EXHIBIT 10.7
employment agreement
This Employment Agreement ("Agreement") is made effective as of March ___,
2003 by and between CRITICAL HOME CARE, INC., a Nevada corporation (hereinafter,
including its successors and/or parent, "Company"), and XXXX XXXXXXXX
(hereinafter "Employee").
WHEREAS, Company markets and sells surgical supplies and durable medical
equipment, manufactured by third parties, primarily to individuals residing at
home. Serving those living on Long Island and in the Five Boroughs of New York,
the Company currently operates six retail stores in Westbury, Patchogue,
Babylon, Woodbury, Massapequa Park and East Setauket, New York.; and
WHEREAS, effective upon the execution of this Agreement (the "Effective
Date"), Company desires to employ Employee, and Employee desires to be employed
by Company, as set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals and the
respective covenants, terms and provisions contained herein, the parties hereto
agree as follows:
1. EMPLOYMENT/SALARY. Company hereby agrees to employ Employee, and
Employee hereby accepts such employment, on the terms and conditions set
forth herein, commencing on the Effective Date and continuing for a three
year period thereafter (the "Term"), unless terminated earlier as provided
in Section 2 below. Employee shall report directly to the Company's Board
of Directors.
(a) Position; Duties. Employee shall be employed in the position
of Chief Financial Officer ("CFO"),
During the Term, Employee will devote his full time and best
efforts to Company and will not engage in any outside employment or
business (whether for compensation or otherwise) without the prior
written consent of Company's Board of Directors. Employee shall at all
times faithfully, industriously and to the best of Employee's ability,
experience and talent perform all of the duties that may be assigned
to Employee hereunder. The services to be rendered by Employee shall
include, without limitation, all services customarily rendered by
persons engaged in the same capacity or in a similar capacity, and
such other services as may be reasonably requested by Company from
time to time. Employee shall be responsible for the day-to-day
operation of the Company and its businesses. Employee's
responsibilities shall specifically include, but not be limited to,
directing the operations of the Company's in-house Collections,
Financial Reporting, Maintaining All Books and Records and Investor
Relations.
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Notwithstanding the foregoing, however, this Agreement shall not
be interpreted to prohibit Employee from making personal investments,
serving on other boards of directors and advisory boards, attending
educational classes, or conducting private business affairs if those
activities do not materially interfere with the services required
under this Agreement, provided that Employee shall not directly or
indirectly acquire, hold or retain any material interest in any
business competing, directly or indirectly, with the business of
Company, except for investments in mutual and other similar funds.
(b) Base Salary. The Company shall pay Employee as compensation
for his services hereunder a base salary, commencing as of the
Effective Date, at the annualized rate of $115,000.00 (the "Base
Salary"), subject to Section 1(c) hereof, which amount shall be paid
in accordance with the Company's payroll practices and subject to the
usual and applicable required withholding.
(c) Bonus. Employee shall be entitled, during the term of this
Agreement, to an annual bonus at the discretion of the compensation
committee of the Board of Directors of the Company.
2. TERMINATION.
(a) Termination for Cause. The Company may terminate this
Agreement immediately for cause as defined herein. If Employee's
employment is terminated "for cause", Employee shall be entitled to
exercise his stock options (in accordance with the terms thereof) to
the extent vested as of the date of termination, but shall not be
entitled to receive any additional compensation or accelerated vesting
of his options. For purposes of this Agreement, "Cause" is defined as:
(i) any act of personal dishonesty taken by the Employee in connection
with his responsibilities to the Company which the Board reasonably
determines is injurious to the Company, (ii) Employee's conviction of
a felony or other crime involving moral turpitude which the Board
reasonably believes has had or will have a material detrimental effect
on the Company's reputation or business or (iii) the failure, refusal
or neglect by Employee to substantially perform all of his obligations
to the Company after there has been delivered to Employee a written
demand for performance from the Company which describes the basis for
the Company's belief that Employee has not substantially performed his
duties and provides a 15 day cure period in connection therewith.
(b) Termination Without Cause. Employee and the Company
understand and acknowledge that Employee's employment with the Company
constitutes "at-will" employment. Therefore, Employee and the Company
acknowledge that, subject to the terms of this Agreement, including,
but not limited to Section 2(c) hereof, either the Company or Employee
may terminate the employment relationship at any time with or without
cause, by giving written notice to the other party.
