except upon the
satisfaction of specified conditions which the Committee, in its
sole discretion, then deems necessary or desirable in connection
with any then existing and effective requirement or interpretation
of any applicable federal or state securities law, rule or
regulation.
(h) The Option may be exercised for less than the total
number of Shares for which the Option is then exercisable, provided
that a partial exercise may not be for less than 100
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Shares, except
in the final year of the Term, and shall not, in any event, include
any fractional Shares.
4. Tax Withholding. The Optionee shall, no later than the
date as of which any value attributed to the Option first becomes
includible in the Optionee's gross income for applicable tax
purposes, pay to the Company, or make arrangements (which may
include delivery of shares of Common Stock already owned by the
Optionee or subject to awards under the Plan subject to and in
accordance with the provisions of Section 3(b) or Section 3(c), as
applicable) regarding payment of, any federal, state, local or
other taxes of any kind required by law to be withheld with respect
thereto. The obligations of the Company hereunder shall be
conditional on such payment or arrangements, and the Company (and,
where applicable, any Related Company), shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Optionee.
5. Termination of Option.
(a) If the Optionee ceases to have a Relationship for
any reason other than his death or Permanent Disability (as defined
in Section 5(d)), the Option shall terminate 90 days from the date
on which such Relationship terminates. During such 90-day period,
the Optionee may exercise the Option but only to the extent the
Option was exercisable on the date of termination of his
Relationship and provided that the Option has not expired in
accordance with Section 2 or otherwise terminated as provided
herein. Notwithstanding the foregoing, if the Relationship is
terminated for cause (as defined in Section 5(d)), the Option shall
terminate upon the termination of the Relationship.
(b) For purposes hereof, termination of Optionee's
Relationship for reasons other than for cause, death or Permanent
Disability shall be deemed to take place upon the earliest to occur
of the following: (i) the date of the Optionee's retirement from
employment under the normal retirement policies of the Company or
any subsidiary of the Company; (ii) the date of the Optionee's
retirement from employment with the approval of the Committee
because of disability other than Permanent Disability; (iii) the
date the Optionee receives notice or advice that his employment or
other Relationship is terminated; (iv) the date the Optionee ceases
to render the services for which the Optionee was employed, engaged
or retained by the Company or any Related Company (absences for
temporary illness, emergencies and vacations or leaves of absence
approved in writing by the Committee excepted); or (v) in the case
of a director of the Company, the date on which such person ceases
to be a director of the Company unless such person has an other
Relationship at such time. The fact that the Optionee may receive
payment from the Company or any Related Company after termination
for vacation pay, for services rendered prior to termination, for
salary in lieu of notice or for other benefits shall not affect the
termination date.
(c) If the Optionee shall die at a time when the
Optionee is in a Relationship or if the Optionee shall cease to
have a Relationship by reason of Permanent Disability, the Option
shall terminate six months from the date of the Optionee's death or
termination of Relationship due to Permanent Disability unless by
its terms it shall expire before such date or otherwise terminate
as provided herein, and shall only be exercisable to the extent
that it would have been exercisable on the date of the Optionee's
death or the Optionee's termination of Relationship due to
Permanent Disability. In the case of death, the Option may be
exercised by the person or persons to whom the
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Optionee's rights
under the Option shall pass by will or by the laws of descent and
distribution.
(d) As used herein, the term "Permanent Disability"
shall mean termination of a Relationship with the Company or any
Related Company with the consent of the Company or such Related
Company by reason of permanent and total disability within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended. As used herein, the term "for cause" shall mean that
the Relationship is terminated by the Company due to (i) the
commission by the Optionee of a substantial violation, through
intentional conduct or through a pattern of behavior not corrected
within a reasonable period of time after written notice to the
Optionee by the Company of such behavior (in either case, whether
by action or omission), of the Optionee's duties on behalf of the
Company or a Related Company or the workplace policies or rules of
the Company or a Related Company which conduct or behavior actually
results in substantial harm to the Company or a Related Company or
could reasonably be expected to put personnel of the Company or a
Related Company in serious jeopardy of imminent harm to their
safety, health or well-being or to cause substantial harm to the
business of the Company or a Related Company or (ii) the commission
by the Optionee of any act or acts constituting dishonesty, a
felony or fraud. For purposes of the Option, whether a
Relationship is or has been terminated "for cause" shall be finally
determined by the president of the Company, or if the Optionee is
a person subject to Section 16 of the Securities Exchange Act of
1934, as amended, by the Committee.
6. Adjustments. In the event of any merger, reorganization,
consolidation, sale of substantially all assets, recapitalization,
stock dividend, stock split, spin-off, split-up, split-off,
distribution of assets or other change in corporate structure
affecting the Common Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee in its sole
discretion, shall be made in the aggregate number of Shares then
subject to this Agreement and the purchase price to be paid by the
Optionee hereunder; provided, however, that no such adjustment
shall increase the aggregate value of the Option.
