Exhibit 10.2
Lifeline Systems, Inc.
Nonstatutory Stock Option Agreement
Granted Under 2000 Stock Incentive Plan
1. Grant of Option.
This agreement evidences the grant by Lifeline Systems, Inc., a
Massachusetts corporation (the "Company"), on February 13, 2003 (the "Grant
Date") to Xxxxxx Xxxxxxxxx, an employee of the Company (the "Participant"), of
an option to purchase, in whole or in part, on the terms provided herein and in
the Company's 2000 Stock Incentive Plan (the "Plan"), a total of 45,000 shares
(the "Shares") of common stock, $.02 par value per share, of the Company
("Common Stock") at $20.95 per Share. Unless earlier terminated, this option
shall expire on the tenth anniversary of the Grant Date (the "Final Exercise
Date").
It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the "Code"). Except
as otherwise indicated by the context, the term "Participant", as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.
2. Vesting Schedule.
(a) This option will become exercisable ("vest") as to one third of the
original number of Shares on the third anniversary of the Grant Date and as to
an additional one third of the original number of Shares at the end of each
successive anniversary following the third anniversary of the Grant Date until
the fifth anniversary of the Grant Date.
(b) The right of exercise shall be cumulative so that to the extent the
option is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
(c) Notwithstanding subsection (a) above, in the event that the
Participant's employment is terminated pursuant to Section 11(iii) of that
certain Employment and Noncompetition Agreement effective as of April 2, 2003
(the "Employment Agreement"), any unvested options shall vest.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in
writing in form reasonably acceptable to the Company, signed by the Participant,
and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share or for
fewer than ten whole shares.
(b) Continuous Relationship with the Company Required. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any parent or subsidiary of the Company
as defined in Section 424(e) or (f) of the Code (an "Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant
ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that this option shall be exercisable only to the extent that
the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of one
year following the date of death or disability of the Participant, by the
Participant, provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) Discharge for Cause. If the Participant, prior to the Final Exercise
Date, is discharged by the Company for "cause" (as defined in the Employment
Agreement), the right to exercise this option shall terminate immediately upon
the effective date of such discharge. The Participant shall be considered to
have been discharged for "cause" if the Company determines, within 30 days after
the Participant's resignation, that discharge for cause was warranted.
4. Withholding.
No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
5. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
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6. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed by
its duly authorized officer.
Lifeline Systems, Inc.
Dated: February 13, 2003 By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: SVP Finance/Chief Financial
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Officer
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PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the Company's 2000 Stock Incentive Plan.
PARTICIPANT:
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Address: C/o Lifeline Systems, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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