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(c) Severance Payments and Other Benefits Upon Termination. If
the Company terminates Employee's employment without cause, or in the
event of an Involuntary Termination of the Employee, as hereinafter
defined, the Company (or its successor, as the case may be) shall pay
Employee the following: (i) any accrued but unpaid Base Salary and
vacation through the date of termination; (ii) a pro-ration with
respect to any bonus to which he would otherwise be entitled pursuant
to any bonus or incentive compensation plan (or other arrangement
pursuant to which bonuses are awarded to employees on a formula basis)
adopted by the Board of Directors; (iii) reimbursement for any
expenses through the date of termination; (iv) the unvested portion,
if any, of the stock options granted by the Company to Employee shall
be subject to the acceleration provisions set forth in the stock
option agreement applicable thereto; and (v) a severance payment in an
amount equal to Employee's then current six month Base Salary, payable
over a period of six (6) months following the effective date of such
Involuntary Termination , subject to withholding as may be required by
law. For purposes of this Agreement, "Involuntary Termination" shall
mean termination of Employee's employment with the Company immediately
following any of the following: (1) a reduction by the Company of
Employee's Base Salary as in effect immediately prior to such
reduction; (2) a material reduction by the Company in the kind or
level of employee benefits to which Employee is entitled immediately
prior to such reduction that is not generally applicable to all
executive level employees of Company; (3) a material reduction by the
Company of Employee's duties and responsibilities, including any
change in job title; (4) Employee's voluntary resignation following a
Change of Control, as hereinafter defined, in which Employee is not
offered a position of comparable pay and responsibilities in the same
geographic area in which he worked immediately prior to the Change of
Control, or is required to report to anyone other than the Company's
Board of Directors; (5) Employee's voluntary resignation after
submitting a written proposal to the Board, which is prepared in good
faith and is a reasonable exercise of business judgment, outlining his
recommendations for the future and direction of the Company which is
then rejected by the Board; or (6) the continued breach by the Company
of its material obligations hereunder following 30 days' prior written
notice thereof by the Employee.
For purposes of this Agreement, "Change of Control" means (i) a
merger or consolidation or other reorganization or transaction (but
excluding the recapitalization and reorganization of Company
contemplated by the Merger and/or the Merger Agreement) in which
securities possessing more than 75% of the total combined voting power
of the Company's outstanding voting securities are transferred or
issued to a person or persons different from the persons holding those
securities immediately prior to such transaction, or (ii) the sale,
transfer or other disposition of all or substantially all of the
Company's assets.
3. BENEFITS
(a) Executive Benefits. Employee shall be eligible to participate
in the employee benefit plans currently and hereafter maintained by
the Company of general applicability to other senior executives of the
Company. The benefits received by Employee under any such benefit plan
shall be at least commensurate with those received by any other
employee of the Company or any of its subsidiaries.
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(b) Stock Options. Effective as of the Effective Date, the
Company shall grant Employee a stock option (the "Option") consisting
of 250,000 shares of the Company's Common Stock at an exercise price
equal to the fair market value thereof on the date of grant. The
Option shall vest immediately as to 50,000 Option Shares and the
remainder thereof (consisting of an option to purchase 200,000 Option
Shares) shall vest ratably on a monthly basis as of the last day of
each of the first 36 months following the date of grant, such that
1/36th of the Option will vest on the one-month anniversary of the
Effective Date and the Option shall be fully vested on the third
anniversary of the Effective Date, subject to Employee continuing to
render services to the Company. In addition, the Option shall be
subject to acceleration upon the occurrence of certain events,
including if Employee is terminated by the Company without cause
(which shall result in acceleration of 50% of Employee's then unvested
options), if Employee is subject to an Involuntary Termination (which
shall result in acceleration of 50% of Employee's then unvested
options), or due to a Change of Control, as defined above (which shall
result in acceleration of 100% of Employee's then unvested options),
all as set forth in greater detail in the stock option agreement by
and between Employee and the Company (the "Stock Option Agreement"),
which agreement shall be substantially in the form of Exhibit A hereto
and is incorporated by this reference as if fully set forth herein. In
the event that Employee elects to terminate his employment with
Company without cause, or if Company terminates Employee "for cause"
pursuant to and as defined in Section 2(a) above, the Option shall
immediately terminate, and Employee shall be entitled to exercise the
portion of the Option that was vested on the date of termination only
for such period of time as is provided in the Company's Stock Option
Plan and reflected in the Stock Option Agreement. In all other
respects, the Option shall be subject to the terms, definitions and
provisions of the Company's Stock Option Plan and the Stock Option
Agreement.
