Exhibit 10.37
NONSTATUTORY STOCK OPTION AGREEMENT
(cliff vesting, performance-based acceleration)
Pursuant to the Grant Notice and this Nonstatutory Stock Option
Agreement, the Company has granted you an option to purchase the number of
shares of Common Stock indicated in the Grant Notice at the exercise price
indicated in the Grant Notice. Shares issued upon your exercise of your option
are hereinafter referred to as "Option Shares."
Your option is granted in connection with and in furtherance of the
Company's compensatory benefit plan for the Company's employees (including
officers), directors or consultants, and is intended to comply with the
provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"). Defined
terms not explicitly defined in this Stock Option Agreement but defined in the
Plan shall have the same definitions as in the Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option
will vest as provided in the Grant Notice.
2. Method of Payment.
(a) Payment Options. Payment of the exercise price by cash or check
is due in full upon exercise of all or any part of your option, provided that
you may elect, to the extent permitted by applicable law and the Grant Notice,
to make payment of the exercise price under one of the following alternatives:
(i) Payment pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which, prior to the issuance of
Option Shares, results in either the receipt of cash (or check) by the Company
or the receipt of irrevocable instructions to pay the aggregate exercise price
to the Company from the sales proceeds;
(ii) Delivery of shares of any class or series of the Company's
capital stock, the fair market value of which (as determined by the board of
directors of the Company in its sole discretion) is equal to the option exercise
price; or
(iii) Payment by a combination of the above methods.
3. Whole Shares. Your option may only be exercised for whole shares.
4. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, your option may not be exercised unless the shares issuable
upon exercise of your option are then registered under the Securities Act or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.
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5. Term. The term of your option commences on the date of grant and
expires upon the earliest of:
(i) the Expiration Date indicated in the Grant Notice; and
(ii) the violation by you of any provision of this Agreement.
6. Exercise.
(a) You may exercise the your option during its term (to the extent
vested) by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.
(b) By exercising your option you agree that the Company (or a
representative of the underwriters) may, in connection with the first
underwritten registered public offering of any securities of the Company under
the Securities Act, require that you not sell or otherwise transfer or dispose
of any Option Shares or other securities of the Company during such period (not
to exceed one hundred eighty (180) days) following the effective date of the
registration statement of the Company filed under the Securities Act as may be
requested by the Company or the representative of the underwriters. You further
agree that the Company may impose stop-transfer instructions with respect to
securities subject to the foregoing restrictions until the end of such period.
7. Transferability. Your option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.
8. Right of First Refusal. The Company shall have a right of first
refusal, as set forth below, with respect to the Option Shares. Except for
Permitted Transfers (as defined below), no Option Shares may be transferred
unless (a) the holder delivers to the Company written notice of his/her intent
to transfer all or any part of such shares (the "Offered Shares"), including the
name and address of the proposed transferee and the proposed terms and
conditions of such transfer (the "Notice of Intent to Sell"), and (b) within
thirty (30) days following its receipt of the Notice of Intent to Sell the
Company does not deliver to the holder written notice of its intent to exercise
its right of first refusal and purchase the Offered Shares on the terms set
forth in the Notice of Intent to Sell. The Company's right of first refusal must
be exercised as to all the Offered Shares unless the holder consents to exercise
for less than all the Offered Shares. The purchase of the Offered Shares
following exercise must be completed within sixty (60) days of the Company's
receipt of the Notice of Intent to Sell or such longer period of time as has
been offered by the person to whom you intend to transfer the Offered Shares.
"Permitted Transfer" means a transfer to a member of your immediate family or to
a trust for the benefit of you and/or one or more members of your immediate
family, provided that each such transferee shall have
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executed and delivered to the Company a written acknowledgment that such Option
Shares remain subject to the provisions of this Agreement, including the
Company's right of first refusal hereunder. This Section 8 shall terminate and
be of no further force and effect upon the closing of the first underwritten
public offering of the Company's equity securities under the Securities Act.
