NONQUALIFIED STOCK OPTION AGREEMENT AWARDED UNDER ALLIED HEALTHCARE PRODUCTS, INC.
Exhibit
99.2
AWARDED
UNDER
ALLIED
HEALTHCARE PRODUCTS, INC.
2009
INCENTIVE STOCK PLAN
THIS AGREEMENT (the
“Agreement”) is made this 27th day of August, 2009, by and between Allied
Healthcare Products, Inc., a Delaware corporation (“Company”), and Xxxx Xxxxxxxx
(“Optionee”).
RECITALS
A. The
Board of Directors of the Company (the “Board of Directors”) has adopted the
Allied Healthcare Products, Inc. 2009 Incentive Stock Plan (the “Plan”) pursuant
to which options covering an aggregate of Six Hundred Thousand (600,000) shares
of the common stock of the Company, par value $0.01 per share (the “Common
Stock”), may be granted to certain key employees of the Company.
B. Subject
to stockholder approval of the Plan as set forth below, the Company desires to
grant to Optionee the option to purchase certain shares of the Common Stock
under the terms of the Plan.
C. Except
as otherwise defined in this Agreement, all capitalized terms shall have the
definitions set forth in the Plan.
NOW, THEREFORE, in
consideration of the premises, and of the mutual agreements hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each of the parties hereto, it is hereby
covenanted and agreed as follows:
1. Grant
Subject to Stockholder Approval. This Agreement is
conditioned upon approval of the Plan by the stockholders of the Company at the
2009 annual meeting of the Company’s stockholders. Notwithstanding
anything to the contrary set forth in this Agreement, in the event that the Plan
is not approved by the stockholders of the Company at such meeting, this
Agreement shall immediately and automatically, without any further action of the
parties hereto, become null and void and be of no further legal force or
effect. Optionee acknowledges that he will not be entitled to receive
any shares pursuant to this Agreement in the event that the stockholders of the
Company do not approve the Plan at such meeting.
2. Administration
of Grant. The option
granted pursuant to this Agreement is made under and is expressly subject to,
all terms and provisions of the Plan (which is hereby incorporated herein by
reference), except as specifically set forth in this Agreement. The
Company’s Board of Directors of Company has delegated the power to administer
the Plan and grant awards thereunder to the Committee referred to in Section 1
of the Plan (“Committee”).
3. Grant and
Terms of Option.
Pursuant to action of the Committee, which action was taken on the date
of this Agreement (“Date of Grant”), but subject to Section 1 of this Agreement,
the Company hereby grants to Optionee the option to purchase all or any part of
an aggregate of Three Hundred Twenty Thousand (320,000) shares of Common Stock,
for a period of six (6) years from the date hereof (subject to earlier
termination as provided in this Agreement), at the purchase price of Four and
25/100 Dollars ($4.25) per share (the “Base Price”), which is equal to the fair
market value of the Common Stock based upon the closing price of the Common
Stock on the date immediately prior to the date hereof. Such grant is
full-vested and exercisable (in whole or in part) as of the date hereof and
shall expire on the sixth (6th) anniversary of the date hereof (to the extent
not exercised) (the “Expiration Date”) unless otherwise earlier terminated
pursuant to the terms of this Agreement or the Plan. If the option
granted pursuant to this Agreement or a portion thereof is exercised by the
Optionee prior to the Expiration Date in accordance with the terms and
conditions of this Agreement, the aggregate Base Price to be paid upon such
exercise shall be payable in whole or in part by immediately available funds (by
wire transfer, certified check or cashier’s check); provided, however, that at the
discretion of the Committee, the aggregate Base Price payable upon exercise of
the option granted pursuant to this Agreement may be made through (a) a cashless
exercise procedure (i.e., the number of shares to be received will be equal to
(i) the number of shares exercised by the Optionee less (ii) the number
of shares (valued at their fair market value as of the close of business on the
last trading date immediately prior to the exercise date) with a value equal to
the aggregate purchase price to be paid for such shares), (b) through the
transfer to the Company of shares of Common Stock already owned by the Optionee
(based on the fair market value of such shares on the date the option is
exercised as determined in a manner consistent with the establishment of fair
market value per share on the Date of Grant) or (c) any such other manner as may
be determined at the discretion of the Committee and is in compliance with
applicable laws and which will not subject the Company, grantee or the
compensation at issue to any tax, interest or penalties under Xxxxxxx 000X xx
xxx Xxxxxx Xxxxxx Internal Revenue Code of 1986, as amended from time to time
and any Department of Treasury rules and regulations issued
thereunder. In addition to payment of the aggregate Base Price, the
Company may, at the discretion of the Committee, either withhold from the
Optionee a number of shares (valued at their fair market value as of the close
of business on the last trading date immediately prior to the exercise date)
with an aggregate value equal to, or condition the exercise of the option
granted by this Agreement upon the Optionee’s deposit with the Company of funds
in the amount of, any federal, state or local income withholding tax arising
from such exercise. No shares shall be issued until withholding of or
full payment therefor, including any associated taxes, has been made in
accordance with such determination by the Committee. In the event
that the Optionee elects to exercise less than all of the option granted
pursuant to this Agreement in accordance with the terms and conditions of this
Agreement, any remaining portion of such option shall remain vested and
exercisable until the Expiration Date, subject to the terms and conditions of
this Agreement.
