EX.10.20
FORM OF SALES REPRESENTATIVE AWARD AGREEMENT UNDER THE
XXXXXX ACQUISITION HOLDINGS, INC. 1999 EQUITY INCENTIVE PLAN
THIS AGREEMENT, made as of ________________, 2000 (the
"Effective Date"), by and between Xxxxxx Acquisition Holdings, Inc., a Delaware
corporation ("WAH"), and ________________ (the "Participant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Participant is currently performing non-employee
services for Xxxxxx Medical Technology, Inc., a Delaware corporation and
wholly-owned subsidiary of WAH ("WMT" and, together with WAH and WAH's Related
Entities, the "Company"), related to the promotion and sales of orthopedic
implant devices manufactured by WMT, including related improvements and line
extensions, pursuant to that certain Distributor Agreement, dated as of
_________________, between WMT and _________________ (the "Distributor
Agreement"); and
WHEREAS, the Company desires to afford the Participant the
opportunity to acquire ownership of WAH's common stock, par value $.01 per share
("Common Stock"), so that the Participant may have a direct proprietary interest
in the Company's success.
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereby agree as follows:
1. GRANT OF OPTIONS. Subject to the terms and conditions set forth
herein and in the Xxxxxx Acquisition Holdings, Inc. 1999 Equity Incentive Plan,
a copy of which is attached hereto as Exhibit A (the "Plan"), on the Effective
Date the Company does hereby grant to the Participant, during the period
commencing on the Effective Date and ending on the 10th anniversary of the
Effective Date (the "Expiration Date"), the right and option (the right to
purchase any one share under this Agreement being an "Option") to purchase from
the Company ____________ shares of Common Stock. The Option to purchase such
Common Stock shall have an exercise price of $____________ per share. Each of
the Options granted pursuant to this Agreement shall constitute Nonqualified
Stock Options under the Plan.
2. LIMITATIONS ON EXERCISE OF OPTIONS. Subject to the terms and
conditions set forth herein and in the Plan, the Options shall vest and become
exercisable, on a cumulative basis, with respect to ____% of the shares on the
______ anniversary of the Effective Date and on each succeeding anniversary
thereafter so long as the Participant is engaged in the promotion and sales of
orthopedic implant devices and related products on behalf of the Company as
contemplated by the Distributor Agreement ("Service"). The Committee or the
Board may accelerate the vesting and exercisability of any or all of the
then-unvested Options at
any time.
3. NON-TRANSFERABLE. Except as specifically authorized by the
Committee, the Participant may not transfer the Options except by will or the
laws of descent and distribution and the Options shall be exercisable during the
Participant's lifetime only by the Participant or, in the event of his
incapacity, his guardian or legal representative. Except as so authorized, no
purported assignment or transfer of the Options, or of the rights represented
thereby, whether voluntary or involuntary, by operation of law or otherwise
(except by will or the laws of descent and distribution), shall vest in the
assignee or transferee any interest or right herein whatsoever.
4. TERMINATION OF SERVICE. (a) DISABILITY. If, prior to the
Expiration Date, the Participant's Service shall cease by reason of a
Disability, as defined in the Plan, or the Participant's Service
shall cease for any reason with the written consent of the Committee, then the
Options shall remain exercisable until the earlier of the Expiration Date or the
date that is thirty (30) days after the date of such cessation of Service, but
only to the extent the Options were vested and exercisable at the time of such
cessation of Service.
(b) WITHOUT CAUSE. If the Company terminates the Participant's
Service without Cause, then the Options shall remain exercisable until the
earlier of the Expiration Date or the date that is ninety (90) days after the
date of such cessation of Service.
(c) VOLUNTARY; FOR CAUSE. If the Participant's Service is
voluntarily terminated by the Participant for reasons other than Disability and
without the consent of the Committee or the Company terminates the Participant's
Service for Cause, then all of the Options, to the extent not exercised prior to
such termination, whether exercisable or not, shall lapse and be canceled
immediately upon such cessation of Service.
