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EXHIBIT 10.20
APACHE MEDICAL SYSTEMS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
APACHE MEDICAL SYSTEMS, INC., a Delaware corporation (the "Company"), hereby
grants to Xxxxxxx X. Xxxxx, M.D. ("Optionee"), an option (the "Option") to
purchase a total of Ten Thousand, Four Hundred and Ninety (10,490) shares (the
"Shares") of Common Stock of the Company, at the price provided herein.
1. Nature of the Option. This Option is a non-statutory option and is not
intended to qualify for any special tax benefits to Optionee.
2. Exercise Price. This exercise price is $6.375 for each share of Common
Stock.
3. Vesting. This Option shall vest on September 30, 1997.
4. Exercise of Option. Subject to Section 6 hereof, this Option shall be
exercisable during its term as follows:
(i) Right to Exercise. This Option may be exercised in one or more
tranches at any time from the date vested through the tenth anniversary hereof.
This Option may not be exercised for a fraction of a share.
(ii) Method of Exercise. This Option shall be exercisable from time to
time by written notice which shall state the number of Shares in respect of
which this Option is being exercised. Such written notice shall be signed by
Optionee or an authorized officer thereof, as the case may be, and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price.
No Shares will be issued pursuant to the exercise of this Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be
listed.
(iii) Number of Shares Exercisable. Each exercise of this Option hereunder
shall reduce the total number of Shares that may thereafter be purchased under
this Option.
5. Representations. In the event the Shares purchasable pursuant to the
exercise of this Option have not been registered under the Securities Act of
1933, as amended ("Securities Act"), at the time this Option is exercised,
Optionee or an authorized officer thereof, as the case may be, shall,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company his or its Investment Representation Statement in the form attached
hereto as Exhibit 1.
6. Method of Payment. Payment of the exercise price shall be by cash or
check.
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7. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule
under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G")
as promulgated by the Federal Reserve Board. As a condition to the exercise of
this Option, the Company may require Optionee or an officer thereof, as the
case may be, to make any representation and warranty to the Company as may be
required by any applicable law or regulation.
8. Non-Transferability of Option. This Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of by Optionee in any manner
other than by will or by the laws of descent or distribution and, in the case
of an individual Optionee, may be exercised during the lifetime of Optionee
only by him. The terms of this Option shall be binding upon the executors,
administrators, heirs and successors of Optionee.
9. Stock Split. In the event of a stock split, stock dividend,
recapitalization, reclassification or combination of shares or other similar
event, the number of shares subject to outstanding options, the appropriate
exercise price and other price determinations applicable to the options shall
be adjusted to appropriately reflect such event.
DATE OF GRANT: May 29, 1997
APACHE Medical Systems, Inc.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
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Title: Chairman and Chief Executive Officer
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Agreed to this 29th day of
May, 1997
Xxxxxxx X. Xxxxx, M.D.
By: /s/ Xxxxxxx X. Xxxxx
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EXHIBIT 1
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: Xxxxxxx X. Xxxxx, M.D.
SELLER: APACHE MEDICAL SYSTEMS, INC.
COMPANY: APACHE MEDICAL SYSTEMS, INC.
SECURITY: COMMON STOCK
AMOUNT: [Number of Shares exercised]
DATE: [Date of exercise]
In connection with the purchase of the above-listed Securities, the Purchaser
represents to the Seller and to the Company, the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired all such information about the Company as I deem
necessary and appropriate to enable me to reach an informed and knowledgeable
decision to acquire the Securities. I am purchasing these Securities for my
own account for investment and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes of the Securities Act
of 1933, as amended ("Securities Act").
(b) I understand that the Securities have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein.
(c) I further understand that the Securities may not be sold
publicly and must be held indefinitely unless they are subsequently registered
under the Securities Act or unless an exemption from registration is available.
I am able, without impairing my financial condition, to hold the Securities for
an indefinite period of time and to suffer a complete loss on my investment. I
understand that the Company is under no obligation to me to register the
Securities except as set forth in the Registration Agreement between Optionee
and the Company dated January 6, 1997. In addition, I understand that the
certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such
registration is not required in the opinion of counsel for the Company.
(d) I am familiar with the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (i)
the availability of certain public information about the Company; (ii) the
resale occurring not less than two years
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after the party has purchased, and made full payment for, within the meaning of
Rule 144, the securities to be sold; and, in the case of an affiliate, or of a
non-affiliate who has held the securities less than three (3) years the sale
being made through a broker in an unsolicited "broker's transaction" or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934) and the amount of securities being sold during
any three-month period not exceeding the specified limitations stated therein,
if applicable.
(e) I further understand that at the time I wish to sell the
Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that,
in such event, I would be precluded from selling the Securities under Rule 144
even if the two-year minimum holding period had been satisfied. I understand
that the Company is under no obligation to me to make Rule 144 available.
(f) I further understand that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available from such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own
risk.
By:
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Xxxxxxx X. Xxxxx, M.D.
Date:
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[Date of execution by Optionee]
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