EXHIBIT 10.2
NQO AGREEMENT
THIS AGREEMENT is entered into as of the Grant Date (as defined in
paragraph 1) by and between the Participant and Microtek Medical Holdings, Inc.
(the "Company");
WITNESSETH THAT:
WHEREAS, the Company maintains the 1999 Long-Term Incentive Plan (the
"Plan"), which is incorporated into and forms a part of this Agreement, and the
Participant has been selected by the committee administering the Plan (the
"Committee") to receive an Non-Qualified Stock Option Award under the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:
1. TERMS OF AWARD. The following terms used in this Agreement shall have
the meanings set forth in this paragraph 1:
(a) The "Participant" is __________.
(b) The "Grant Date" is __________.
(c) The number of "Covered Shares" shall be __________ shares of Stock.
(d) The "Exercise Price" is $__________ per share.
Other terms used in this Agreement are defined pursuant to paragraph 8 or
elsewhere in this Agreement.
2. AWARD AND EXERCISE PRICE. This Agreement specifies the terms of the
option (the "Option") granted to the Participant to purchase the number of
Covered Shares of Stock at the Exercise Price per share as set forth in
paragraph 1. The Option is not intended to constitute an "incentive stock
option" as that term is used in Code Section 422.
3. DATE OF EXERCISE. Subject to the limitations of this Agreement, the
Option shall be exercisable on a cumulative basis according to the following
schedule, with respect to each installment shown in the schedule on and after
the "Vesting Date" (defined as set forth below) applicable to such installment:
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VESTING DATE
APPLICABLE TO
INSTALLMENT INSTALLMENT
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An installment shall not become exercisable on the otherwise applicable Vesting
Date if the Participant's Date of Termination (as defined in the Plan) occurs on
or before such Vesting Date. Notwithstanding the foregoing provisions of this
paragraph 3, the Option shall become exercisable with respect to all of the
Covered Shares (to the extent it is not then otherwise exercisable) upon a
Change of Control (as defined in the Plan), except that it shall not become
exercisable (a) if the exercisability of this Option would result in an "excess
parachute payment" within the meaning of Section 280G of the Code as determined
by the Committee based on information available to it at said time, (b) if
following such Change of Control this Option shall remain in effect in
accordance with its terms (subject to such adjustments as may be made in
accordance with Section 4.2(c) of the Plan), or (c) if the Company exercises its
rights under the following sentence. The Company shall have the right,
exercisable in the sole discretion of the Company by notice to Participant upon
or in anticipation of any merger of the Company with or into another corporation
or exchange of outstanding capital stock of the Company for capital stock of
another corporation, to require Participant to purchase, within ten days from
the date of such notice, all or any portion of the remaining Shares which are
subject to this Option and which the Participant shall not have previously
purchased in accordance with this Option to the extent Participant shall desire
to do so in the manner otherwise provided in this Option, and this Option shall
terminate as to any shares not so purchased as of the date which is ten days
after the date of such notice from the Company to Participant.
4. EXPIRATION. The Option shall not be exercisable after the Company's
close of business on the Expiration Date (or, if the Expiration Date is not a
date in which the Company is open for business, the next regular business day of
the Company). The "Expiration Date" shall be earliest to occur of:
(a) the ten-year anniversary of the Grant Date;
(b) if the Participant's Date of Termination occurs by reason of death,
Disability, Early Retirement or Retirement, the __________-month anniversary of
such Date of Termination;
(c) if Participant's Date of Termination occurs for Cause, then the Date of
Termination; or
(d) if the Participant's Date of Termination occurs for reasons other than
Cause, death, Disability, Early Retirement or Retirement, the __________-month
anniversary of such Date of Termination.
In the event Participant's Date of Termination occurs for Cause, then the
Company shall have the right, exercisable at the election of the Company by
written notice to Participant given within thirty days following the Date of
Termination, to purchase all of the Covered Shares previously purchased by
Participant for a purchase price equal to the Exercise Price.
5. METHOD OF OPTION EXERCISE. Subject to this Agreement and the Plan, the
Option may be exercised in whole or in part by filing a written notice with the
Secretary of the Company or his designee at its corporate headquarters prior to
the Company's close of business on the Expiration Date. Such notice shall
specify the number of shares of Stock which the Participant elects to purchase,
and shall be accompanied by payment of the Exercise Price for such shares of
Stock indicated by the Participant's election. Payment shall be by cash or by
check payable to the Company. Except as otherwise provided by the Committee, (i)
all or a portion of the Exercise Price may be paid by the Participant by
delivery of shares of Stock owned by the Participant and acceptable to the
Committee having an aggregate Fair Market Value (valued as of the date of
exercise) that is equal to the amount of cash that would otherwise be required;
and (ii) the Participant may pay the Exercise Price by authorizing a third party
to sell shares of Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire Exercise Price and any tax withholding resulting from
such exercise. The Option shall not be exercisable if and to the extent the
Company determines that such exercise would violate applicable state or Federal
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securities laws or the rules and regulations of any securities exchange on which
the Stock is traded. If the Company makes such a determination, it shall use all
reasonable efforts to obtain compliance with such laws, rules or regulations. In
making any determination hereunder, the Company may rely on the opinion of
counsel for the Company. Any certificate representing shares of Stock issued
upon exercise of this Option shall contain such legends as the Company shall in
its discretion require.
