Exhibit 10.6
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE
XXXXXX ACQUISITION HOLDINGS, INC. 1999 EQUITY INCENTIVE PLAN
THIS AGREEMENT, made as of __________, 2000 (the "Effective Date"),
by and between Xxxxxx Medical Group, Inc., a Delaware corporation formerly known
as Xxxxxx Acquisition Holdings, Inc. (the "Company"), and ________________ (the
"Participant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to afford the Participant the
opportunity to acquire ownership of the Company's common stock, par value $.01
per share ("Common Stock"), so that he may have a direct proprietary interest in
the Company's success.
NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties hereby agree as follows:
1. GRANT OF OPTIONS. Subject to the terms and conditions set forth herein
and in the Xxxxxx Acquisition Holdings, Inc. 1999 Equity Incentive Plan, a copy
of which is attached hereto as Exhibit A (the "Plan"), on the Effective Date the
Company does hereby grant to the Participant, during the period commencing on
the Effective Date and ending on the 10th anniversary of the Effective Date (the
"Expiration Date"), the right and option (the right to purchase any one share
under this Agreement being an "Option") to purchase from the Company
____________ shares of Common Stock. The Option to purchase such Common Stock
shall have an exercise price of [$_____] per share. Each of the Options granted
pursuant to this Agreement shall constitute Incentive/Nonqualified Stock Options
under the Plan.
2. LIMITATIONS ON EXERCISE OF OPTIONS. (a) Subject to the terms and
conditions set forth herein and in the Plan, the Options shall vest and become
exercisable, on a cumulative basis, with respect to [25%] of the shares on the
first anniversary of the Effective Date and on each succeeding anniversary
thereafter so long as the Participant is employed by the Company; provided,
however, upon the occurrence of a Change of Control, as defined below, all of
the then unvested Options shall automatically vest and be fully exercisable and
shall remain so exercisable in accordance with the terms of this Agreement. The
Committee or the Board may accelerate the vesting and exercisability of any or
all of the then-unvested Options at any time.
(b) For purposes of this Agreement, a "Change of Control" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more (on
a fully diluted basis) of either (A) the then outstanding shares of common stock
of the Company, taking into account as outstanding for this purpose such common
stock issuable upon the exercise of options or warrants, the conversion of
convertible stock or debt, and the exercise of any similar right to acquire such
common stock (the "Outstanding Company Common Stock") or (B) the combined voting
power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control: (w) any acquisition pursuant to an
initial public offering of shares of common stock of the Company pursuant to a
registration statement declared effective under the Securities Act of 1933, as
amended, (x) any acquisition by the Company or any "affiliate" of the Company,
within the meaning of 17 C.F.R. ss. 230.405 (an "Affiliate"), (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Affiliate, (z) any acquisition by any
corporation or business entity pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (ii) of this Section 2(b) (persons and
entities described in clauses (w), (x), (y) and (z) being referred to herein as
"Permitted Holders"); or
(ii) The consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
60% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
no Person (excluding any Permitted Holder) beneficially owns, directly or
indirectly, 50% or more (on a fully diluted basis) of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination, taking into account as outstanding for this purpose such
common stock issuable upon the exercise of options or warrants, the conversion
of convertible stock or debt, and the exercise of any similar right to acquire
such common stock, or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the incumbent Board at the time of the execution of
the initial agreement providing for such Business Combination; or
(iii) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(iv) The sale of at least 80% of the assets of the Company to an
unrelated party, or completion of a transaction having a similar effect; or
(v) The individuals who on the date of this Agreement constitute the
Board thereafter cease to constitute at least a majority thereof; provided that
any person becoming a member of the Board subsequent to the date of this
Agreement and whose election or nomination was approved by a vote of at least
two-thirds of the directors who then comprised the Board
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immediately prior to such vote shall be considered a member of the Board on the
date of this Agreement.
3. NON-TRANSFERABLE. Except as specifically authorized by the Committee,
the Participant may not transfer the Options except by will or the laws of
descent and distribution and the Options shall be exercisable during the
Participant's lifetime only by the Participant or, in the event of his
incapacity, his guardian or legal representative. Except as so authorized, no
purported assignment or transfer of the Options, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise
(except by will or the laws of descent and distribution), shall vest in the
assignee or transferee any interest or right herein whatsoever.
