NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of February 6, 1998 by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Xxxxxxx
Xxxxxx ("Optionee").
R E C I T A L
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, for services rendered by Optionee as a
consultant to the Company, and expenses incurred by Optionee in connection
with providing such consulting services, of a non-qualified stock option to
purchase the number of shares of Common Stock of the Company specified in
Paragraph 1 hereof, at the price specified therein, such option to be for the
term and upon the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and of the undertakings
of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the
Board of Directors, the Company hereby grants to Optionee, in consideration
of consulting services performed for the benefit of the Company, and expenses
incurred by Optionee in connection with providing such consulting services,
during the period from October 1, 1997 to December 31, 1997, related to the
location of strategic business partners for the Company and the expansion of
the dialysis facilities for the Company's business operations, the option
("Option") to purchase up to 100,000 shares ("Option Shares") of Common Stock
of the Company, at the exercise price of $0.40 per share.
2. TERM. This Option shall expire two (2) years from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. All 100,000 Options shall be
immediately exercisable and shall thereafter remain subject to exercise for
the term specified in Paragraph 2 hereof.
4. METHOD AND TIME OF EXERCISE. The Option may be exercised by
written notice delivered to the Company stating the number of shares with
respect to which the Option is being exercised, together with a check made
payable to the Company in the amount of the purchase price of such shares
plus the amount of applicable federal, state and local withholding taxes, and
the written statement provided for in Paragraph 10 hereof, if required by
such Paragraph 10; PROVIDED, HOWEVER, with respect to the 100,000 Options set
forth in paragraph 1 hereof, Optionee shall be entitled to pay the exercise
price against cancellation in full of certain indebtedness in the amounts of
$25,000 owing by the Company to Optionee for services rendered by Optionee as
a consultant to the Company which amounts shall only be payable to Optionee
by the exercise of such Options. Not less than 100 shares may be purchased
at any one time unless the number purchased is the total number purchasable
under such Option at the time. Only whole shares may be purchased.
5. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Company and
upon the request of the Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of shares of Common Stock
otherwise issuable to the Optionee upon the exercise of this Option.
6. EXERCISE ON TERMINATION OF EMPLOYMENT. This Option shall not
terminate as a result of the termination of Optionee's services as a
consultant to the Company.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except, if applicable, by will or by the laws of descent and distribution,
and may be exercised only by Optionee during Optionee's lifetime and after
Optionee's death, by Optionee's representative or by the person entitled
thereto under Optionee's will or the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock
certificates to him upon exercise of the Option. No adjustment will be made
for dividends or other rights for which the record date is prior to the date
such stock certificate or certificates are issued.
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9. NO RIGHT TO PERFORM SERVICES. Nothing in this Option shall confer
upon the Optionee any right to perform services for the Company, or shall
interfere with or restrict in any way the rights of the Company to discharge
or terminate Optionee as an independent contractor or consultant at any time
for any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees
that, upon Optionee's exercise of the Option in whole or part, unless there
is in effect at that time under the Securities Act of 1933 a registration
statement relating to the shares issued to him, he will acquire the shares
issuable upon exercise of this Option for the purpose of investment and not
with a view to their resale or further distribution, and that upon each
exercise thereof Optionee will furnish to the Company a written statement to
such effect, satisfactory to the Company in form and substance. Optionee
agrees that any certificates issued upon exercise of this Option may bear a
legend indicating that their transferability is restricted in accordance with
applicable state or federal securities law. Any person or persons entitled
to exercise this Option under the provisions of Paragraphs 5 and 6 hereof
shall, upon each exercise of the Option under circumstances in which Optionee
would be required to furnish such a written statement, also furnish to the
Company a written statement to the same effect, satisfactory to the Company
in form and substance.
11. REGISTRATION. On or before thirty days after the date of this
Agreement, the Company shall, at the Company's expense, use its best efforts
to file with the Securities and Exchange Commission ("SEC"), a registration
statement ("Registration Statement") on Form S-8 or other comparable form, in
such form as to comply with applicable federal and state laws for the
purpose of registering or qualifying the Option Shares for resale by
Optionee, and prepare and file with the appropriate state securities
regulatory authorities the documents reasonably necessary to register or
qualify such securities, subject to the ability of the Company to register or
qualify such securities under applicable state laws.
12. NOTICES. All notices to the Company shall be addressed to the
Company at the principal office of the Company at 0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Telecopier No. (213)
933-8836, and all notices to Optionee shall be addressed to Optionee at the
address and telecopier number of Optionee on file with the Company, or to
such other address and telecopier number as either may designate to the other
in writing. A notice shall be deemed to be duly given if and when enclosed
in a properly addressed sealed envelope deposited, postage prepaid, with the
United States Postal Service and followed by telecopier to the addressee. In
lieu of giving notice by mail as aforesaid, written notices under this
Agreement may be given by personal delivery to Optionee or to the Company (as
the case may be).
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13. ADJUSTMENTS. If there is any change in the capitalization of the
Company affecting in any manner the number or kind of outstanding shares of
Common Stock of the Company, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because the Company
has merged or consolidated with one or more other corporations (and provided
the Option does not thereby terminate pursuant to Section 2 hereof), then the
number and kind of shares then subject to the Option and the price to be paid
therefor shall be appropriately adjusted by the Board of Directors; PROVIDED,
HOWEVER, that in no event shall any such adjustment result in the Company's
being required to sell or issue any fractional shares. Any such adjustment
shall be made without change in the aggregate purchase price applicable to
the unexercised portion of the Option, but with an appropriate adjustment to
the price of each Share or other unit of security covered by this Option.
14. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other
provision of this Option, upon the dissolution or liquidation of the Company,
the reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or the sale of substantially all the assets of the Company or of
more than 50% of the then outstanding stock of the Company to another
corporation or other entity, the Option granted hereunder shall terminate;
provided, however, that: (i) each Option for which no option has been
tendered by the surviving corporation in accordance with all of the terms of
provision (ii) immediately below shall, within five days before the effective
date of such dissolution or liquidation, merger or consolidation or sale of
assets in which the Company is not the surviving corporation or sale of
stock, become fully exercisable; or (ii) in its sole and absolute discretion,
the surviving corporation may, but shall not be so obligated to, tender to
any Optionee, an option to purchase shares of the surviving corporation, and
such new option or options shall contain such terms and provisions as shall
be required substantially to preserve the rights and benefits of this Option.
15. INVALID PROVISIONS. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any
applicable law, such invalidity or unenforceability shall not be construed as
rendering any other provisions contained herein invalid or unenforceable, and
all such other provisions shall be given full force and effect to the same
extent as though the invalid or unenforceable provision were not contained
herein.
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16. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
17. COUNTERPARTS. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the
parties hereto and delivered to the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
NATIONAL QUALITY CARE, INC.
("Company")
By: /s/ Xxxxxx Xxxx, M.D.
--------------------------------
Xxxxxx Xxxx, M.D.,
Chief Executive Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
###-##-#### By: /s/ Xxxxxxx Xxxxxx
------------------- ----------------------------------
Xxxxxxx Xxxxxx
Address:
Xxxxxxx Xxxxxx
c/o Worldwide Corporate Finance
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Telecopier No. (000) 000-0000
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