(d) DEATH. If the Participant's Service shall cease prior to
the Expiration Date by reason of death, or the Participant shall die while
entitled to exercise any of the Options pursuant to Section 4(a) or 4(b), the
executor or administrator of the estate of the Participant or the person or
persons to whom the Options shall have been validly transferred by the executor
or administrator pursuant to will or the laws of descent and distribution shall
have the right, until the earlier of the Expiration Date or one (1) year after
the date of death, to exercise the Options, but only to the extent that the
Participant was entitled to exercise them on the date of death and subject to
any other limitation contained herein on the exercise of the Options in effect
on the date of exercise.
(e) Whether Service has been or could have been terminated for
the purposes of this Agreement, and the reasons therefor, shall be
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determined by the Committee, whose determination shall be final, binding
and conclusive.
(f) Options that have not yet vested at the time of
termination of the Participant's Service shall expire and no further vesting
shall occur with respect thereto. After the expiration of any exercise period
described in this Section 4, the Options shall terminate together with all of
the Participant's rights hereunder, to the extent not previously exercised.
5. ADJUSTMENTS AND CORPORATE REORGANIZATIONS. In accordance with and
subject to the applicable terms of the Plan, the Options shall be subject to
adjustment or substitution, as determined by the Committee, as to the number,
price or kind of Stock or other consideration subject to such Options or as
otherwise determined by the Committee to be equitable (i) in the event of
changes in the outstanding Stock or in the capital structure of the Company by
reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
hereof or (ii) in the event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, the Participant. The
Company shall give the Participant written notice of an adjustment hereunder.
Notwithstanding anything herein to the contrary, in the event of any of the
following:
(a) The Company is merged or consolidated with another
corporation or entity and, in connection therewith, consideration is
received by shareholders of the Company in a form other than stock or
other equity interests of the surviving entity;
(b) All or substantially all of the assets of the Company
are acquired by another person;
(c) The Company's reorganization or liquidation; or
(d) The Company shall enter into a written agreement to
undergo an event described in clauses (a), (b) or (c) above,
then the Committee may, in its discretion and upon at least 10 days advance
notice to the affected persons, cancel any outstanding Options and pay to the
Participant, in cash, the value of such Options based upon the price per share
of Stock received or to be received by other shareholders of the Company in such
event and the per share exercise price of the Options.
6. EXERCISE: PAYMENT FOR AND DELIVERY OF COMMON STOCK. The
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Options shall be exercised by delivering written notice to the Committee stating
the number of shares of Common Stock to be purchased, the person or persons in
whose name the shares of Common Stock are to be registered and each such
person's address and social security number. Such notice shall not be effective
unless accompanied by the full purchase price for all shares to be purchased,
and any applicable withholding (as described below). The purchase price shall be
payable in cash, in shares of Common Stock, any combination of cash or shares of
Common Stock or any other method authorized by the Plan and consented to by the
Committee; PROVIDED, HOWEVER, that the Participant may use Common Stock in
payment of the exercise price only if the shares so used are considered "mature"
for purposes of generally accepted accounting principles (I.E., (i) been held by
the Participant free and clear for at least six (6) months prior to the use
thereof to pay part of an Option exercise price, (ii) been purchased by the
Participant in other than a compensatory transaction, or (iii) meet any other
requirements for "mature" shares as may exist on the date of the use thereof to
pay part of an Option exercise price). In the event that all or part of the
purchase price is paid in shares of Common Stock, the shares used in payment
shall be valued at their Fair Market Value on the date of exercise of the
Options. At the time of exercise, the Participant shall pay to the Company, in
cash, or by having the Company withhold upon exercise of the Option a sufficient
number of shares of Common Stock otherwise deliverable to the Participant based
on the Fair Market Value of the Common Stock on the date of exercise, at the
election of the Participant, such minimum amount as the Company deems necessary
to satisfy its obligation to withhold Federal, state or local income or other
taxes incurred by reason of the exercise or the transfer of shares thereupon.