(c) Vacation, Etc. Employee shall be entitled to vacation time
and sick leave during each calendar year during the term of this
Agreement, in such amounts as are at least equal to the amounts
provided to any other employee of the Company or any of its
subsidiaries, without loss of compensation, in addition to statutory
holidays normally observed by Company in accordance with Company's
vacation and holiday policy adopted from time to time by Company.
(d) Expenses. The Company will pay or reimburse Employee for
reasonable travel, entertainment or other expenses incurred by
Employee in the furtherance of or in connection with the performance
of Employee's duties hereunder in accordance with the Company's
established policies.
(e) Perquisites. Employee shall be entitled, during the Term, to
a car allowance in the amount of $300 per month.
All compensation payable to Employee hereunder shall be subject
to such deductions and withholdings as Company is from time to time
required to make pursuant to any federal, state or local law,
governmental regulation or order.
4. OFFICE LOCATION/SUPPORT. The Company will provide Employee
with the office space, support staff, and equipment that Employee
needs in order to perform his job duties herein. The location of the
office (to be in the Five Boroughs of NYC, Nassau, Suffolk or
Westchester).
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5. REPRESENTATION AND WARRANTIES. Employee represents and
warrants to Company that: (i) Employee is under no contractual or
other restriction or obligation that is materially inconsistent with
the execution of this Agreement, the performance of his duties
hereunder, or the rights of Company hereunder, including, without
limitation, any development agreement, non-competition agreement or
confidentiality agreement previously entered into by Employee, and
(ii) Employee is under no physical, mental or other disability that
would substantially hinder or prevent the performance of his duties
under this Agreement.
6. CERTAIN COVENANTS.
(a) Intellectual Property Rights.
(i) Employee agrees that the Company will be the sole owner
of any and all of Employee's "Discoveries" and "Work Product,"
hereinafter defined, made during the term of his employment with
the Company, whether pursuant to this Agreement or otherwise. For
purposes of this Agreement, "Discoveries" means all inventions,
discoveries, improvements, and copyrightable works (including,
without limitation, any information relating to the Company's
software products, source code, know-how, processes, designs,
algorithms, computer programs and routines, formulae, techniques,
developments or experimental work, work-in-progress, or business
trade secrets) made or conceived or reduced to practice by
Employee during the term of his employment by the Company,
whether or not potentially patentable or copyrightable in the
United States or elsewhere. For purposes of this Agreement, "Work
Product" means any and all work product relating to Discoveries.
(ii) Employee shall promptly disclose to the Company all
Discoveries and Work Product. All such disclosures must include
complete and accurate copies of all source code, object code or
machine-readable copies, documentation, work notes, flow-charts,
diagrams, test data, reports, samples, and other tangible
evidence or results (collectively, "Tangible Embodiments") of
such Discoveries or Work Product. All Tangible Embodiments of any
Discoveries or Work Project will be deemed to have been assigned
to the Company as a result of the act of expressing any Discovery
or Work Product therein.
(iii) Employee hereby assigns and agrees to assign to the
Company all of his interest in any country in any and all
Discoveries and Work Product, whether such interest arises under
patent law, copyright law, trade-secret law, semiconductor chip
protection law, or otherwise. Without limiting the generality of
the preceding sentence, Employee hereby authorizes the Company to
make any desired changes to any part of any Discovery or Work
Product, to combine it with other materials in any manner
desired, and to withhold Employee's identity in connection with
any distribution or use thereof alone or in combination with
other materials. This assignment and assignment obligation
applies to all Discoveries and Work Product arising during
Employee's employment with the Company (or its predecessors),
whether pursuant to this Agreement or otherwise. Employee's
agreement to assign to the Company any of his rights as set forth
in this Section 6(a)(iii) shall not apply to any invention, where
no equipment, supplies, facility or trade secret information of
the Company was used and that was developed entirely upon
Employee's own time, and (i) that does not relate to Company
business or to the Company's actual or anticipated research or
development, or (ii) that does not result from any work performed
by Employee for the Company.