4. TERMINATION OF EMPLOYMENT. (a) DISABILITY; RETIREMENT. If, prior to the
Expiration Date, the Participant shall cease to be employed by the Company by
reason of a Disability, as defined in the Plan, or retirement from the Company
pursuant to any retirement plan of the Company, or the Participant's employment
with the Company ceases for any reason with the written consent of the
Committee, then the Options shall remain exercisable until the earlier of the
Expiration Date or the date that is [thirty (30)] days after the date of such
cessation of employment, but only to the extent the Options were vested and
exercisable at the time of such cessation of employment.
(b) WITHOUT CAUSE. If the Company terminates the Participant's
employment without Cause, then the Options shall remain exercisable until the
earlier of the Expiration Date or the date that is [ninety (90)] days after the
date of such cessation of employment.
(c) VOLUNTARY; FOR CAUSE. If the Participant voluntarily terminates
employment with the Company for reasons other than Disability or retirement
pursuant to any retirement plan of the Company and without the consent of the
Committee or the Company terminates the Participant's employment for Cause, then
all of the Options, to the extent not exercised prior to such termination,
whether exercisable or not, shall lapse and be canceled immediately upon such
cessation of employment.
(d) DEATH. If the Participant shall cease to be employed by the Company
prior to the Expiration Date by reason of death, or the Participant shall die
while entitled to exercise any of the Options pursuant to Section 4(a) or 4(b),
the executor or administrator of the estate of the Participant or the person or
persons to whom the Options shall have been validly transferred by the executor
or administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the Expiration Date or one (1) year after
the date of death, to exercise the Options, but only to the extent that the
Participant was entitled to exercise them on the date of death and subject to
any other limitation contained herein on the exercise of the Options in effect
on the date of exercise.
(e) Whether employment has been or could have been terminated for the
purposes of this Agreement, and the reasons therefor, shall be determined by the
Committee, whose determination shall be final, binding and conclusive.
(f) Options that have not yet vested at the time of termination of the
Participant's employment with the Company shall expire and no further vesting
shall occur with
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respect thereto. After the expiration of any exercise period described in this
Section 4, the Options shall terminate together with all of the Participant's
rights hereunder, to the extent not previously exercised.
5. ADJUSTMENTS AND CORPORATE REORGANIZATIONS. In accordance with and
subject to the applicable terms of the Plan, the Options shall be subject to
adjustment or substitution, as determined by the Committee, as to the number,
price or kind of Stock or other consideration subject to such Options or as
otherwise determined by the Committee to be equitable (i) in the event of
changes in the outstanding Stock or in the capital structure of the Company by
reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
hereof or (ii) in the event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, the Participant. The
Company shall give the Participant written notice of an adjustment hereunder.
Notwithstanding anything herein to the contrary, in the event of any of the
following:
(a) The Company is merged or consolidated with another corporation or
entity and, in connection therewith, consideration is received by shareholders
of the Company in a form other than stock or other equity interests of the
surviving entity;
(b) All or substantially all of the assets of the Company are acquired
by another person;
(c) The Company's reorganization or liquidation; or
(d) The Company shall enter into a written agreement to undergo an
event described in clauses (a), (b) or (c) above,
then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Options and pay to the
Participant, in cash, the value of such Options based upon the price per share
of Stock received or to be received by other shareholders of the Company in such
event and the per share exercise price of the Options.