Payment in currency or by certified or cashier's check shall be considered
payment in cash.
7. RESTRICTIVE COVENANTS; REPURCHASE RIGHTS. (a) By accepting
the Options, the Participant represents and agrees for himself and his
transferees (whether by will or the laws of descent and distribution) that:
(i) With respect to any State in which the Company is engaged
in business during the period for which the Participant is engaged to
provide Service and, for the one year period following such period of
Service, with respect to the territory of the Participant's Service
(such periods are hereinafter referred to as the "Restricted Period"),
the Participant shall not participate or engage, directly or
indirectly, for himself or on behalf of or in conjunction with any
person, partnership, corporation or other entity, whether as an
employee, agent, officer, director, shareholder, partner, joint
venturer, investor or otherwise, in any business activities if such
activity consists of any activity undertaken or expressly contemplated
to be undertaken by the Company or by the Participant at any time
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during the period of the Participant's Service.
(ii) Except with the Company's prior written approval or as
may otherwise be required by law or legal process, the Participant
shall not disclose any material or information which is confidential to
the Company and not in the public domain or generally known in the
industry, whether tangible or intangible, made available, disclosed or
otherwise known to the Participant as a result of the Participant's
Service.
(iii) During the Restrictive Period, the Participant shall not
attempt to influence, persuade or induce, or assist any other person in
so persuading or inducing, any employee of the Company to give up, or
to not commence, employment or a business relationship with the
Company.
(b) The Company shall have the right, and not the obligation,
to purchase and acquire from the Participant any or all of the shares of Common
Stock previously acquired by the Participant upon exercise of the Option (the
"Repurchased Shares") if the Committee reasonably determines that the
Participant has violated the covenants set forth in Section 7(a) or the
Participant's Service shall be terminated for Cause. The Company may exercise
the right granted to it under this Section 7(b) by delivering written notice to
the Participant stating that the Company is exercising the repurchase right
granted to it under this Section 7(b). The delivery of such notice by the
Company to the Participant shall constitute a binding commitment of the Company
to purchase and acquire all of the Repurchased Shares. The total purchase price
for the Repurchased Shares shall be delivered to the Participant against
delivery by the Participant of certificates evidencing the Repurchased Shares no
later than 30 days after the delivery of the election notice by the Company. The
price per share of the Repurchased Shares shall be the lesser of the Fair Market
Value of each of the Repurchased Shares on the date of the Company's delivery of
its written notice to the Participant or the exercise price of the Option.
(c) The Company shall have the right, and not the obligation,
to cancel any or all of the Participant's Options if the Committee reasonably
determines that the Participant has violated the covenants set forth in Section
7(a). The Company may exercise the right granted to it under this Section 7(c)
by delivering a written notice to the Participant stating that the Company is
exercising the cancellation right granted to it under this Section 7(c).
(d) Anything in this Section 7 to the contrary, the Company
shall not be obligated to purchase any Common Stock at any time to the extent
that the purchase would result in a
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violation of any law, statute, rule, regulation, order, writ, injunction, decree
or judgment promulgated or entered by any Federal, state, local or foreign court
or governmental authority applicable to the Company or any of its property.
8. RIGHTS AS STOCKHOLDER; REPRESENTATIONS. (a) The Participant or a
transferee of the Options shall have no rights as a stockholder with respect to
any shares covered by the Options until he shall have become the holder of
record of such shares (and the Company shall use its reasonable best efforts to
cause the Participant promptly to become the holder of record of such shares),
and, except as provided in Section 5 hereof, no adjustment shall be made for
dividends or distributions or other rights in respect of such shares for which
the record date is prior to the date upon which he shall become the holder or
record thereof.
