OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
SERVICE OPTION
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AGREEMENT made as of the ____ day of ______, 199_ by and between OEC
Medical Systems, Inc., a Delaware corporation (hereinafter called "Company") and
___________________ (herein after called "Optionee").
WITNESSETH:
RECITALS
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A. The Company's 1998 Stock Option Plan (the "Plan") has been
implemented for the purpose of providing equity incentives to select Employees
(including Officers and Directors) and Consultants of the Company and the
Company's Subsidiaries in order to encourage such persons to remain in the
employ or service of the Company or the Company's Subsidiaries.
B. Optionee is an individual who is to render valuable services
to the Company or its Subsidiaries, and this Agreement is executed pursuant to,
and is intended to carry out the purposes of, the Plan in connection with the
Company's grant of a stock option to Optionee.
C. The granted option is intended to be a non-qualified stock
option which does NOT meet the requirements of Section 422 of the Internal
Revenue Code.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee a
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non-qualified stock option (the "Option") under the Plan to purchase all or any
part of an aggregate of ______ shares of the Company's common stock, $0.01 par
value per share ("Common Stock"), upon the terms and conditions set forth herein
and in the Plan, with the terms and conditions of the Plan hereby incorporated
into this Agreement by reference. Except to the extent otherwise specifically
provided in this Agreement, all capitalized terms shall have the meaning set
forth in the Plan.
2. EFFECTIVE DATE. The effective date and grant date of this Option
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are _____________, 199_ (the "Effective Date").
3. EXERCISE PRICE. The exercise price for purchase of the shares
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of Common Stock covered by this Option (the "Option Shares") shall be $_______
per share (the "Option Price"), the closing selling price per share of the
Common Stock on
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
1
the New York Stock Exchange on the Effective Date, as reported in the Wall
Street Journal.
4. OPTION TERM. This Option shall terminate on the first to
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occur of (i) the expiration of the applicable exercise period under Paragraph 7
following the date of the Optionee's Employment Termination or (ii) the
expiration date of the ten-year period measured from the Effective Date (the
"Expiration Date").
5. ADJUSTMENTS/STOCKHOLDER RIGHTS.
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A. The number of Option Shares and the Option Price payable per
share may be adjusted by the Plan Administrator upon certain circumstances in
accordance with the provisions of Section 4.4 of Article One and Section 3.1 of
Article Two of the Plan.
B. Optionee shall have no stockholder rights with respect to
any Option Shares until Optionee shall have exercised the Option, paid the
Option Price and been issued a stock certificate for the purchased Option
Shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as may otherwise be provided in Section 4.4 of Article One and Section
3.1 of Article Two of the Plan.
6. EXERCISE OF OPTIONS.
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Provided Optionee continues to render services as an Employee,
Director or Consultant, this Option shall become exercisable for the Option
Shares in a series of successive quarterly installments in accordance with the
following schedule:
[[ - Upon the Optionee's completion of each three (3)-month period
of service as an Employee, Director or Consultant during the forty-eight (48)
month period measured from __________ the Effective Date, the Option shall
become exercisable for 6.25% of the total number of Option Shares.]]
Each installment of Option Shares for which this Option becomes
exercisable shall accumulate, and the Option shall remain exercisable for such
accumulated installments until the Expiration Date or sooner termination of this
Option pursuant to Paragraph 7 of this Agreement.
7. EXERCISE AFTER EMPLOYMENT TERMINATION. This Option shall
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not become exercisable for any additional Option Shares following the Optionee's
Employment Termination and may only be exercised after such Employment
Termination as follows:
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
2
A. If the Optionee's Employment Termination occurs for any
reason other than death or Permanent Disability, then this Option may be
exercised, for one or more of the Option Shares (if any) for which it was
exercisable on the date of such Employment Termination, only during the ninety
(90)-day period following such date. Upon the expiration of such period, this
Option shall terminate and cease to be exercisable.
B. If the Optionee's Employment Termination occurs by reason
of death or Permanent Disability, then this Option may be exercised, for one or
more of the Option Shares (if any) for which it was exercisable on the date of
such Employment Termination (less any Option Shares subsequently purchased by
the Optionee prior to death), only during the twelve (12)-month period following
such date. Upon the expiration of such period, this Option shall terminate and
cease to be exercisable.
C. Notwithstanding subparagraphs A and B above, in no event
may this Option be exercised at any time after the Expiration Date.
D. In the event of the Optionee's death, this Option may be
exercised, subject to the limitations of subparagraphs B and C above, by the
executors or administrators of the Optionee's estate or by any person or persons
who have acquired the Option directly from the Optionee by bequest or
inheritance.