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(iv) At the request of the Company, Employee shall promptly
and without additional compensation execute any and all patent
applications, copyright registration applications, waivers of
moral rights, assignments, or other instruments that the Company
deems necessary or appropriate to apply for or obtain Letters
Patent of the United States or any foreign country, copyright
registrations or otherwise to protect the Company's interest in
such Discovery and Work Product, the expenses for which will be
borne by the Company. Employee hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents
as his agents and attorneys-in-fact to, if the Company is unable
for any reason to secure Employee's signature to any lawful and
necessary document required or appropriate to apply for or
execute any patent application, copyright registration
application, waiver of moral rights, or other similar document
with respect to any Discovery and Work Product (including,
without limitation, renewals, extensions, continuations,
divisions, or continuations in part), (i) act for and in his
behalf, (ii) execute and file any such document, and (iii) do all
other lawfully permitted acts to further the prosecution of the
same legal force and effect as if executed by him; this
designation and appointment constitutes an irrevocable power of
attorney coupled with an interest.
(v) To the extent that any Discovery or Work Product
constitutes copyrightable or similar subject matter that is
eligible to be treated as a "work made for hire" or as having
similar status in the United States or elsewhere, it will be so
deemed. This provision does not alter or limit Employee's other
obligations to assign intellectual property rights under this
Agreement.
(vi) The obligations of Employee set forth in this Section 6
(including, without limitation, the assignment obligations) will
continue beyond the termination of Employee's employment with
respect to Discoveries and Work Product conceived or made by
Employee alone or in concert with others during Employee's
employment with the Company, whether pursuant to this Agreement
or otherwise. Those obligations will be binding upon Employee,
his assignees permitted under this Agreement, executors,
administrators, and other representatives.
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(b) Exposure to Proprietary Information.
(i) As used in this Agreement, "Proprietary Information"
means all information of a business or technical nature that
relates to the Company including, without limitation, all
information about software products whether currently released or
in development, all inventions, discoveries, improvements,
copyrightable work, source code, know-how, processes, designs,
algorithms, computer programs and routines, formulae and
techniques, and any information regarding the business of any
customer or supplier of the Company or any other information that
the Company is required to keep confidential. Notwithstanding the
preceding sentence, the term "Proprietary Information" does not
include information that is or becomes publicly available through
no fault of Employee, or information that Employee learned prior
to the Effective Date.
(ii) In recognition of the special nature of his employment
under this Agreement, including his special access to the
Proprietary Information, and in consideration of his employment
pursuant to this Agreement, Employee agrees to the covenants and
restrictions set forth in Section 6 of this Agreement.
(c) Use of Proprietary Information; Restrictive Covenants.
(i) Employee acknowledges that the Proprietary Information
constitutes a protectible business interest of the Company, and
covenants and agrees that during the term of his employment,
whether under this Agreement or otherwise, and after the
termination of such employment, he will not, directly or
indirectly, disclose, furnish, make available or utilize any of
the Proprietary Information, other than in the proper performance
of his duties for the Company.
(ii) Employee will not, during the term of this Agreement
or, solely with respect to clauses 2 and 3 of this subparagraph
(ii), for a period of one year thereafter (the "Restricted
Period"), anywhere within the United States (the "Restricted
Territory"), directly or indirectly (whether as an owner,
partner, shareholder, agent, officer, director, employee,
independent contractor, consultant, or otherwise):
1. perform services for, or engage in, any business
that develops or sells products or services which are
competitive with any products or services sold or developed
by the Company for which Employee has provided any
assistance in planning, development, marketing, training,
support, or maintenance during the period of Employee's
employment with the Company (the "Products");
2. except on behalf of the Company, solicit any person
or entity who is, or was at any time during the twelve-month
period immediately prior to the termination of Employee's
employment with the Company, a customer of the Company for
the sale of the Products or any product or service of a type
then sold by the Company for which Employee provided any
direct, material assistance in planning, development,
marketing, training, support, or maintenance; or
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3. solicit for employment any person who is, or was at
any time during the twelve-month period immediately prior to
the termination of Employee's employment with the Company,
an employee of the Company.
(d) Scope/Severability. The parties acknowledge that the business of
the Company is and will be national and international in scope and thus the
covenants in this Section 6 would be particularly ineffective if the
covenants were to be limited to a particular geographic area of the United
States. If any court of competent jurisdiction at any time deems the
Restricted Period unreasonably lengthy, or the Restricted Territory
unreasonably extensive, or any of the covenants set forth in this Section 6
not fully enforceable, the other provisions of this Section 6, and this
Agreement in general, will nevertheless stand and to the full extent
consistent with law continue in full force and effect, and it is the
intention and desire of the parties that the court treat any provisions of
this Agreement which are not fully enforceable as having been modified to
the extent deemed necessary by the court to render them reasonable and
enforceable and that the court enforce them to such extent (for example,
that the Restricted Period be deemed to be the longest period permissible
by law, but not in excess of the length provided for in Section 6(c), and
the Restricted Territory be deemed to comprise the largest territory
permissible by law under the circumstances).