6. EXERCISE: PAYMENT FOR AND DELIVERY OF COMMON STOCK. The Options shall
be exercised by delivering written notice to the Committee stating the number of
shares of Common Stock to be purchased, the person or persons in whose name the
shares of Common Stock are to be registered and each such person's address and
social security number. Such notice shall not be effective unless accompanied by
the full purchase price for all shares to be purchased, and any applicable
withholding (as described below). The purchase price shall be payable in cash,
in shares of Common Stock, any combination of cash or shares of Common Stock or
any other method authorized by the Plan and consented to by the Committee;
PROVIDED, HOWEVER, that the Participant may use Common Stock in payment of the
exercise price only if the shares so used are considered "mature" for purposes
of generally accepted accounting principles (I.E., (i) been held by the
Participant free and clear for at least six (6) months prior to the use thereof
to pay part of an Option exercise price, (ii) been purchased by the Participant
in other than a compensatory transaction, or (iii) meet any other requirements
for "mature" shares as may exist
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on the date of the use thereof to pay part of an Option exercise price). In the
event that all or part of the purchase price is paid in shares of Common Stock,
the shares used in payment shall be valued at their Fair Market Value on the
date of exercise of the Options. At the time of exercise, the Participant shall
pay to the Company, in cash, or by having the Company withhold upon exercise of
the Option a sufficient number of shares of Common Stock otherwise deliverable
to the Participant based on the Fair Market Value of the Common Stock on the
date of exercise, at the election of the Participant, such minimum amount as the
Company deems necessary to satisfy its obligation to withhold Federal, state or
local income or other taxes incurred by reason of the exercise or the transfer
of shares thereupon. Payment in currency or by certified or cashier's check
shall be considered payment in cash.
7. RESTRICTIVE COVENANTS; REPURCHASE RIGHTS. (a) By accepting the Options,
the Participant represents and agrees for himself and his transferees (whether
by will or the laws of descent and distribution) that:
(i) For the period commencing on the date of this Agreement and ending
on the first anniversary of the termination of the Participant's employment
(such period is hereinafter referred to as the "Restricted Period"), with
respect to any State in which the Company is engaged in business during the
Participant's employment with the Company, the Participant shall not participate
or engage, directly or indirectly, for himself or on behalf of or in conjunction
with any person, partnership, corporation or other entity, whether as an
employee, agent, officer, director, shareholder, partner, joint venturer,
investor or otherwise, in any business activities if such activity consists of
any activity undertaken or expressly contemplated to be undertaken by the
Company or any of its subsidiaries or by the Participant at any time during the
Participant's employment.
(ii) Except with the Company's prior written approval or as may
otherwise be required by law or legal process, the Participant shall not
disclose any material or information which is confidential to the Company or its
subsidiaries and not in the public domain or generally known in the industry,
whether tangible or intangible, made available, disclosed or otherwise known to
the Participant as a result of his employment with the Company.
(iii) During the Restrictive Period, the Participant shall not attempt
to influence, persuade or induce, or assist any other person in so persuading or
inducing, any employee of the Company or its subsidiaries to give up, or to not
commence, employment or a business relationship with the Company.
(b) The Company shall have the right, and not the obligation, to
purchase and acquire from the Participant any or all of the shares of Common
Stock previously acquired by the Participant upon exercise of the Option (the
"Repurchased Shares") if the Committee reasonably determines that the
Participant has violated the covenants set forth in Section 7(a) or the
Participant`s employment is terminated for Cause. The Company may exercise the
right granted to it under this Section 7(b) by delivering written notice to the
Participant stating that the Company is exercising the repurchase right granted
to it under this Section 7(b). The delivery of such notice by the Company to the
Participant shall constitute a binding commitment of the Company to purchase and
acquire all of the Repurchased Shares. The total purchase price for the
Repurchased Shares shall be delivered to the Participant against delivery by the
Participant of
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certificates evidencing the Repurchased Shares no later than 30 days after the
delivery of the election notice by the Company. The price per share of the
Repurchased Shares shall be the lesser of the Fair Market Value of each of the
Repurchased Shares on the date of the Company's delivery of its written notice
to the Participant or the exercise price of the Option.
(c) The Company shall have the right, and not the obligation, to cancel
any or all of the Participant's Options if the Committee reasonably determines
that the Participant has violated the covenants set forth in Section 7(a). The
Company may exercise the right granted to it under this Section 7(c) by
delivering a written notice to the Participant stating that the Company is
exercising the cancellation right granted to it under this Section 7(c).
(d) Anything in this Section 7 to the contrary, the Company shall not
be obligated to purchase any Common Stock at any time to the extent that the
purchase would result in a violation of any law, statute, rule, regulation,
order, writ, injunction, decree or judgment promulgated or entered by any
Federal, state, local or foreign court or governmental authority applicable to
the Company or any of its property.