4. Exercise
of Option. In order to
exercise the option, in whole or in part, the Optionee shall complete, execute
and deliver to the Company the form of notice attached hereto as Exhibit
A and incorporated herein by reference or of any other form of written
notice approved for such purpose by the Committee which shall state the
Optionee’s election to exercise the option granted under this Agreement, the
number of shares in respect of which such option is being exercised, and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares of Common Stock as may be required by the Committee
pursuant to the provisions of the Plan. Such written notice shall be
signed by Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. If applicable, such written notice shall be
accompanied by payment of the aggregate Base Price. This Option shall be deemed
to be exercised upon receipt by the Company of such written notice and, if
applicable, the aggregate Base Price.
5. Post-employment
Competition. As provided in
the Plan, the Company shall have the right, but not be obligated, to repurchase
any shares acquired by Optionee upon exercise of the option granted pursuant to
this Agreement (at a price equal to the aggregate Base Price paid by the
Optionee) in the event that the Optionee shall, within six (6) months of the
termination of his employment with the Company, commence employment which the
Committee reasonably believes, in its discretion, to be competitive with the
Company or in violation of that certain Employment Agreement dated August 24,
1999 between the Company and the Optionee (the “Employment Agreement”); provided, however, that (a)
such repurchase right shall only be applicable to shares acquired upon exercise
of the option granted pursuant to this Agreement that occurs on or after a date
which is six (6) months prior to the Optionee’s termination of employment with
the Company and (b) the Company’s right to repurchase such shares shall be null
and void if the termination of Optionee’s employment occurs as the result of a
Change of Control (as defined in the Employment Agreement)
6. Termination
of Service. In the event that
the Optionee’s employment by the Company or its affiliates is terminated for
“Cause” (as defined in the Employment Agreement), then the option granted
pursuant to this Agreement shall immediately and automatically, without any
further action by the parties hereto, expire on the date of such
termination. In the event that the Optionee’s employment with the
Company or its affiliates is terminated for any reason other than Cause,
including without limitation: (a) of a Change of Control (as defined in the
Employment Agreement), (b) termination of Optionee’s employment by the Company
without Cause (as defined in the Employment Agreement), (c) termination of
Optionee’s employment by the Optionee for Good Reason (as defined in the
Employment Agreement), or (d) the retirement, death or Disability (as defined in
the Employment Agreement) of the Optionee, then all shares issuable pursuant to
the option granted by this Agreement shall remain fully vested and exercisable
in accordance with the terms and conditions of this Agreement until the
Expiration Date.
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“THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED WITHOUT AN OPINION OF COUNSEL
SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY THAT SUCH TRANSFER MAY BE
LAWFULLY EFFECTED IN THE ABSENCE OF SUCH REGISTRATION.”
8.
Non-Transferability. Neither the option hereby
granted nor any rights thereunder or under this Agreement may be assigned,
transferred or in any manner encumbered by the Optionee except by will or the
laws of descent and distribution, and any attempted assignment, transfer,
mortgage, pledge or encumbrance except as herein authorized, shall be void and
of no effect. The option may be exercised during Optionee's lifetime
only by him. Notwithstanding the foregoing, the option may be transferred by
gift or otherwise to a member of Optionee's immediate family and/or trusts whose
beneficiaries are members of Optionee's immediate family, or to such other
persons or entities as may be approved in writing by the Committee prior to such
transfer.
9. No
Guarantee of Continued Employment. Optionee
acknowledges and agrees that nothing in this Agreement or the Plan shall confer
on Optionee the right to continue in the service of the Company or any affiliate
thereof or interfere in any way with the right of the Company or any affiliate
thereof to terminate his service at any time.
10. Shares
Issued on Exercise of Option. It is the intention of the
Company that on any exercise of this option it will transfer to Optionee shares
of its authorized but unissued stock or transfer Treasury shares, or utilize any
combination of Treasury shares and authorized but unissued shares, to satisfy
its obligations to deliver shares of the Common Stock upon any exercise of the
stock option granted pursuant to this Agreement.
11. Committee
Administration.