(b) The Participant acknowledges and agrees that any Common
Stock acquired in respect of the Options granted under Section 2 shall be
"Shares" as such term is used in the Stockholders Agreement, dated as of
December 7, 1999, among WAH and certain "Investors" listed in Schedule I
thereto, and, as such, will be subject to certain restrictions, including
restrictions on resale and such other transfers. In the event of any conflict or
inconsistency between the terms and provisions of this Agreement and the
Stockholders Agreement, the Stockholders Agreement shall govern and control.
(c) By accepting the Options, the Participant represents and
warrants for himself and his transferees (whether by will or the laws of descent
and distribution) that:
(i) The sale and marketing of the Company's products by the
Participant are the Participant's primary trade or business; and
(ii) During the last calendar year the Participant derived,
and during the next calendar year the Participant expects to derive,
the majority of the Participant's earned income from the sales and
marketing of the Company's products.
9. COMPANY; PARTICIPANT. (a) The term "Company" as used in this
Agreement shall include the Company and its Related Entities, except to the
extent otherwise indicated by the context or usage.
(b) Whenever the word "Participant" is used in any provision
of this Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, legal representatives,
the person or persons to whom the Options may be transferred by will or by
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the laws of descent and distribution or any other transferee to whom the Options
may be transferred with the consent of the Committee, the word "Participant"
shall be deemed to include such person or persons.
10. REQUIREMENTS OF LAW. (a) By accepting the Options, the Participant
represents and agrees for himself and his transferees (whether by will or the
laws of descent and distribution) that, unless a registration statement under
the Securities Act of 1933, as amended (the "Act"), is in effect as to shares
purchased upon any exercise of the Options, (i) any and all shares so purchased
shall be acquired for his personal account and not with a view to or for sale in
connection with any distribution, and (ii) each notice of the exercise of any
portion of this Option shall be accompanied by a representation and warranty in
writing, signed by the person entitled to exercise the same, that the shares are
being so acquired in good faith for his personal account and not with a view to
or for sale in connection with any distribution.
(b) No certificate or certificates for shares of Common Stock
may be purchased, issued or transferred if the exercise hereof or the issuance
or transfer of such shares shall constitute a violation by the Company or the
Participant of any (i) provision of any Federal, state or other securities law,
(ii) requirement of any securities exchange listing agreement to which the
Company may be a party, or (iii) other requirement of law or of any regulatory
body having jurisdiction over the Company. Any reasonable determination in this
connection by the Board, upon notice given to the Participant, shall be final,
binding and conclusive.
(c) The certificates representing shares of Common Stock
acquired pursuant to the exercise of Options shall carry such appropriate
legend, and such written instructions shall be given to the Company's transfer
agent, as may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Act or any state securities laws.
11. NOTICES. Any notice to be given to either party shall be in writing
and shall be given by hand delivery to such party or by registered or certified
mail, return receipt requested, postage prepaid, addressed to the Company in
care of its Secretary at its principal office, and to the Participant at the
address given beneath his signature hereto, or at such other address as either
party shall have furnished to the other in writing in accordance herewith.
Notice and communications shall be effective when actually received by the
addressee.
12. BINDING EFFECt. This Agreement shall be binding upon the heirs,
executors, administrators, successors and permitted assigns of the
parties hereto.
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13. THE PLAN. The terms and provisions of the Plan are incorporated
herein by reference and made a part hereof as though fully set forth herein. In
the event of any conflict or inconsistency between discretionary terms and
provisions of this Agreement, this Agreement shall govern and control. In all
other instances of conflicts or inconsistencies or omissions, the terms and
provisions of the Plan shall govern and control. All capitalized terms not
otherwise expressly defined in this Agreement shall have the meaning ascribed to
them in the Plan.
14. GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.
15. ENTIRE AGREEMENT. This Agreement, together with the Plan, contains
the entire agreement and understanding between the parties with respect to
the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto.
IN WITNESS WHEREOF, the Company has granted this Option on the
date of grant specified above. This instrument may be executed in any number of
counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
XXXXXX ACQUISITION HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
ACCEPTED:
-----------------------
[Participant Name]
[Participant Address]
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