8. METHOD OF EXERCISE.
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A. Optionee may exercise the Option for any or all of the
Option Shares for which the Option is at the time exercisable pursuant to the
provisions of Paragraphs 6 and 7 by giving the Company written notice of such
exercise in which there is specified the number of Option Shares as to which the
Option is so exercised. Such notice shall be accompanied by payment to the
Company, either in cash or by check in form satisfactory to the Company, of an
amount equal to the sum of the Option Price of the purchased shares of Common
Stock plus any amounts required to be withheld pursuant to Paragraph 15.
B. The Option Price may also be paid in one of the alternative
forms specified below, and such form of payment must also accompany the notice
of exercise (unless the sale and remittance procedure of clause (iii) below is
utilized):
(i) in whole or in part with shares of Common Stock delivered
to the Company in accordance with the terms of the Plan,
(ii) through a broker-dealer sale and remittance procedure
pursuant to which the Optionee (a) shall provide irrevocable written
instructions to a Company-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Company, out
of the sale proceeds available on the settlement date, sufficient
funds to cover
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
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the aggregate Option Price payable for the purchased shares plus all
applicable Federal and State income and employment taxes required to
be withheld by the Company by reason of such purchase and (b) shall
provide written directives to the Company to deliver the certificates
for the purchased shares directly to such brokerage firm in order to
complete the sale transaction, or
(iii) with the consent of the Plan Administrator, either (a) by
delivery of the Optionee's full-recourse promissory note (in
accordance with the terms of the Plan) or (b) on such other basis as
the Plan Administrator determines is acceptable.
9. NON-ASSIGNABILITY OF OPTION. This Option is not assignable
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or transferable by Optionee except by will or by the laws of descent and
distribution following the Optionee's death. During the Optionee's lifetime,
the Option is exercisable only by the Optionee. Any attempt to assign, pledge,
transfer, hypothecate or otherwise dispose of this Option, and any levy of
execution, attachment or similar process on this Option, shall be null and void.
10. OPTION ACCELERATION. Provided one of the events specified
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in clauses (i) through (iv) below should occur (A) more than six (6) months
after the Effective Date and (B) while Optionee is an active Employee, Director
or Consultant, then Optionee shall have the right (without regard to the normal
exercise schedule set forth in Paragraph 6) to exercise this Option, within the
applicable exercise period specified below, for any or all of the Option Shares
as fully-vested shares of Common Stock:
(i) Within thirty (30) days following the loss of Employee,
Consultant, or Director status due to consummation of any transaction
which (I) is approved by the stockholders of the Company in which the
Company will cease to be an independent corporation (including,
without limitation, a reverse merger transaction in which the Company
becomes the subsidiary of another corporation) or the sale or other
disposition of all or substantially all of the assets of the Company,
and (II) caused the Optionee to lose his or her status as an Employee,
Consultant, or Director within one year after the closing date of the
transaction;
(ii) Within thirty (30) days following the first date on which
there is a change in the composition of the Board effected through one
or more contested elections for Board membership such that less than
two- thirds of the individual members of the Board (determined by
rounding up to the next whole number) is comprised of individuals who
(A) were Directors of the Company on a date three (3) years prior to
the
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
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date of such change or (B) were elected or nominated for election as
such Directors during the intervening three (3)-year period by
affirmative vote of at least a majority of those Directors described
in clause (A) above who were still in office as of the date the Board
approved such election or nomination;
(iii) Within thirty (30) days after any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934) or any related group of persons (other than such a group that
includes the Company) acquires (A) 40% or more of the outstanding
Common Stock pursuant to a tender or exchange offer that the Board
does not recommend the stockholders to accept or (B) 50% or more of
the outstanding Common Stock in a single transaction or in a series of
related transactions; or
(iv) Within the thirty (30)-day period ending with the effective
date of any dissolution or liquidation of the Company or any merger or
consolidation in which the Company is not the surviving corporation
(except for a transaction the principal purpose of which is to change
the State of the Company's incorporation), but not earlier than the
date on which any required stockholder approval is obtained.
If the Option as so accelerated is not exercised during the applicable
thirty (30)-day period described in clause (i) or (iv) above, then the Option
shall terminate at the close of business on the last day of such thirty (30)-day
period, unless the Option is assumed by the acquiring corporation (or its parent
company) in connection with a merger or consolidation in which the Company is
not the surviving entity. Should this option not qualify for acceleration under
clause (i) or (iv) because it has not been outstanding for at least six (6)
months prior to the clause (i) or (iv) event, then this option shall be subject
to adjustment under Section 3.1 of Article Two of the Plan, if and to the extent
the option is to continue in effect after such clause (i) or (iv) event;
otherwise, this option shall terminate upon the occurrence of such clause (i) or
(iv) event.
11. RESTRICTION OF ISSUANCE OF SHARES.
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A. LEGALITY OF ISSUANCE. The Company shall not be obligated to
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sell or issue any Option Shares pursuant to this Option (the "Exercised Shares")
if such sale or issuance would, in the opinion of the Company and the Company's
counsel, constitute a violation by the Company of any provision of law,
including without limitation the provisions of the Securities Act of 1933, as
amended (the "Act").