This option has been granted pursuant to a determination made by the Committee,
and such Committee or any successor or substitute committee authorized by the
Board of Directors, subject to the express terms of this Agreement, shall have
plenary authority to interpret any provision of this Agreement and to make any
determinations necessary or advisable for the administration of this Agreement
and the exercise of the rights herein granted, and may waive or amend any
provisions of this Agreement in any manner not adversely affecting the rights
granted to Optionee by the express terms of this Agreement.
12. Option
Not an Incentive Stock Option. The grant contemplated by
this Agreement is not intended as, nor shall it be treated as or deemed to be,
an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended.
13. Choice of
Law. This
Agreement shall be governed by the laws of the State of Missouri, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of the Agreement to the substantive law of
another jurisdiction. Optionee hereby agrees to submit to the exclusive
jurisdiction and venue of the federal or state courts of Missouri, County of St.
Louis, to resolve any and all issues that may arise out of or relate to this
Agreement.
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14. Waiver. No delay or
omission to exercise any right, power or remedy accruing to any party hereto
upon any breach or default of any party under this Agreement, shall impair any
such right, power or remedy of such party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party or any
provisions or conditions of this Agreement, shall be in writing and shall be
effective only to the extent specifically set forth in such
writing.
15. Integration. This Agreement, and the
other documents referred to herein or delivered pursuant hereto which form a
part hereof contain the entire understanding of the parties with respect to its
subject matter. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein. This
Agreement, including without limitation the Plan, supersedes all prior
agreements and understandings between the parties with respect to its subject
matter.
16. Optionee
Acknowledgment. The Participant
hereby acknowledges receipt of a copy of the Plan and represents that he is
familiar with the terms and provisions thereof, and hereby accepts this
Agreement subject to all of the terms and provisions
thereof. Optionee has reviewed the Plan and this Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this
Agreement. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions
arising under the Plan or this Agreement.
IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed on its behalf by its duly
authorized representative set forth below, and Optionee has signed this
Agreement to evidence his acceptance of the option herein granted and of the
terms hereof, all as of the date hereof.
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“COMPANY”
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ALLIED
HEALTHCARE PRODUCTS, INC.
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By:
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/s/ Xxxxxx X. Xxxx
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Name:
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Xxxxxx X. Xxxx
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Title:
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Chief Financial Officer
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“OPTIONEE”
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/s/ Xxxx Xxxxxxxx
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Xxxx
Xxxxxxxx, individually
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EXHIBIT
A
Exercise
Notice
Allied
Healthcare Products, Inc.
0000
Xxxxxxxx Xxxxxx
Xx.
Xxxxx, Xxxxxxxx 00000
Attn: Chairman
Re: EXERCISE
OF 2009 INCENTIVE STOCK OPTION
Ladies
and Gentlemen:
I hereby exercise the option granted to
me under that certain Agreement (the “Agreement”) between me and Allied
Healthcare Products, Inc. (the “Company”) dated August 27, 2009, to purchase
Three Hundred Twenty Thousand (320,000) shares of the Company’s common stock,
$0.01 par value per share (the “Common Stock”), with respect to ______ (_____)
shares of Common Stock for an aggregate purchase price of $__________ (the
“Aggregate Exercise Price”). Pursuant to the Agreement, payment of
the Aggregate Exercise Price may be made in whole or in part by immediately
available funds (by wire transfer, certified check or cashier’s check); provided, that at the
discretion of the Committee (as defined in the Agreement), the Aggregate
Exercise Price may be payable through (a) a cashless exercise procedure or (b)
the transfer to the Company of shares of the Company’s Common Stock already
owned by me or (c) any such other manner as may be determined at the discretion
of the Committee and is in compliance with applicable laws and which will not
subject the Company, grantee or the compensation at issue to any tax, interest
or penalties under Xxxxxxx 000X xx xxx Xxxxxx Xxxxxx Internal Revenue Code of
1986, as amended from time to time and any Department of Treasury rules and
regulations issued thereunder. As consideration for such shares, I
therefore elect to pay the Aggregate Exercise Price by [wire transfer / certified check /
cashier’s check] unless the Committee decides to permit alternative
payment arrangements as set forth above.
I understand that the Company shall,
and I hereby authorize the Company to, withhold from me a number of shares of
the Common Stock (valued at their fair market value) with an aggregate value
equal to any federal or state income withholding tax arising from such
exercise. I also understand and agree that no shares will be issued
until full payment for (or, if applicable, withholding in the amount of) the
Aggregate Exercise Price and any associated taxes, has been made.
Upon your receipt of full payment as
aforesaid, please issue in my name and send the certificates representing the
shares purchased by my exercise of the option awarded pursuant to this Agreement
to me at the address indicated below.
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Date:_______________________
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____________________________
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Optionee, ____________________
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_____________________________
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_____________________________
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Address
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