EXHIBIT 10.24
APRIA HEALTHCARE GROUP INC.
NON-QUALIFIED
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made by and between APRIA
HEALTHCARE GROUP INC., a Delaware corporation (the "Corporation"), and XXXXXX X.
XXXXXX, an individual (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to an Employment Agreement (herein so called) dated May
5, 1998, between Employee and the Corporation, the Corporation has agreed to
grant the Employee the right and option to purchase 750,000 shares of the
Corporation's Common Stock, par value $0.001 per share (the "Common Stock") on
the terms and conditions described in the Employment Agreement;
WHEREAS, the Corporation has satisfied a portion of its
obligation to grant stock options to the Employee under the Employment Agreement
by granting the Employee a stock option (the "1997 Plan Option") to purchase all
or any part of 100,000 Shares of Common Stock pursuant to the Apria Healthcare
Group Inc. 1997 Stock Incentive Plan (the "1997 Plan"), effective as of the 5th
day of May, 1998 (the "Award Date");
WHEREAS, the Corporation has satisfied a further portion of its obligation
to grant stock options to the Employee under the Employment Agreement by
granting the Employee a stock option (the "1992 Plan Option") to purchase all or
any part of 200,000 shares of Common Stock pursuant to the Apria Healthcare
Group Inc. Amended and Restated 1992 Stock Incentive Plan (the "1992 Plan")
effective as of the Award Date;
WHEREAS, the Corporation has determined to satisfy the remainder of its
obligation to grant stock options to the Employee pursuant to the Employment
Agreement by granting the Employee an option under this Agreement to purchase
450,000 shares of Common Stock which are not to be issued under any stock
incentive plan; and
WHEREAS, the option evidenced hereby is not intended to constitute an
incentive stock option within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the 1997 Plan.
2. Grant of Option. This Agreement evidences the Corporation's grant
to the Employee of the right and option to purchase, on and subject to the
terms and conditions set forth in this Agreement and in the 1997 Plan, all
or any part of 450,000 shares of Common Stock (the "Shares") at the price
of $9.00 per Share (the "Option"), exercisable from time to time, subject
to the provisions of this Agreement and the 1997 Plan, prior to the close
of business on May 5, 2008 (the "Expiration Date"). It is the intent of the
Corporation that (i) the Option shall be a nonqualified stock option within
the meaning of Section 422 of the Code, and (ii) as more fully described in
Section 10 below, although the Option is not being issued under or pursuant
to any qualified stock incentive plan of the Corporation, for purposes of
administrative convenience it shall, to the extent applicable, be
administered and processed by the Corporation and the Employee as if it had
been issued under the 1997 Plan.
3. Exercisability of Option. The Option shall vest and be exercisable
(i) as to 75,000 Shares at any time from and after the Award Date; (ii) as
to 187,500 Shares on the first date subsequent to May 5, 1999 on which the
average Fair Market Value of the Common Stock during any period of 90
consecutive calendar days subsequent to the Award Date shall have been
greater than $14.00 per share; and (iii) as to 187,500 Shares on the first
date subsequent to November 5, 2000 on which the average Fair Market Value
of the Common Stock during any period of 90 consecutive calendar days
subsequent to the Award Date shall have been greater than $18.00 per share.
Notwithstanding the foregoing, any unvested portion of the Option shall
immediately vest and become exercisable (i) in the event a "Change of
Control" (as such term is defined in the Employment Agreement (herein so
called) between the Employee and the Corporation dated May 5, 1998) occurs
subsequent to January 1, 1999; (ii) in the event that the Employee's
employment is terminated prior to November 5, 2000 (a) by the Corporation
for any reason other than for "Cause" (as defined in the Employment
Agreement), or (b) by the Employee with "Good Reason" (as defined in the
Employment Agreement, but not including a termination for "Good Reason" as
defined in Section IV-D-3(b)-(iv) thereof if the Employee gives notice
terminating his employment prior to January 1, 1999); and (iii) on May 5,
2005, regardless of whether a "Change of Control" has occurred prior to
that date.
Except as provided in Section 6 below, once the Option becomes exercisable
with respect to a portion of the Shares, the Employee shall have the right
thereafter to purchase any of such exercisable Shares, in whole or in part,
from time to time; and such right shall continue until the Option
terminates or expires. The Option shall only be exercisable in respect
of whole Shares and fractional share interests shall be disregarded. The
Option may only be exercised as to at least 100 Shares, unless the number
purchased is the total number at the time available for purchase under the
Option.
4. Method of Exercise of Option. The Option shall be exercisable by
the delivery to the Secretary of the Corporation of a written notice
stating the number of Shares to be purchased pursuant to the Option and
accompanied by payment made in accordance with and in a form permitted by
Section 2.2 of the 1997 Plan for the full purchase price of the Shares to
be purchased, subject to such further limitations and rules or procedures
as the Committee may from time to time establish as to any non-cash
payment. Subject to the express approval of the Committee at the time of
exercise and applicable law, the purchase price may be paid in full or in
part by a note meeting the requirements of Section 1.9 of the 1997 Plan or
by shares of Common Stock already owned by the Employee; provided, however,
that any shares delivered which were initially acquired upon exercise of a
stock option or otherwise acquired from the Corporation must have been
owned by the Employee for at least six months before the date of exercise.
Shares used to satisfy the exercise price of the Option shall be valued at
their Fair Market Value on the date of exercise. In addition, the Employee
(or the Employee's Beneficiary or Personal Representative) shall furnish
any assurances and representations required pursuant to Section 6.4 of the
1997 Plan.
5. Continuance of Employment. Nothing contained herein or in the 1997
Plan shall confer upon the Employee any right with respect to the
continuation of employment by the Corporation or any Subsidiary or
interfere in any way with the right of the Corporation or of any Subsidiary
at any time to terminate such employment or to increase or decrease the
compensation of the Employee from the rate in existence at any time.