8. RIGHTS AS STOCKHOLDER. (a) The Participant or a transferee of the
Options shall have no rights as a stockholder with respect to any shares covered
by the Options until he shall have become the holder of record of such shares
(and the Company shall use its reasonable best efforts to cause the Participant
promptly to become the holder of record of such shares), and, except as provided
in Section 5 hereof, no adjustment shall be made for dividends or distributions
or other rights in respect of such shares for which the record date is prior to
the date upon which he shall become the holder or record thereof.
(b) The Participant acknowledges and agrees that any Common Stock
acquired in respect of the Options granted under Section 2 shall be "Shares" as
such term is used in the Stockholders Agreement, dated as of December 7, 1999,
among the Company and certain "Investors" listed in Schedule I thereto, and, as
such, will be subject to certain restrictions, including restrictions on resale
and such other transfers. In the event of any conflict or inconsistency between
the terms and provisions of this Agreement and the Stockholders Agreement, the
Stockholders Agreement shall govern and control.
9. COMPANY; PARTICIPANT. (a) The term "Company" as used in this Agreement
with reference to employment or as otherwise indicated by the context shall
include the Company and its Related Entities.
(b) Whenever the word "Participant" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, legal representatives, the person
or persons to whom the Options may be transferred by will or by the laws of
descent and distribution or any other transferee to whom the Options may be
transferred with the consent of the Committee, the word "Participant" shall be
deemed to include such person or persons.
10. REQUIREMENTS OF LAW. (a) By accepting the Options, the Participant
represents and agrees for himself and his transferees (whether by will or the
laws of descent and distribution) that, unless a registration statement under
the Securities Act of 1933, as amended
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(the "Act"), is in effect as to shares purchased upon any exercise of the
Options, (i) any and all shares so purchased shall be acquired for his personal
account and not with a view to or for sale in connection with any distribution,
and (ii) each notice of the exercise of any portion of this Option shall be
accompanied by a representation and warranty in writing, signed by the person
entitled to exercise the same, that the shares are being so acquired in good
faith for his personal account and not with a view to or for sale in connection
with any distribution.
(b) No certificate or certificates for shares of Common Stock may be
purchased, issued or transferred if the exercise hereof or the issuance or
transfer of such shares shall constitute a violation by the Company or the
Participant of any (i) provision of any Federal, state or other securities law,
(ii) requirement of any securities exchange listing agreement to which the
Company may be a party, or (iii) other requirement of law or of any regulatory
body having jurisdiction over the Company. Any reasonable determination in this
connection by the Board, upon notice given to the Participant, shall be final,
binding and conclusive.
(c) The certificates representing shares of Common Stock acquired
pursuant to the exercise of Options shall carry such appropriate legend, and
such written instructions shall be given to the Company's transfer agent, as may
be deemed necessary or advisable by counsel to the Company in order to comply
with the requirements of the Act or any state securities laws.
11. NOTICES. Any notice to be given to either party shall be in writing
and shall be given by hand delivery to such party or by registered or certified
mail, return receipt requested, postage prepaid, addressed to the Company in
care of its Secretary at its principal office, and to the Participant at the
address given beneath his signature hereto, or at such other address as either
party shall have furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually received by the
addressee.
12. BINDING EFFECT. This Agreement shall be binding upon the heirs,
executors, administrators, successors and permitted assigns of the parties
hereto.
13. THE PLAN. The terms and provisions of the Plan are incorporated herein
by reference and made a part hereof as though fully set forth herein. In the
event of any conflict or inconsistency between discretionary terms and
provisions of this Agreement, this Agreement shall govern and control. In all
other instances of conflicts or inconsistencies or omissions, the terms and
provisions of the Plan shall govern and control. All capitalized terms not
otherwise expressly defined in this Agreement shall have the meaning ascribed to
them in the Plan.
14. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.
15. ENTIRE AGREEMENT. This Agreement, together with the Plan, contains the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto.
IN WITNESS WHEREOF, the Company has granted this Option on the date of
grant specified above. This instrument may be executed in any number of
counterparts, each of
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which shall be deemed to be an original, and such counterparts together shall
constitute one and the same instrument.
XXXXXX MEDICAL GROUP, INC.
By:
---------------------------------
Name:
Title:
ACCEPTED:
-----------------------
[Participant Name]
[Participant Address]
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