7. Change of Control. This Agreement and the Option
hereunder are subject to the change of control provisions set forth
in the Plan.
8. Provisions Regarding Transferability. The Optionee may
transfer the Option solely for estate planning purposes to the
Optionee's children, grandchildren or spouse ("Immediate Family"),
to one or more trusts for the benefit of the Optionee's Immediate
Family members, or to one or more partnerships in which such
Immediate Family members are the only partners only upon the
express written consent of the Committee, and provided the Optionee
does not receive any consideration in any form whatsoever for such
transfer. Upon any such transfer of the Option, the Option shall
continue to be subject to the terms and conditions as were
applicable to the Option immediately prior to the transfer thereof.
Except as expressly provided in the first sentence of this
Section 8, the Option is not assignable or transferable by the
Optionee, either voluntarily or by operation of law, otherwise than
by will or by the laws of descent and distribution, and is
exercisable, during the Optionee's lifetime, only by the Optionee.
9. No Shareholder Rights. The Optionee or other person
entitled to exercise the Option shall have no rights to dividends
or other rights of a shareholder with respect to any Shares subject
hereto until the Optionee or such person has given written notice
of exercise of the Option with respect to such Shares and has paid
the purchase price for such Shares, and no adjustment (except such
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adjustments as may be effected pursuant to the provisions of
Section 6 hereof) shall be made for dividends or distributions of
rights in respect of such Shares if the record date is prior to the
date by which the Optionee or such person has both given such
written notice and paid such purchase price.
10. Investment Representation. The Optionee hereby
represents that the Option and any Shares purchased hereunder are
being acquired for the Optionee's own account and not with a view
to or for sale in connection with any distribution thereof except
as may be permitted by the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
11. Conditions to Issuance of Shares. THE COMPANY'S
OBLIGATION TO ISSUE OR DELIVER SHARES OF ITS COMMON STOCK UPON
EXERCISE OF THE OPTION IS EXPRESSLY CONDITIONED UPON THE COMPLETION
BY THE COMPANY OF ANY REGISTRATION OR OTHER QUALIFICATION OF SUCH
SHARES UNDER ANY STATE AND/OR FEDERAL LAW OR RULINGS OR REGULATIONS
OF ANY GOVERNMENT REGULATORY BODY OR THE MAKING OF SUCH INVESTMENT
REPRESENTATIONS OR OTHER REPRESENTATIONS AND AGREEMENTS BY THE
OPTIONEE (OR ANY PERSON ENTITLED TO EXERCISE THE OPTION) IN ORDER
TO COMPLY WITH THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH
REGISTRATION OR OTHER QUALIFICATION OF SUCH SHARES WHICH THE
COMMITTEE SHALL, IN ITS SOLE DISCRETION, DEEM NECESSARY OR
ADVISABLE. SUCH REQUIRED REPRESENTATIONS AND AGREEMENTS MAY
INCLUDE REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE, OR ANY
OTHER PERSON ENTITLED TO EXERCISE THE OPTION, (A) IS NOT PURCHASING
SUCH SHARES FOR DISTRIBUTION AND (B) AGREES TO HAVE PLACED UPON THE
FACE AND/OR REVERSE OF ANY CERTIFICATES FOR SUCH SHARES A LEGEND
SETTING FORTH ANY REPRESENTATIONS AND AGREEMENTS WHICH HAVE BEEN
GIVEN TO THE COMMITTEE OR A REFERENCE THERETO AND STATING THAT,
PRIOR TO MAKING ANY SALE OR OTHER DISPOSITION OF ANY SUCH SHARES,
THE OPTIONEE, OR ANY OTHER PERSON ENTITLED TO EXERCISE THE OPTION,
WILL GIVE THE COMPANY NOTICE OF INTENTION TO SELL OR DISPOSE OF THE
SHARES NOT LESS THAN FIVE DAYS PRIOR TO SUCH SALE OR DISPOSITION.
12. Method of Acceptance. This Agreement is addressed to the
Optionee in duplicate and shall not be effective until the Optionee
executes the acceptance below and returns one copy to the Company,
thereby acknowledging that he has read and agreed to all the terms
and conditions of this Agreement and the Plan.
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13. Plan Terms. The Option shall be subject to and governed
by the terms and provisions of the Plan, which by this reference
are incorporated herein. In the event of any conflict between the
provisions of this Agreement and the Plan, the Plan shall govern.
All determinations and interpretations thereof made by the
Committee shall be conclusive and binding on all parties hereto and
upon their successors and assigns.
Executed as of the ______ day of ______, 1998.
HEMACARE CORPORATION
By: _____________________________
ACCEPTED:
________________________ _______________
Signature of Optionee Date
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