Exhibit 6
FORM OF OPTION AGREEMENT
XXXXXX DRUG CO., INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
XXXXXX DRUG CO., INC., a New York corporation (the "Company"), hereby
grants Oracle Strategic Partners (the "Optionee"), an Option to purchase
___________ shares (the "Shares") of the Company's common stock, $.01 par value
per share ("Common Stock"), at the price set forth in Paragraph 2 hereof, and in
all respects subject to the terms, definitions and provisions of the Company's
1998 Stock Option Plan (the "Plan"), a copy of which is enclosed and
incorporated herein by reference. Terms not defined shall have the meanings set
forth in the Plan. In the event of any conflict between the terms of this
Agreement and the Plan the terms of the Plan shall control.
1. NATURE OF OPTION. This Option is not intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
2. EXERCISE PRICE. The exercise price of the Shares shall be equal to
$______ Dollars and _____ Cents per share of Common Stock subject to this
Option.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term as
follows:
(a) Condition Precedent to Exercise. This Option shall not be exercisable
unless and until Optionee has entered into the Stockholders Agreement with the
Company.
(b) Vesting Period.
(i) This Option shall vest quarterly and only be exercisable in the
amounts and dates indicated below:
a. _________ of the Shares shall vest and be exercisable on
___________, and
b. an additional _______ of the Shares shall vest and be
exercisable on ___________, and
c. an additional ________ of the Shares shall vest and be
exercisable on ___________, and
d. an additional ________ of the Shares shall vest and be
exercisable on ___________.
(ii) This Option may not be exercised for a fraction of a share.
(iii) In the event of the Optionee's termination of employment due to
disability, death or as otherwise provided for in Section 9 of the Plan,
the exercisability of this Option is governed by Section 9 of the Plan.
(c) Method of Exercise. This Option shall be exercisable by written notice
which shall state the election to exercise this Option, the number of Shares in
respect of which the Option is being exercised, and such other representations
and agreements as to the holder's investment intent with respect to such Shares
of Common Stock as may be required by the Company pursuant to the provisions of
the Plan. Such representations and agreements shall be substantially similar to
the form of Investment Representation Statement attached hereto as Schedule A.
Such written notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the President/Treasurer of the Company. The
written notice shall be accompanied by payment of the Exercise Price pursuant to
the provisions of Section 2.
No Shares will be issued pursuant to the exercise of an 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.
(d) Method of Payment. Payment of the Exercise Price shall be by cash,
check, promissory note (if approved by the Company as an accepted method of
payment) or Shares of the Company's Common Stock (if approved by the Company as
an accepted method of payment) having a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which the
Option shall be exercised, or any combination of such payment methods.
4. 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 the Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation.
5. TERMINATION OF STATUS AS AN EMPLOYEE. If the Optionee ceases to serve as
an Employee, he may, but only within ninety (90) days after the date he ceased
to be an Employee of the Company, exercise this Option to the extent that he was
entitled to exercise it at the date of such termination. To the extent that he
was not entitled to exercise this Option at the date of such termination, or if
he does not exercise this Option within the time specified herein, this Option
shall terminate.
6. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 5
above, if the Optionee is unable to continue his employment with the Company as
a result of his total and permanent disability (within the meaning of Section
22(e)(3) of the Code), he may, but only within twelve (12) months from the date
of termination of employment due to such disability, exercise this Option to the
extent he was entitled to exercise it at the date of such termination. If he
does not exercise this Option (which he was entitled to exercise) within the
time specified herein, this Option shall terminate.
7. DEATH OF OPTIONEE. In the event of the death of the Optionee:
(a) during the term of this Option and while an Employee of the Company and
having been in Continuous Status as an Employee since the date of grant of this
Option, this Option may be exercised, at any time within twelve (12) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise this Option by bequest or inheritance, but only
to the extent of the right to exercise that would have accrued had the Optionee
continued living until one (1) month after the date of death; or
(b) within thirty (30) days after the termination of the Optionee's
Continuous Status as an Employee, this Option may be exercised, at any time
within three (3) months following the date of death, by the Optionee's estate or
by a person who acquired the right to exercise this Option by bequest or
inheritance, but only to the extent of the right to exercise that had accrued at
the date of termination.
8. RESTRICTIONS ON TRANSFER. This Option may not be sold, pledged,
assigned, hypothecated, or otherwise transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of the Optionee only by the Optionee. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.
9. TERM OF OPTION. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, and may be exercised during such
term only in accordance with the Plan and the terms of this Option.
10. NO RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to any Shares covered by this Option until the date of
the issuance of a stock certificate to him for such Shares.