6. Effect of Termination of Employment or Death; Change in Subsidiary
Status. The Option and all other rights hereunder, to the extent not
exercised, shall terminate and become null and void at such time as the
Employee ceases to be employed by either the Corporation or any Subsidiary,
provided, however, that -------- (i) all vested portions of the Option
shall remain exercisable for a period of three years following any
termination of the Employee's employment other than for "Cause" (as defined
in the Employment Agreement), and (ii) if the Employee should die or become
permanently disabled (within the meaning of Code Section 22 (e)(3) or as
otherwise defined by the Committee) while employed by the Corporation or
any Subsidiary or during the three-year period described in clause (i)
above, then the Option may be exercised within a period of one year after
the date of such death or disability or, if later, at any time before the
end of such three-year period. Notwithstanding the foregoing, the Option
shall not be exercisable under any circumstances by anyone under this
Section 6, or otherwise, after the Expiration Date.
If the Employee is employed by an entity which ceases to be a Subsidiary,
such event shall be deemed for purposes of this Section 6 to be a
termination of the Employee's employment by the Corporation other than for
"Cause." Absence from work caused by military service or authorized sick
leave shall not be considered as a termination of employment for purposes
of this Section 6.
7. Adjustment; Termination of Option Upon Certain Events. The Option
is subject to adjustment pursuant to Section 6.2 of the 1997 Plan and, to
the extent permitted by Section 6.2(c) of the 1997 Plan, the Committee
retains the right to terminate (prior to the Expiration Date) the Option to
the extent not previously exercised.
8. Non-Transferability of Option. The Option and any other rights of
the Employee under this Agreement or the Plan are nontransferable as
provided in Section 1.8 of the 1997 Plan (subject to the limited exceptions
set forth therein).
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Corporation at its principal
executive offices, to the attention of the Secretary and to the Employee at
the address given beneath the Employee's signature hereto, or at such other
address as either party may hereafter designate in writing to the other.
Any such notice shall be deemed to have been duly given when personally
delivered or enclosed in a properly sealed envelope addressed as aforesaid,
registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Option is not being issued under the 1997 Plan. However,
the Option and all rights of Employee under this Agreement are subject to,
shall be administered under, and the Employee agrees to be bound by, all of
the terms and conditions of the provisions of the 1997 Plan (other than
those restricting the maximum number of shares which may be the subject of
the award of stock options to an individual in any one calendar year),
which 1997 Plan is incorporated herein by this reference, as if it had been
issued thereunder. In the event of a conflict or inconsistency between the
terms and conditions of this Agreement and the 1997 Plan, the terms and
conditions of the 1997 Plan shall govern. The Employee acknowledges receipt
of a copy of the 1997 Plan, and agrees to be bound by the terms thereof.
Unless otherwise expressly provided in other sections of this Agreement,
provisions of the 1997 Plan that confer discretionary authority on the
Committee (or the Board) do not (and shall not be deemed to) create any
rights in the Employee unless such rights are expressly set forth herein or
are otherwise in the sole discretion of the Committee (or the Board) so
conferred by appropriate action of the Committee (or the Board) under the
1997 Plan after the date hereof and evidenced in a writing authorized by
the Committee.
11. Compliance With Law. The Corporation shall use its best efforts to
register the Shares under the Securities Act of 1933 as soon as reasonably
possible following the date of the full and final execution hereof. The
Option and the issuance and delivery of Shares of Common Stock under the
Option are subject to compliance with all applicable federal and state
laws, rules and regulations (including but not limited to state and federal
securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Corporation, be necessary or advisable in connection
therewith. Any Shares of Common Stock delivered under the Option shall be
subject to such restrictions, and the Employee shall, if requested by the
Corporation, provide such assurances and representations to the Corporation
as the Corporation may deem necessary or desirable to assure compliance
with all applicable legal requirements.
12. Entire Agreement. This Agreement, the 1997 Plan, the 1997 Plan
Option and the 1992 Plan Option together constitute the entire agreement
and supersede all prior understandings and agreements, written or oral, of
the parties hereto with respect to the grant of options to acquire 750,000
shares of Common Stock contemplated by the Employment Agreement. The 1997
Plan and this Agreement may be amended pursuant to Section 6.6 of the 1997
Plan. Such amendment must be in writing and signed by the Corporation. The
Corporation may, however, unilaterally waive any provision hereof in
writing to the extent such waiver does not adversely affect the interests
of the Employee hereunder, but no such waiver shall operate or be construed
to be a subsequent waiver of the same provision or a waiver of any other
provision hereof.
13. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware without
regard to conflict of law principles thereunder.
14. Satisfaction of Requirements. The issuance by the Corporation of
this Agreement, together with the 1997 Plan Option and the 1992 Plan
Option, constitutes complete satisfaction of the obligations of the
Corporation under Section III (G) of the Employment Agreement.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Employee has
hereunto set his or her hand.
EMPLOYEE APRIA HEALTHCARE GROUP INC.
(a Delaware corporation)
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Signature
By:
Xxxxxx X. Xxxxxx ------------------------------
00000 Xxxxxxxx Xxxx., #000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Title:
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Date: Date:
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CONSENT OF SPOUSE
In consideration of the execution of the foregoing Stock Option Agreement
by Apria Healthcare Group Inc., I,____________________________, the spouse of
the Employee therein named, do hereby join with my spouse in executing the
foregoing Stock Option Agreement and do hereby agree to be bound by all of the
terms and provisions thereof and of the 1997 Plan.
DATED:
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Signature of Spouse
