EXHIBIT 10.1
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of June 1, 1998 (the
"Agreement"), by and between Oak Tree Medical Systems, Inc., a Delaware
corporation (the "Company"), and Progressive Planning and Associates, Inc. (the
"Optionee").
WHEREAS, in consideration for the extraordinary services rendered in
connection with a proposed transaction which should add substantial value to the
Company, the Company amended, effective as of the date hereof, the Consulting
Agreement dated August 1997, to extend the duration of the consulting
relationship with the Company until August 2002 and grant the Options pursuant
to the terms and conditions set forth herein;
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the Company's best interests to grant the Optionee
options to purchase common stock of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties intending to be legally
bound hereby agree as follows:
1. GRANT OF OPTIONS.
1.1 The Company hereby grants to the Optionee options (the "Options")
to purchase 500,000 shares of common stock, par value $0.01 per share, of the
Company ("Common Stock") at an exercise price (the "Exercise Price") of $2.17
per share. The number and kind of shares issuable upon exercise of the Options
and the Exercise Price shall be adjusted upon the occurrence of the events and
in the manner provided in Article 3 of this Agreement.
1.2 The Options shall vest and become exercisable six (6) months from
the date hereof.
1.3 To the extent not theretofore exercised, the Options shall
terminate and expire at 5:00 p.m., New York time, ten years from the date
hereof.
1.4 The Company shall promptly file with the Securities and Exchange
Commission a registration statement on Form S-8 registering the shares of Common
Stock issuable upon the exercise of the Options by the Optionee and shall keep
such registration statement effective for as long as any of the Options are
outstanding.
2. METHOD OF EXERCISE.
The Options or any part thereof may be exercised only by the giving of
written notice to the Company on such form and in such manner as the Board shall
prescribe. Such written notice of exercise shall be accompanied by payment of
the full purchase price of the number of shares being purchased. Such payment
may be made by cash, certified check or check acceptable to the Company. The
date of exercise (the "Exercise Date") of the Options shall be the date on which
written notice of exercise is received by the Company, during normal business
hours, at its address as provided in Article 5 of this Agreement. On the
Exercise Date, the Optionee shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the
transfer books of the Company shall then be closed or certificates representing
such shares shall not then have been actually delivered to the Optionee. As soon
as practicable after the Exercise Date, the Company shall issue and deliver to
the Optionee a certificate or certificates for the number of shares issuable
upon such exercise, registered in the name of the Optionee.
3. ADJUSTMENT OF SHARES.
(a) If at any time while unexercised Options are outstanding, there
shall be any increase or decrease in the number of issued and outstanding Shares
through the declaration of a stock dividend or through any recapitalization
resulting in a stock split-up, combination or exchange of Shares, then and in
such event:
(i) appropriate adjustment shall be made in the maximum number
of Shares available for grant under the Plan, or available for grant to any
person under the Plan, so that the same percentage of the Company's issued and
outstanding Shares shall continue to be subject to being so optioned; and
(ii) appropriate adjustment shall be made in the number of
Shares and the exercise price per Share thereof then subject to any outstanding
Option, so that the same percentage of the Company's issued and outstanding
Shares shall remain subject to purchase at the same aggregate exercise price.
(b) Unless otherwise provided in any Option, the Committee or the Board
may change the terms of Options outstanding under this Agreement, with respect
to the option price or the number of Shares subject to the Options, or both,
when, in the Committee's or Board's sole discretion, such adjustments become
appropriate so as to preserve but not increase benefits under this Agreement.
(c) In the event of a proposed sale of all or substantially all of the
Company's assets or any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive, where the
securities of the successor corporation, or its parent company, are issued to
the Company's shareholders, then the successor corporation or a parent of the
successor corporation may, with the consent of the Committee or the Board,
assume each outstanding Option or substitute an equivalent option or right. If
the successor corporation, or its parent, does not cause such an assumption or
substitution to occur, or the Committee or the Board does not consent to such an
assumption or substitution, then each Option shall terminate upon the
consummation of sale, merger, consolidation or other corporate transaction.
(d) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made to, the number of or exercise price for Shares then subject to
outstanding Options granted under this Agreement.
(e) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under this Agreement shall not affect in any manner
the right or power of the Company to make, authorize or consummate (i) any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
4. NONASSIGNABILITY.
Except as provided below, no options granted to the Optionee under this
Agreement shall be assignable or transferable other than by will or by the laws
of descent and distribution or by qualified domestic relations orders (as
defined in the Internal Revenue Code).
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Unless otherwise restricted by law, the options granted to the Optionee
under this Agreement may be transferred to the Optionee's immediate family
members, any trust of which any member of the Optionee's immediate family is a
beneficiary or a trustee, or any other form of business entity whose partners,
members or stockholders consist of the Optionee and/or his immediate family. For
purposes of this Article 4, the Optionee's "immediate family" includes his
spouse, parents, children, brothers and sisters, mothers and fathers-in-law,
sons and daughters-in-law, and brothers and sisters-in-law, in each case whether
adopted or natural.
5. NOTICES.
Any and all notices or other communications required or permitted to be
given under any of the provisions of this Agreement shall be in writing and
shall be deemed to have been duly given and received when delivered personally
or three (3) days after mailing, if mailed by registered or certified mail,
return receipt requested; as to the Optionee, at the address set forth beneath
his signature hereof, or at such other address as the Optionee may hereafter
designate to the Company by notice as provided herein, and as to the Company,
addressed to the Chief Executive Officer of the Company at Oak Tree Medical
Systems, Inc., 000-00 Xxxxxx Xxxxxxx Xxxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 or at
such other address as the Company may hereafter designate to the Optionee by
notice as herein provided.