11. ANTI-DILUTION PROVISIONS. If prior to expiration of this Option there
shall occur any change in the outstanding Common Stock of the Company by reason
of any stock dividend, stock split, combination or exchange of shares, merger,
consolidation, recapitalization, reorganization, liquidation, subscription
rights offering, or the like, and as often as the same shall occur, then the
kind and number of shares subject to the Option, or the purchase price per share
of Common Stock, or both, shall be adjusted by the Board of Directors in such
manner as it may deem equitable, the determination of which shall be binding and
conclusive. Failure of the Board of Directors to provide for any such adjustment
shall be conclusive evidence that no adjustment is required. The Company shall
have the right to engage a firm of independent auditors, to make any computation
provided for in this Section, and a certificate of that firm showing the
required adjustment shall be conclusive and binding
12. NO OBLIGATION TO EXERCISE OPTION. The granting of this Option shall
impose no obligation upon the Optionee to exercise such Option.
13. SECURITIES LAW RESTRICTIONS. It is understood and agreed that the
Company is under no obligation to file a registration statement under the
Securities Act of 1933, as amended (the "Act") with respect to the shares to be
received upon exercise of the Option. If, however, a registration statement
under the Act has been filed and remains effective with respect to the shares,
the Company shall require that the offer and sale of such shares be exempt from
the registration provisions of the Act. As a condition of such exemption, the
Company shall require a representation and undertaking, in form and substance
satisfactory to counsel for the Company, that Optionee is acquiring the shares
for Optionee's own account for investment and not with a view to the
distribution or resale thereof and shall otherwise require such representations
and impose such conditions as shall establish to the Company's satisfaction that
the offer and sale of the shares issuable upon the exercise of the option will
not constitute a violation of the Act or any similar state act affecting the
offer and sale. If the shares are issued in an exempt transaction, the shares
will bear the following restrictive legend:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (the "ACT"). NO TRANSFER OF THE
SHARES MAY BE AFFECTED WITHOUT AN OPINION OF COUNSEL TO THE
COMPANY STATING THAT THE TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR THAT THE TRANSFER OF THE SHARES IS
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
TO THE SHARES.
14. ACCEPTANCE OF PROVISIONS. The execution of this Option Agreement by
Optionee shall constitute Optionee's acceptance of and agreement to all of the
terms and conditions of the Plan and this Option Agreement.
15. NOTICES. (a) All notices and other communications required or permitted
under the Plan and this Agreement shall be in writing and shall be given either
by (i) personal delivery or regular mail, in each case against receipt, or (ii)
first class registered or certified mail, return receipt requested. All such
notices or communications to the Company shall be addressed to the attention of
its President, at its then principal office, and to Optionee at his last address
appearing on the records of the Company or, in each case, to such other person
or address as may be designated by like notice hereunder.
(b) Any notice of exercise, in whole or in part, of an Option granted
hereby must be received by the Corporation at its principal office at 000 Xxxxx
Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 by 5:00 p.m. on the day on which an
Option or portion thereof expires.
16. GOVERNING LAW. This Option shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent
pre-empted by federal law.
17. MISCELLANEOUS. (a) Merger. This Agreement and the Plan contain a
complete statement of all the arrangements between the parties with respect to
their subject matter, and this Agreement cannot be changed except by a writing
executed by both parties.
(b) Variations in Pronouns. All pronouns and any variations thereof used
herein refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
(c) Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
DATE OF GRANT: ____________ XXXXXX DRUG CO., INC.
By:
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Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
Acknowledgment and Acceptance of Optionee
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The Optionee acknowledges receipt of a copy of the Plan, a copy of which is
annexed hereto, and represents that he is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Board upon any questions or
disputes arising under the Plan.
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Name:
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Dated:
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SCHEDULE A
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INVESTMENT REPRESENTATION STATEMENT
PURCHASER:
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COMPANY: XXXXXX DRUG CO., INC.
SECURITY: COMMON STOCK
DATE:
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial condition,
and have acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the securities. I am purchasing these
Securities for my own account for investment purposes only 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. In this connection, I understand that, in the view of the
Securities and Exchange Commission ("SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future.
(c) I further understand that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available. 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: (1)
the availability of certain public information about the Company; (2) the resale
occurring not less than one (1) year after the party has purchased, and made
full payment within the meaning of Rule 144, for the securities to be sold; and,
in the case of an affiliate, or of a non-affiliate who has held the securities
less than two (2) 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 (3) month period not exceeding the
specified limitations stated in Rule 144, 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 one (1) year
minimum holding period is satisfied.
(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 SEC 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 for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
(g) I understand that the certificate evidencing the Securities will be
imprinted with a legend noting the above restrictions on sale.
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Purchaser:
Date: ____________, 19__