(e) Return of Company Materials upon Termination. Employee
acknowledges that all records, documents, and Tangible Embodiments
containing or of Proprietary Information prepared by Employee or coming
into his possession by virtue of his employment by the Company are and will
remain the property of the Company. Upon termination of his employment with
the Company, Employee shall immediately return to the Company all such
items in his possession and all copies of such items.
7. EQUITABLE REMEDIES.
(a) Employee acknowledges and agrees that the agreements and covenants
set forth in Sections 6(a), (b), (c), (d) and (e) are reasonable and
necessary for the protection of the Company's business interests, that
irreparable injury will result to the Company if Employee breaches any of
the terms of said covenants, and that in the event of Employee's actual or
threatened breach of any such covenants, the Company will have no adequate
remedy at law. Employee accordingly agrees that, in the event of any actual
or threatened breach by him of any of said covenants, the Company will be
entitled to immediate injunctive and other equitable relief, without bond
and without the necessity of showing actual monetary damages. Nothing in
this Section 7 will be construed as prohibiting the Company from pursuing
any other remedies available to it for such breach or threatened breach,
including the recovery of any damages that it is able to prove.
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(b) Each of the covenants in Sections 6(a), (b), (c), (d) and (e) will
be construed as independent of any other covenants or other provisions of
this Agreement.
(c) In the event of any judicial determination that any of the
covenants in Sections 6(a), (b), (c), (d), and (e) are not fully
enforceable, it is the intention and desire of the parties that the court
treat said covenants as having been modified to the extent deemed necessary
by the court to render them reasonable and enforceable, and that the court
enforce them to such extent.
8. MISCELLANEOUS.
(a) Modification; Prior Claims. This Agreement and the Stock Option
Agreement set forth the entire understanding and agreement of the parties
with respect to the subject matter hereof, supersede all existing
agreements, arrangements or understandings, whether oral or written,
between them concerning such subject matter, and may be modified only by a
written instrument duly executed by each party. Except as otherwise
specifically provided for in this Agreement, Employee hereby agrees and
acknowledges that any and all compensation, reimbursement or other
obligations or liabilities of Company due to Employee prior to the
effective date of this Agreement have been received and satisfied in full
by Company and Employee hereby waives and releases any claims which he may
have relating thereto or resulting therefrom.
(b) Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties and their respective successors and assigns;
provided, however, that this Agreement may not be assigned by Employee, nor
may any of Employee's duties hereunder be delegated, without the prior
written consent of Company, which consent may be given or withheld by
Company in its sole discretion. The rights of Company under this Agreement
may not be assigned without the consent of Employee, which consent may be
given or withheld by Employee in his sole discretion.
(c) Excise Tax. If any payments or transfers of property to be made to
Employee hereunder are subject, in whole or in part, to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986 (the "Excise
Tax"), and application of Section 280G of the Code can be avoided by an
appropriate shareholder vote pursuant to Section 280G(b)(5)(A) of the Code,
the Company and Employee agree that they will respectively take all
reasonable steps necessary or appropriate to obtain a favorable shareholder
vote to ensure that the Excise Tax and the provisions of Section 280G are
not applicable with respect to such compensation.
(d) Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to (i) Sections 5 and 6 hereof by
Employee and (ii) Section 2(c) hereof by Company shall survive the
termination of this Agreement and Employee's employment with Company.
(e) Third Party Beneficiaries. Except as expressly provided herein
with respect to successors and assigns of the parties, this Agreement does
not create, and shall not be construed as creating, any rights enforceable
by any person or entity not a party to this Agreement.
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(f) Waiver. The failure of either party hereto at any time to enforce
performance by the other party of any provision of this Agreement shall in
no way affect such party's rights thereafter to enforce the same, nor shall
the waiver by either party of any breach of any provision hereof be deemed
to be a waiver by such party of any other breach of the same or any other
provision hereof.
(g) Section Headings. The headings of the several sections in this
Agreement are inserted solely for the convenience of the parties and are
not a part of and are not intended to govern, limit or aid in the
construction of any term or provision hereof.
