Exhibit 10.13
STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT is made as of the 20th day of January,
1997, between Unilab Corporation, a Delaware corporation (hereinafter called the
"Corporation"), and Xxxxx X. Xxxxxx, a key employee of the Corporation
(hereinafter called the "Option Holder").
1. Grant of Option. Pursuant to the provisions of that certain
Employment Agreement, dated January 20, 1997, between the Corporation and Option
Holder, the Corporation hereby grants to the Option Holder the right and option,
hereinafter called the "Option", to purchase an aggregate of Two Hundred
Fifty-Thousand (250,000) shares (the "Shares") of the Corporation's $0.01 par
value common stock (such number being subject to adjustment as provided in
paragraph 7 hereof), on the terms and conditions herein set forth. Such Option
shall vest as follows: Twenty (20%) Percent of the Option herein granted (for up
to 50,000 shares) shall vest and may be exercised on or after January 20, 1998;
Twenty (20%) Percent of the Option herein granted (for up to 50,000 shares)
shall vest and may be exercised on or after January 20, 1999; Twenty (20%)
Percent of the Option herein granted (for up to 50,000 shares) shall vest and
may be exercised on or after January 20, 2000; Twenty (20%) Percent of the
Option herein granted (for up to 50,000 shares) shall vest and may be exercised
on or after January 20, 2001; Twenty (20%) Percent of the Option herein granted
(for up to 50,000 shares) shall vest and may be exercised on or after January
20, 2002 (unless terminated earlier pursuant to paragraph 6 hereof).
2. Purchase Price. The purchase price of the Shares covered by the
Option shall be Seven-sixteenths of a dollar ($0.4375) per Share.
3. Term of Option. Subject to paragraph 8 hereof, the Option granted
hereby shall be exercisable as to a portion of the total Shares in accordance
with paragraph 1. The Option Holder's right to exercise the aforementioned
Option shall expire ten (10) years from the date hereof. Unless terminated
earlier pursuant to paragraph 6 hereof, any Option not exercised within such
time specified of the date hereof shall terminate.
4. Nontransferability. The Option shall not be transferable otherwise
than (i) by will or the laws of descent and distribution and (ii) to parents,
siblings, spouses or children of the Option Holder or to any trust or similar
device intended for any of such persons' respective benefit (a "Permitted
Transferee"), and the Option may be exercised, during the lifetime of the Option
Holder, only by him or such Permittee Transferree. More particularly (but
without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided herein), pledged, or hypothecated in
any way, shall not be assignable by operation of law, and shall not be subject
to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment, or similar
process upon the Option shall be null and void and without effect.
5. Disclosure and Risk. The Option Holder represents and warrants to
the Corporation as follows:
(a) The Shares will be acquired by the Option Holder for the Option
Holder's own account, for investment and not with a view to, or for
resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").
(b) As of the date of the grant and of exercise, because of his
position with the Corporation, and as a result of inquiries made by him
and information furnished to him by the Corporation, Option Holder has
and will have all information necessary for him to make an informed
investment decision.
Each certificate representing the Shares shall, if applicable, be
endorsed with the following or a substantially similar legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE `SECURITIES ACT'),
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE
IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES, OR THE CORPORATION RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES, REASONABLY SATISFACTORY TO THE CORPORATION,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION MAY BE
MADE PURSUANT TO RULE 144, PROMULGATED UNDER THE SECURITIES ACT, OR IS
OTHERWISE EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT AND APPLICABLE STATE SECURITIES LAWS."
The Corporation need not allow a transfer of any of the Shares unless
one of the conditions specified in the foregoing legend is satisfied. The
Corporation may also instruct its transfer agent not to allow the transfer of
any of the Shares unless one of the conditions specified in the foregoing legend
is satisfied.
Any legend endorsed on a certificate pursuant to the foregoing language
and the stop transfer instructions with respect to such Shares shall be removed
and the Corporation shall promptly issue a certificate without such legend to
the holder thereof if the Shares are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if the holder provides the Corporation with an opinion of counsel
for such holder of the Shares reasonably satisfactory to the Corporation, to the
effect that a public sale, transfer or assignment of such Shares may be made
without registration.
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6. Termination of Employment; Death.
(a) In the event that the Option Holder shall cease to be an employee
of the Corporation or any of its subsidiaries for any reason
whatsoever, the Option may be exercised by the Option Holder (to the
extent that the Option Holder shall have been entitled to do so as of
the date of his termination of employment with the Corporation or any
of its subsidiaries) at any time within 365 days after such termination
but in any event not later than the date of expiration of the Option
term. So long as the Option Holder shall continue to be an employee of
the Corporation or any of its subsidiaries, the Option shall not be
affected by any change of duties or position. Nothing in this Option
Agreement shall confer upon the Option Holder any right to continue as
an employee of the Corporation or any of its subsidiaries.
(b) In the event that the Option Holder dies prior to exercising all or
any portion of the Option, the Option may be exercised by the estate of
the Option Holder (to the extent that the Option Holder shall have been
entitled to do so) at any time within 365 days after the death of the
Option Holder, but in any event not later than the date of expiration
of the Option term.