6. WITHHOLDING. All deliveries and distributions under this Agreement are
subject to withholding of all applicable taxes. Any exercise of the Option shall
be subject to the Participant's payment to the Company of an amount sufficient
to satisfy any federal, state and local tax withholding requirements. At the
election of the Participant, and subject to the approval of the Committee, such
withholding obligations may be satisfied through the surrender of shares of
Stock which the Participant already owns, or to which the Participant is
otherwise entitled under the Plan.
7. TRANSFERABILITY. Except as otherwise provided in this paragraph 7, the
Option is not transferable other than as designated by the Participant by will
or by the laws of descent and distribution, and during the Participant's life,
may be exercised only by the Participant. However, the Participant, with the
approval of the Committee (which shall be in the Committee's sole discretion),
may transfer the Option for no consideration to or for the benefit of the
Participant's Immediate Family (including, without limitation, to a trust for
the benefit of the Participant's Immediate Family or to a partnership or limited
liability company for one or more members of the Participant's Immediate
Family), subject to such limits as the Committee may establish, and the
transferees shall remain subject to all the terms and conditions applicable to
the Option prior to such transfer. The foregoing right to transfer the Option
shall apply to the right to consent to amendments to this Agreement and, in the
discretion of the Committee, shall also apply to the right to transfer ancillary
rights associated with the Option. The term "Immediate Family" shall mean the
Participant's spouse, parents, children, stepchildren, adoptive relationships,
sisters, brothers and grandchildren (and, for this purpose, shall also include
the Participant).
8. DEFINITIONS. For purposes of this Agreement, the terms used in this
Agreement shall be subject to the following:
(a) Disability. The Participant shall be considered to have a "Disability"
during the period in which the Participant is unable, by reason of a medically
determinable physical or mental impairment, to engage in his customary
employment with the Company or a Related Company for a duration of not less than
120 days, all as determined in the sole discretion of the Committee.
(b) Cause. "Cause" shall mean (i) the Board of Directors shall have
determined, in good faith, that Participant misappropriated, stole or embezzled
assets of the Company, or (ii) Participant shall have been convicted of a felony
or a crime involving moral turpitude.
(c) Plan Definitions. Except where the context clearly implies or indicates
the contrary, a word, term, or phrase used in the Plan is similarly used in this
Agreement.
9. HEIRS AND SUCCESSORS. This Agreement shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns. If any rights
exercisable by the Participant or benefits deliverable to the Participant under
this Agreement have not been exercised or delivered, respectively, at the time
of the Participant's death, such rights shall be exercisable by the Designated
Beneficiary, and such benefits shall be delivered to the Designated Beneficiary,
in accordance with the provisions of this Agreement and the Plan. The
"Designated Beneficiary" shall be the beneficiary or beneficiaries designated by
the Participant in a writing filed with the Committee in such form and at such
time as the Committee shall require. If a deceased Participant fails to
designate a beneficiary, or if the Designated Beneficiary does not survive the
Participant, any rights that would have been exercisable by the Participant and
any benefits distributable to the Participant shall be exercised by or
distributed to the legal representative of the estate of the Participant. If a
deceased Participant designates a beneficiary but the Designated Beneficiary
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dies before the Designated Beneficiary's exercise of all rights under this
Agreement or before the complete distribution of benefits to the Designated
Beneficiary under this Agreement, then any rights that would have been
exercisable by the Designated Beneficiary shall be exercised by the legal
representative of the estate of the Designated Beneficiary, and any benefits
distributable to the Designated Beneficiary shall be distributed to the legal
representative of the estate of the Designated Beneficiary.
10. ADMINISTRATION. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of the Agreement by the Committee and
any decision made by it with respect to the Agreement is final and binding on
all persons.
11. PLAN GOVERNS. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which may be obtained by the Participant from the office of the
Secretary of the Company; and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time
pursuant to the Plan.
12. NOT AN EMPLOYMENT CONTRACT. The Option will not confer on the
Participant any right with respect to continuance of employment or other service
with the Company or any Related Company, nor will it interfere in any way with
any right the Company or any Related Company would otherwise have to terminate
or modify the terms of such Participant's employment or other service at any
time.
13. NOTICES. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailed but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant's address indicated by the
Company's records, or if to the Company, at the Company's principal executive
office.
14. FRACTIONAL SHARES. In lieu of issuing a fraction of a share upon any
exercise of the Option resulting from an adjustment of the Option pursuant to
paragraph 4.2(c) of the Plan or otherwise, the Company will be entitled to pay
to the Participant an amount equal to the fair market value of such fractional
share.
15. NO RIGHTS AS SHAREHOLDER. The Participant shall not have any rights of
a shareholder with respect to the shares subject to the Option, until a stock
certificate has been duly issued following exercise of the Option as provided
herein.
16. AMENDMENT. This Agreement may be amended by written agreement of the
Participant and the Company, without the consent of any other person.
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IN WITNESS WHEREOF, the Participant has executed this Agreement, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Grant Date.
PARTICIPANT
________________________________________
MICROTEK MEDICAL HOLDINGS, INC.
By: ____________________________________
Its: ___________________________________
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