(h) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing, served personally on,
or mailed by certified or registered mail to, the party to be charged with
receipt thereof. Notices and other communications served by mail shall be
deemed given hereunder three (3) calendar days after deposit of such notice
of communication in the United States mail as certified or registered mail,
with postage prepaid and duly addressed to whom such notice or
communications is to be given, in the case of (i) Company: CRITICAL HOME
CARE, INC., 000 Xxxxx Xxxxxx, Xxxxxxxx, XX 00000 or (ii) Employee: XXXX
XXXXXXXX, 000 Xxxxxxx Xxxxxx, Xxxx Xxxxxx, XX 00000. Any party may change
said party's address for purposes of giving notices under this Section by
giving to the other party a written notice of such change in the manner
provided in this Section.
(i) Severability. All sections, clauses thereof and covenants
contained in this Agreement are severable, and in the event any of them
shall be held to be invalid by any court, this Agreement shall be
interpreted as if such invalid sections, clauses or covenants were not
contained herein.
(j) Applicable Law. This Agreement is made with reference to the laws
of this State of New York, and shall be governed by and construed in
accordance therewith. Any legal action, suit or proceeding brought by
either party to enforce or interpret any term or provision of this
Agreement shall be brought in the appropriate state or federal court
located in Nassau, New York. The prevailing party in any such legal action,
suit or proceeding shall be entitled to have and recover from the losing
party such prevailing party's attorneys' fees and costs incurred in
connection therewith.
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(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and have made it effective as of the Effective Date of this
Agreement.
COMPANY:
CRITICAL HOME CARE, INC., a
Nevada Corporation
By: ___________________
Xxxxx Xxxxxx, CEO
EMPLOYEE:
________________________
XXXX XXXXXXXX
INCENTIVE STOCK OPTION AGREEMENT
AGREEMENT, made as of this 10th day of March 2003, by and between Critical
Home Care, Inc., a Nevada corporation having its principal executive offices at
000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Grantor"), and Xxxx Xxxxxxxx,
an individual residing at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxx 00000
("Optionee").
W I T N E S S E T H:
WHEREAS, Optionee is an employee and executive officer of the Grantor; and
WHEREAS, Grantor desires that Optionee exert his utmost efforts to improve
the business and increase the assets of the Grantor.
NOW, THEREFORE, in consideration of the Optionee's service as an employee
of the Grantor, the Grantor hereby grants the Optionee an option (the "Option")
to purchase shares of the Grantor's common stock, $.25 par value per share (the
"Common Stock"), upon the following terms and conditions:
1. OPTIONS.
Subject to Paragraph 3 below, the Grantor hereby grants to the Optionee an
incentive stock option intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), to purchase, until 5:00 P.M. New
York City time on March 9, 2008, unless earlier terminated hereunder
("Termination Date"), up to an aggregate of 250,000 fully paid and
non-assessable shares of Common Stock.
2. PURCHASE PRICE.
The purchase price ("Purchase Price") shall be $0.17 per share for the
250,000 shares. The Grantor shall pay all original issue or transfer taxes on
the exercise of the Options and all other fees and expenses necessarily incurred
by the Grantor in connection therewith.
3. EXERCISE OF OPTION.
(a) The Optionee shall notify the Grantor by hand delivery or by
registered or certified mail, return receipt requested, addressed to its
principal office (Attn: President), as to the number of shares of Common
Stock which Optionee desires to purchase pursuant to the exercise of the
Option herein granted, which notice shall be accompanied by (i) a certified
or bank check payable to the order of the Grantor in an amount equal to the
Purchase Price multiplied by the number of shares of Grantor's Common Stock
for which this Option is being exercised, or (ii) the delivery of shares of
Grantor's Common Stock having a fair market value equal to the Purchase
Price multiplied by the number of shares of Grantor's Common Stock for
which this Option is being exercised. To the extent allowed by applicable
federal and state securities laws, the Purchase Price may also be paid in
full by a broker-dealer to whom the Optionee has submitted an exercise
notice consisting of a fully-endorsed Exercise of Option in form
satisfactory to Grantor ("Cashless Exercise"). As soon as practicable
thereafter, the Grantor shall cause to be delivered to the Optionee (or
broker-dealer in the event of a Cashless Exercise) certificates issued in
the Optionee's name (or name designated by the broker-dealer in the event
of a Cashless Exercise) evidencing the net shares of Common Stock purchased
by the Optionee.