B. REGISTRATION OR QUALIFICATION OF SECURITIES. The Company may,
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but shall not be required to, register, qualify, or perfect an exemption under
the Act or any other applicable law for the grant of this Option or the issuance
or sale of any
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
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Exercised Shares. The Company shall not be obligated to take any affirmative
action in order to cause the grant or exercise of this Option or the issuance or
sale of any Exercised Shares pursuant hereto to comply with any law or to be
listed or qualified on any stock exchange.
12. RESTRICTION ON TRANSFER. Regardless of whether the sale of
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the Exercised Shares has been registered under the Act or has been registered or
qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of the Exercised Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and the Company's counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions of the
Act, the securities law of any state, or any other law.
13. STOCK CERTIFICATE RESTRICTIVE LEGENDS. The stock
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certificates evidencing the Exercised Shares shall bear such restrictive legends
as the Company and the Company's counsel deem necessary or advisable under
applicable law or pursuant to this Agreement.
14. TAX ADVICE. Optionee hereby acknowledges and agrees that
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the Company has made no warranties or representations to Optionee with respect
to the income tax consequences of the transactions contemplated by this
Agreement, including (without limitation) the acquisition of the Option Shares
upon exercise of this Option in accordance with Paragraph 8, and the Optionee is
in no manner relying on the Company or the Company's representatives for an
assessment of such tax consequences.
15. WITHHOLDING OF TAX. In the event the Company determines
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that it or any Subsidiary may be required to withhold or collect, as a result of
any exercise of this Option or as a result of the disposition of the shares
acquired upon such exercise, any local, state, foreign or federal income or
other tax, Optionee agrees to make arrangements satisfactory to the Company to
meet such withholding or collection requirement.
16. BINDING EFFECT. Subject to the limitations set forth in
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Paragraph 9 of this Agreement, this Agreement shall be binding upon and inure to
the benefit of the executors, administrators, heirs, legal representatives, and
successors and assigns of the parties hereto; provided, however, that Optionee
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may not assign any of Optionee's rights under this Agreement other than as
permitted under Paragraph 9.
17. NO EMPLOYMENT OR SERVICE CONTRACT. Nothing in this
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Agreement or in the Plan shall confer upon the Optionee any right to continue in
the service of the Company (or any Subsidiary employing or retaining Optionee)
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Company (or any such Subsidiary) or the Optionee,
which rights are hereby expressly reserved by
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
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each, to terminate Optionee's status as an Employee or Consultant at any time
for any reason whatsoever, with or without cause.
18. GOVERNING LAW. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Utah applicable to
contracts entered into and wholly to be performed within the State of Utah by
Utah residents.
19. NOTICES. All notices and other communications under this
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Agreement shall be in writing. Unless and until the Optionee is notified in
writing to the contrary, all notices, communications and documents directed to
the Company and related to this Agreement, if not delivered by hand, shall be
mailed, addressed as follows:
OEC Medical Systems, Inc.
000 Xxxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Unless and until the Company is notified in writing to the contrary,
all notices, communications and documents intended for the Optionee and related
to this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books.
Notices and communications shall be mailed by first class mail,
postage prepaid; documents shall be mailed by registered mail, return receipt
requested, postage prepaid. All mailings and deliveries related to this
Agreement shall be deemed received only when actually received unless properly
mailed by registered mail, return requested, in which event they shall be deemed
received two days after the date of mailing.
20. PLAN LIMITATIONS. This Agreement and the Option evidenced
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hereby are made and granted pursuant to the provisions of the Plan and shall
accordingly be subject to the terms, conditions, limitations and restrictions of
the Plan. A copy of the Plan shall be made available to Optionee upon written
request to the Company at the address specified in Paragraph 19. All decisions
of the Plan Administrator with respect to any question or issue arising under
the Plan or this Agreement shall be conclusive and binding upon all persons
having an interest in this Option.
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
OEC MEDICAL SYSTEMS, INC.
By:_________________________________
Title: Chief Operating Officer
The Optionee hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
____________________________________
OPTIONEE
Optionee's current address is:
_____________________________
_____________________________
_____________________________
Soc. Sec. No. ___ - __ - ____
ACKNOWLEDGMENT
Optionee's spouse indicates by the execution of this Acknowledgment
his or her consent to be bound by the terms of the foregoing Non-Qualified Stock
Option Agreement as to his or her interests, whether as community property or
otherwise, if any, in the Option granted hereunder and in any Exercised Shares
purchased pursuant to such Option.
___________________________________
Optionee's Spouse
DATED: ________________, 199_.
OEC MEDICAL SYSTEMS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
MAY 1998
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