7. Changes in Capital Structure. If all or any portion of the Option
shall be exercised subsequent to any share dividend, split-up, recapitalization,
merger, consolidation, combination or exchange of shares, separation,
reorganization, or liquidation occurring after the date hereof, as a result of
which shares of any class shall be issued in respect of outstanding Shares or
Shares shall be changed into the same or a different number of shares of the
same or another class or classes, the person or persons exercising the Option
shall receive, for the aggregate price paid upon such exercise, the aggregate
number and class of shares which, if the Shares (as authorized at the date
hereof) had been purchased at the date hereof for the same aggregate price (on
the basis of the price per share set forth in paragraph 2 hereof) and had not
been disposed of, such person or persons would be holding at the time of such
exercise as a result of such purchase and all such share dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations, reorganizations, or liquidations; provided, however, that no
fractional shares shall be issued upon any such exercise, and the aggregate
price paid shall be appropriately reduced on account of any fractional share not
issued. In no event shall any adjustments be made to the Option as a result of
the issuance or redemption of securities of the Corporation for cash or other
consideration, or upon the exercise of any conversion rights of any securities
of the Corporation.
8. Method of Exercising Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Secretary of the Corporation, at its principal office or such other location as
may be designated by the Secretary of the Corporation. Such notice shall state
the election to exercise the Option and the number of Shares in respect of which
it is being exercised, and shall be signed by the person or persons so
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exercising the Option. The notice of election shall be accompanied by this
Agreement and payment of the full purchase price for the Shares being purchased.
The Corporation shall deliver a certificate or certificates representing Shares
as soon as practicable after the notice of election has been received. In the
event the Option shall be exercised by any person or persons other than the
Option Holder, the notice of election shall be accompanied by appropriate proof
of the right of such person or persons to exercise the Option. All Shares that
shall be purchased upon the exercise of the Option as provided herein shall be
fully paid and nonassessable.
9. Mergers, Recapitalizations and Dissolutions. As long as Optionee is
an employee of the Corporation or any of its subsidiaries, the "acquisition" of
the Corporation by another entity or a "change in control" of the Corporation
shall cause each outstanding option: (i) in the event of an acquisition, to
become an option to purchase shares of the acquiring entity, for the balance of
the term of the option without regard to any nonsatisfied vesting provisions or
condition precedent which may be contained in paragraph 1 of this Agreement, at
a price and for a number of shares as is consistent with the acquisition terms;
and (ii) in the event of a change in control, to become exercisable in whole or
in part, without regard to any vesting provisions or condition precedent which
may be contained in paragraph 1 of this Agreement. The "acquisition" of the
Corporation by another entity shall be defined to be either a merger or
consolidation with an acquiring entity (or subsidiary or affiliate thereof) in
which the Corporation is not the surviving entity or in which the Corporation
becomes a subsidiary of an acquiring entity; the sale of substantially all of
the Corporation's assets; or the dissolution or liquidation of the Corporation.
For purposes of this paragraph, a "change in control" shall mean a change of
control of a nature that would be required to be reported in response to Item
1(a) of the Current Report on Form 8-K, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"); provided that, without
limitation, such a change in control shall be deemed to have occurred at such
time as any "person", within the meaning of Section 14(d) of the Exchange Act,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 30% or more of the outstanding capital
stock of the Corporation.
10. Optionee Not a Shareholder. The Option Holder under this Option,
as such, shall not be entitled by any reason of this Option to any rights
whatsoever as a shareholder of the Corporation.
11. General Provisions.
(a) The Corporation shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient
to satisfy the requirements of this Option Agreement, shall pay all
fees and expenses necessarily incurred by the Corporation in connection
therewith, and shall use its best efforts to comply with all laws and
regulations which, in the reasonable opinion of counsel for the
Corporation, are applicable thereto.
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(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware other than its conflicts of laws
provisions.
(c) Any notice to be given hereunder by either party to the other shall
be in writing and shall be given either by personal delivery or by
mail, registered or certified, postage prepaid, return receipt
requested, addressed to the other party at the respective addresses set
forth below their signatures to this Agreement, or at any other address
as such party may hereafter specify in writing.
(d) This Agreement sets forth the entire agreement of the parties
concerning the subject matter hereto, and no other representations or
warranties, express or implied, other than those contained herein, and
no amendments or modifications hereto, shall be binding unless made in
writing and signed by the parties hereto.
(e) The waiver by either party of a breach of any term or provision of
this Agreement shall not operate or be construed as a waiver of a
subsequent breach of the same provision or of the breach of any other
term or provision of this Agreement.
(f) As used herein, the masculine gender shall include the feminine and
the neuter genders, the neuter shall include the masculine and the
feminine genders, the singular shall include the plural, and the plural
shall include the singular.
(g) The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or
interpretation of this Agreement.
(h) The invalidity or enforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
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IN WITNESS WHEREOF, the Corporation has caused this Option Agreement to
be duly executed by its officer thereunto duly authorized, and the Option Holder
has hereunto set his hand and seal, all as of the day and year first above
written.
OPTION HOLDER
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Name: Xxxxx Xxxxxx
Address: 000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX
UNILAB CORPORATION
By:_______________________________
Name:
Title:
Address:
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