(b) The Option granted hereunder becomes vested and may be exercised
as follows: 50,000 options to purchase 50,000 shares shall vest immediately
and terminate on the Termination Date. The remainder thereof (consisting of
an option to purchase 200,000 shares) shall vest ratably on a monthly basis
as of the last day of each of the first 36 months following the date of
grant, such that 1/36th of the remaining 200,000 options will vest after
the first month anniversary of this Agreement and the option shall be fully
vested by the last day of month following the third anniversary of this
agreement.
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4. OPTION CONDITIONED ON CONTINUED SERVICE.
(a) If the Optionee shall be removed as an employee for cause, or if
Optionee resigns voluntarily, the option granted to Optionee hereunder
shall expire immediately upon termination. If Optionee shall be removed as
an employee without cause or if Optionee is subject to an involuntary
termination, 50% of the remaining unvested options shall vest immediately
and shall remain exercisable until the end of the term hereof. If there is
a Change of Control of the Grantor, then all remaining unvested options
shall vest immediately and shall remain exercisable until the end of the
term hereof. For purposes of this Agreement, "Change of Control" means (i)
a merger or consolidation or other reorganization or transaction in which
securities possessing more than 75% of the total combined voting power of
the Grantor's outstanding voting securities are transferred or issued to a
person or persons different from the persons holding those securities
immediately prior to such transaction, or (ii) the sale, transfer or other
disposition of all or substantially all of the Grantor's assets.
(b) If the Optionee dies while serving as an employee for the Grantor,
the Option may be exercised by a legatee or legatees of such Option under
such Optionee's last will or by his personal representatives or
distributees at any time within one year after his death, subject to the
provisions of subparagraph (d) of this Paragraph 4.
(c) If the Optionee becomes disabled within the definition of Section
22(e)(3) of the Code while serving as an employee, such Options may,
subject to the provisions of subparagraph (d) of this Paragraph 4, be
exercised at any time within one year after Optionee's termination of
service due to the disability.
(d) An Option may not be exercised pursuant to this Paragraph 4 except
to the extent that the Optionee was entitled to exercise the Option at the
time of termination of service or death pursuant to Paragraph 4, and in any
event may not be exercised after the original expiration date of the
Option.
5. DIVISIBILITY AND ASSIGNABILITY OF THE OPTIONS.
(a) The Optionee may exercise the Option herein granted from time to
time subject to the provisions above with respect to any whole number of
shares included therein, but in no event may an Option be exercised as to
less than one hundred (100) shares at any one time, or the remaining shares
covered by the Option if less than one hundred (100).
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(b) Except as specifically provided herein, the Optionee may not give,
grant, sell, exchange, transfer legal title, pledge, assign or otherwise
encumber or dispose of the Option herein granted or any interest therein,
otherwise than by will or the laws of descent and distribution, and the
Option herein granted, or any of them, shall be exercisable during the
Optionee's lifetime only by the Optionee.
6. STOCK AS INVESTMENT.
By accepting the Option herein granted, the Optionee agrees for himself,
his heirs and legatees that any and all shares of Common Stock purchased
hereunder shall be acquired for investment purposes only and not for sale or
distribution, and upon the issuance of any or all of the shares of Common Stock
issuable under the Option, the Optionee, or his heirs or legatees receiving such
shares of Common Stock, shall deliver to the Grantor a representation in
writing, that such shares of Common Stock are being acquired in good faith for
investment purposes only and not for sale or distribution. Grantor may place a
"stop transfer" order with respect to such shares of Common Stock with its
transfer agent and place an appropriate restrictive legend on the stock
certificate evidencing such shares of Common Stock.
7. RESTRICTION ON ISSUANCE OF SHARES.
The Grantor shall not be required to issue or deliver any certificate for
shares of its Common Stock purchased upon the exercise of the Option unless (a)
the issuance of such shares has been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or counsel to the
Grantor shall have given an opinion that such registration is not required; (b)
approval, to the extent required, shall have been obtained from any state
regulatory body having jurisdiction thereof, and (c) permission for the listing
of such shares shall have been given by any national securities exchange on
which the Common Stock of the Grantor is at the time of issuance listed.