6. MISCELLANEOUS.
6.1 AUTHORITY. This Agreement has been duly authorized on behalf of the
Company by the Board. The Optionee represents that he is free to enter into this
Agreement and that his entering into this Agreement does not violate any
obligation that he has to any other person or legal entity.
6.2 SEVERABILITY. In the event that any provision of this Agreement
would be held to be invalid or unenforceable for any reason unless narrowed by
construction, this Agreement shall be construed as if such invalid or
unenforceable provision had been more narrowly drawn so as not to be invalid or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall attach only to such provision and shall not
affect or render invalid or unenforceable any other provision of this Agreement.
6.3 ENTIRE AGREEMENT. This Agreement set forth the entire understanding
of the Company and the Optionee with respect to the subject matter hereof and
cannot be amended or modified except by a writing signed by both parties.
6.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective successors and assigns, heirs and personal
representatives.
6.5 GOVERNING LAW. This Agreement shall be interpreted, construed and
administered in accordance with the laws of the State of Florida without regard
to choice of law provisions.
6.6 ARBITRATION. With respect to any suit, action or proceeding
initiated by a party to this Agreement arising out of, under or in connection
with this Agreement, the parties hereto each hereby submits to the exclusive,
final and binding arbitration of the American Arbitration Association of New
York, New York or Miami, Florida in accordance with their Commercial Arbitration
Rules. Whether such arbitration shall be maintained in New York or Florida shall
be the choice of the party instituting the arbitration proceeding. Judgment upon
the award rendered by the arbitrator may be entered in any court of record of
competent jurisdiction in any country, or application may be made to such court
for a judicial acceptance of the award and an order of enforcement, as the law
of such jurisdiction may require or allow. In the event the Optionee is
successful in pursuing any claim arising out of this Agreement, the Company
shall pay all of the Optionee's attorneys' fees and costs, including the
compensation and expense of the
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Arbitrator. In all other cases, the expenses of arbitration will be borne among
the parties as determined by the arbitrator.
6.7 COUNTERPARTS. This Agreement may be executed in counterparts which,
taken together, shall constitute a single original document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first written above.
OAK TREE MEDICAL SYSTEMS, INC.
By: /S/ XXXXX XXXXXX
---------------------------------------
Name: Xxxxx Xxxxxx
Title: President
OPTIONEE:
PROGRESSIVE PLANNING AND ASSOCIATES, INC.
By: /S/ XXXXXX XXXXXXX
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
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FIRST AMENDMENT
TO
CONSULTING AGREEMENT
THIS FIRST AMENDMENT TO CONSULTING AGREEMENT, dated as of the 1st day
of June, 1998 by and among Oak Tree Medical Systems, Inc., a Delaware
corporation, having a principal place of business at 000-00 Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx Xxxxxx,
residing at 00000 Xxxxxx Xxxx Xxxx, Xxxx X-00, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
("Dubbin" and collectively the "Parties").
RECITALS:
1. Pursuant to that certain Consulting Agreement (the "Consulting
Agreement") dated as of August, 1997, Dubbin resigned as an officer of the
Company and became a consultant to the Company.
2. In consideration for the extraordinary services rendered in
connection with a proposed transaction which should add substantial value to the
Company, the Parties desire that the Consulting Agreement be amended, upon the
terms and conditions hereinafter set forth and Dubbin shall be granted options
to purchase 500,000 shares of the Company's common stock pursuant to the terms
set forth in that certain Stock Option Agreement, dated as of the date hereof,
attached hereto as Exhibit A.
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the Parties hereto, it is agreed:
1. RECITALS. The recitals set forth hereinabove are true and correct,
and the Parties hereby confirm and incorporate same into this Amendment.
2. DEFINED TERMS. All terms appearing herein with initial capital
letters and that are not defined herein shall have the meanings ascribed to such
terms in the Agreement.
3. AMENDMENT OF SECTION 3(D). Section 3(d) of the Consulting Agreement
is hereby deleted in its entirety and replaced by the following:
(d) The term of the Consultant's consulting services under
this Agreement shall continue until August 31, 2002. Except as otherwise
specifically provided in this Agreement, no termination of Consultant's
consulting services hereunder shall affect the Company's other obligations under
this Agreement, including without limitation, the Company's obligations under
Sections 2, 5, and 7.
4. AMENDMENT TO SECTION 4(A). Section 4(a) of the Consulting Agreement
is hereby deleted in its entirety and replaced by the following:
(a) The Company shall pay Consultant a fee in the amount of
twelve thousand five hundred dollars ($12,500.00) per month. Such fee shall be
payable on or before the first day of each month, commencing in the month
following the month in which this agreement is executed, and shall continue for
through August, 2002.
5. ADDITION OF SECTION 4(F). The following is hereby added to section 4
of the Agreement.
(f) The Company shall grant Consultant options to purchase
500,000 shares of the Company's common stock on the terms and conditions set
forth in the Stock Option Agreement, dated as of the date hereof, attached
hereto as Exhibit A.
6. AGREEMENT OTHERWISE UNCHANGED. Except as hereby amended, the
Consulting Agreement shall remain unmodified and in full force and effect.
7. CONFLICT WITH AGREEMENT. In the event that any one or more
provisions of this Amendment or provisions of the Agreement as amended hereby
shall conflict with any other provisions of the Agreement as amended hereby, the
provisions set forth in this Amendment shall govern to the greatest extent
possible.
8. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Florida without giving effect to choice of law provisions thereof.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment on the
date first above written.
OAK TREE MEDICAL SYSTEMS, INC.
By: /S/ XXXXX XXXXXX
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Xxxxx Xxxxxx, President
CONSULTANT:
/S/ XXXXXX XXXXXX
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Xxxxxx Xxxxxx
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