FORM OF STOCK OPTION AWARD AGREEMENT MEDICAL ACTION INDUSTRIES INC.
Exhibit 10.4
FORM OF
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
AGREEMENT made as of this ___ day of ___, ____ between MEDICAL ACTION INDUSTRIES INC., a Delaware corporation (hereinafter called the "Company"), and ___________, a non-employee Director of the Company (hereinafter called "Optionee").
WITNESSETH:
WHEREAS, the Company, for the purposes stated therein, has adopted a 1996 Non-Employee Directors Stock Option Plan, a copy of which is annexed hereto as Exhibit "A" (hereinafter called the "Plan"); and
WHEREAS, in accordance with said Plan the Board of Directors has determined that Optionee is eligible for and should be granted an option pursuant to said Plan as hereinbelow provided, and Optionee desires to have such option;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXERCISE OF OPTION. The Company hereby grants to Optionee an option to purchase a total of ___ shares of the authorized and unissued Common Stock of the Company, having a par value of $.001 per share, at the price of $___ per share, upon and subject to the following terms and conditions:
(a) The within option may be exercised only before the expiration of ten
(10) years from the date of this Agreement, and except as set forth below, such options shall be exercisable in whole or in part at all times after the date of this Agreement. It being expressly understood and agreed that in the event the within option is not exercised on or before the expiration of ten (10) years from the date of this Agreement, as to any part or all of the shares which may be purchased under the option, the right to purchase such shares shall, upon the expiration of said ten (10) years, completely lapse.
(b) Each exercise of the within option shall be by delivery to the Company, at its then principal office (attention of the Secretary) of written notice stating the number of shares to be purchased and a date (not less than ten (10) business days after the date of the notice) on which the purchase is to be made, accompanied by payment in full of the option price of such shares. The option price shall be payable in United States dollars in cash or by certified check, bank draft, postal or express money order; provided, however, that in lieu of payment in full in cash, an Optionee may, with the approval of the Company's Board of Directors, exercise his option by tendering to the Company shares of the Company's Common Stock owned by him and having a fair market value (as determined in accordance with the Plan) equal to the cash exercise price (or the balance thereof) applicable to his option.
(c) In the event of each exercise of the within option, the Company shall deliver to the Optionee, personally or at such address as he may specify in the above-mentioned notice, on or before the purchase date stated in said notice, a certificate made out to the Optionee for the number of shares being purchased.
2. NON-TRANSFERABILITY OF OPTION. The option granted under this
Agreement shall not be transferred otherwise than by Will or the laws of descent and distribution, and during the lifetime of Optionee, it may be exercised only by the Optionee or Optionee's guardian or legal representative. Notwithstanding the above, options may be transferred pursuant to a qualified domestic relations order. No option granted under this Plan shall be subject to execution, attachment, pledge, hypothecation, or other process.
3. TERMINATION OF SERVICE AS ELIGIBLE DIRECTOR.
(a) Except as provided in subparagraphs (b) and (c) of this paragraph 3, all outstanding options held by Optionee shall be automatically cancelled upon Optionee's termination of service as a Non-Employee Director of the Company.
(b) Upon termination of Optionee's service as a Non-Employee Director by reason of his voluntary mid-term resignation, declining to stand for reelection (whether as a result of the Company's mandatory retirement program or otherwise), becoming an employee of the Company or a subsidiary thereof or become disabled (as defined in the Company's pension plan), all outstanding options held by Optionee on the date of such termination shall expire five (5) years form the date upon which Optionee ceases to be a Non-Employee Director.
(c) In the event of the death of Optionee (whether before or after termination of service as a Non-Employee Director), all outstanding options held by Optionee (and not previously cancelled or expired) on the date of such death shall be fully exercisable by Optionee's legal representative within one (1) year after the date of death (without regard to the expiration date of the option specified in subparagraph (b) above).
4. DILUTION AND OTHER ADJUSTMENTS. In the event that there is any change in the stock subject to the within option through merger, consolidation or reorganization, or in the event of any dividend in stock of the same class to holders of issued and outstanding stock of the same class, or the issuance to the holders of such stock of rights to subscribe to stock of the same class, or in the event of any split, combination or exchange of stock or other change in the capital structure of the Company, the Board of Directors of the Company shall make such adjustments in the within option as it may deem equitable to prevent dilution or enlargement of the rights granted to the Optionee hereunder, and such adjustments, when so made, shall be conclusive and binding on the parties to this Agreement; and provided, further, that nothing herein shall be construed as limiting or preventing the Company from exercising any right or power to make or enter into adjustments, reclassifications, reorganizations, or changes in its capital or business structure or to merge, consolidate or dissolve or to sell or transfer all or any part of its business or assets.
5. REQUIREMENTS BY LAW.
(a) If any law, regulation of the Securities and Exchange Commission, or any regulation of any other commission or agency having jurisdiction shall require the Company or the Optionee to take any action with respect to the shares of stock to be acquired upon the exercise of the within option, then the date upon which the Company shall deliver or cause to be delivered the certificate or certificates for the shares of stock shall be postponed until full compliance has been made with all such requirements of law or regulation.
(b) Neither the Optionee nor any person or persons referred to in Paragraph 3(c) above, as the case may be, shall be, or shall be deemed to be, a holder of any shares subject to the within option unless and until certificates for such shares are delivered to him or them in accordance with this Agreement, and no certificates may be delivered until the shares represented thereby are paid in full.
6. PURCHASE FOR INVESTMENT. The Optionee represents, on behalf of himself and the person or persons referred to in Paragraph 3(c) above, that any shares of the Company purchased pursuant to this Agreement will be acquired in good faith for investment and not for resale or distribution, and Optionee, on behalf of himself and said person or persons, agrees that each notice of the exercise of the within option shall contain or be accompanied by a representation in writing signed by him or said person or persons, as the case may be, in form satisfactory to the Company, that the shares of the Company to be purchased pursuant to such notice are being so acquired. The requirements of this Paragraph 6 may be waived by the Company if the Company shall have received an opinion of its counsel that such representation is not required.
7. BINDING EFFECT OF THE PLAN. Optionee represents that he has read and understands the Plan and agrees to be bound by all of the terms and conditions thereof.
IN WITNESS WHEREOF, the parties hereby have duly executed this Agreement as of the day and year first above written.
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, Optionee
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