8. ADJUSTMENT ON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Common Stock of the
Grantor by reason of stock dividends, stock splits, recapitalizations,
reclassifications, combinations and exchanges of shares, the number of
shares of Common Stock as to which the Option may be exercised shall be
correspondingly adjusted by the Grantor, and the Purchase Price shall be
adjusted so that the product of the Purchase Price immediately after such
event multiplied by the number of options subject to this Agreement
immediately after such event shall be equal to the product of the Purchase
Price multiplied by the number of shares subject to this Agreement
immediately prior to the occurrence of such event. No adjustment shall be
made with respect to stock dividends or splits which do not exceed 5% in
any fiscal year, cash dividends or the issuance to stockholders of the
Grantor of rights to subscribe for additional shares of Common Stock or
other securities. Anything to the contrary contained herein
notwithstanding, the Board of Directors of the Grantor shall have the
discretionary power to take any action necessary or appropriate to prevent
the Option from being disqualified as an "Incentive Stock Option" under the
United States Income Tax laws then in effect.
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(b) In the event of any consolidation or merger of the Grantor with or
into another company, or the conveyance of all or substantially all of the
assets of the Grantor to another company for solely stock and/or
securities, each then unexercised Option granted hereunder shall upon
exercise thereafter entitle the holder thereof to such number of shares of
Common Stock or other securities or property to which a holder of shares of
Common Stock of the Grantor would have been entitled to upon such
consolidation, merger or conveyance; and in any such case appropriate
adjustment, as determined by the Board of Directors of the Grantor (or
successor entity) shall be made as set forth above with respect to any
future changes in the capitalization of the Grantor or its successor
entity. In the event of the proposed dissolution or liquidation of the
Grantor, or, except as provided in (d) below, the sale of substantially all
the assets of the Grantor for other than stock/and or securities, all
unexercised Options granted hereunder will automatically terminate, unless
otherwise provided by the Board of Directors of the Grantor or any
authorized committee thereof.
(c) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of a share of Common Stock would result from any
such adjustment, the adjustment shall be revised to the next higher whole
number of shares of Common Stock so long as such increase does not result
in the holder of the Option being deemed to own more than 5% of the total
combined voting power or value of all classes of shares of capital stock of
the Grantor or subsidiaries.
(d) If any unexercised option is not terminated pursuant to
subparagraph (b) above, any option granted under the Plan may, at the
discretion of the Board of Directors of the Grantor and said other
corporation, be exchanged for options to purchase shares of capital stock
of another corporation which the Grantor and/or a subsidiary thereof is
merged into, consolidated with, or all or a substantial portion of the
property or stock of which is acquired by or separated or reorganized into.
The terms, provisions and benefits to the Optionee of such substitute
option(s) shall in all respects be identical to the terms, provisions and
benefits of Optionee under this Option prior to said substitution. To the
extent the above may be inconsistent with Sections 424(a)(1) and (2) of the
Code, the above shall be deemed interpreted so as to comply therewith.
9. NO RIGHTS IN OPTION STOCK.
Optionee shall have no rights as a shareholder in respect of shares of
Common Stock as to which the Option granted hereunder shall not have been
exercised and payment made as herein provided.
10. BINDING EFFECT.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors
legal representatives and assigns.
11. AGREEMENT SUBJECT TO PLAN.
Notwithstanding anything contained herein to the contrary, this Agreement
is subject to, and shall be construed in accordance with, the terms of the
Grantor's 2002 Employee Stock Option Plan, as amended (the "Plan"), and in the
event of any inconsistency between the terms hereof and the terms of the Plan,
the terms of the Plan shall govern.
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12. MISCELLANEOUS.
This Agreement shall be construed under the laws of the State of New York,
without application to the principles of conflicts of laws. Headings have been
included herein for convenience of reference only, and shall not be deemed a
part of the Agreement. References in this Agreement to the pronouns "him," "he"
and "his" are not intended to convey the masculine gender alone and are employed
in a generic sense and apply equally to the feminine gender or to an entity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
CRITICAL HOME CARE, INC.
By:
Name: Xxxxx Xxxxxx
Title: President
ACCEPTED AND AGREED TO:
By:
Xxxx Xxxxxxxx
Social Security Number
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EXERCISE OF OPTION
TO
PURCHASE SHARES
TO: Critical Home Care, Inc.
The undersigned hereby exercises the enclosed option for the purchase of
_________ shares of Common Stock according to the terms and conditions thereof
and herewith makes payment of $_________ representing the purchase price in
full. The undersigned is purchasing such shares for investment purposes only and
not with a view to the sale or distribution thereof.
Name (please print)
Signature
Social Security or
Taxpayer I.D. Number