9. Taxation; Tax Withholding Requirements. You understand and
acknowledge that upon exercise of your option you will recognize for income tax
purposes an amount of ordinary income equal to the excess, if any, of the fair
market value of the shares of the Common Stock received over the exercise price
for such shares. Any amounts required by any then applicable tax law to be
withheld by the Company from the compensation you are deemed to have received
upon any exercise of your option or portion thereof shall be satisfied, at
election, either by having the Company withhold shares, or by delivery of cash
or shares of the Common Stock having a value equal to the amount required to be
withheld.
10. Option Not a Service Contract. Your option is not an employment
contract and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue or resume being in the employ
of the Company, or of the Company to continue or resume your employment with the
Company. In addition, nothing in your option shall obligate the Company, its
shareholders, board of directors, officers or employees to continue or resume
any relationship which you might have as a director or consultant for the
Company.
11. Notices. Any notices provided for in your option or in the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the last
address you provided to the Company.
12. Governing Plan Document. Your option is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
option, including without limitation the provisions of the Plan relating to
option provisions, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and adopted
pursuant to the Plan. In the event of any conflict between the provisions of
your option and those of the Plan, the provisions of the Plan shall control.
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VISTACARE, INC.
NONSTATUTORY STOCK OPTION GRANT NOTICE
(1998 Stock Option Plan)
VistaCare, Inc. (the "Company"), pursuant to its 1998 Stock Option Plan
(the "Plan") hereby grants to Optionee an option to purchase the number of
shares of the Company's Common Stock (the "Common Stock") set forth below. This
option is subject to all of the terms and conditions as set forth herein and in
Attachments I, II and III, which are incorporated herein in their entirety.
Optionee: Xxxxxxx X. Xxxxxx
Date of Grant: November 11, 2002
Vesting Start Date: November 11, 2002
Shares Subject to Option: 800,000
Exercise Price Per Share: $5.00
Expiration Date: November 10, 2012
Incentive Stock Option X Nonstatutory Stock Option
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VESTING: This option may only be exercised with respect to shares
subject hereto which are vested. All of the shares subject hereto shall vest on
September 30, 2012 ("Vesting Date"); provided, however, that vesting shall be
accelerated with respect to the number of shares and upon the occurrence of the
events described below (collectively, "Acceleration Events"):
(a) If the average closing price of the Common Stock, as reported by
the principal exchange for the Common Stock, for any thirty (30) consecutive
trading days after the initial underwritten registered public offering of the
Common Stock (the "IPO") equals or exceeds $5.50 per share, vesting shall be
accelerated immediately with respect to 250,000 of the shares subject hereto.
(b) If after the IPO the average closing price of the Common Stock, as
reported by the principal exchange for the Common Stock, for all of the trading
days in December 2003 equals or exceeds $6.33 per share, vesting shall be
accelerated immediately with respect to 250,000 of the shares subject hereto and
with respect to the shares referred to in clause (a) above, if not already
vested.
(c) If after the IPO the average closing price of the Common Stock, as
reported by the principal exchange for the Common Stock, for all of the trading
days in December 2004 equals or exceeds $7.27 per share, vesting shall be
accelerated immediately with respect to 100,000 of the shares subject hereto and
with respect to the shares referred to in clauses (a) and (b) above, if not
already vested.
(d) If after the IPO the average closing price of the Common Stock, as
reported by the principal exchange for the Common Stock, for all of the trading
days in December 2005 equals or exceeds $8.36 per share, vesting shall be
accelerated immediately with respect to 100,000 of the shares subject hereto and
with respect to the shares referred to in clauses (a), (b) and (c) above, if not
already vested.
(e) If after the IPO the average closing price of the Common Stock, as
reported by the principal exchange for the Common Stock, for all of the trading
days in December 2006 equals or exceeds $9.62 per share, vesting shall be
accelerated immediately with respect to 100,000 of the shares subject hereto and
with respect to the shares referred to in clauses (a), (b), (c) and (d) above,
if not already vested.
(f) Upon the Sale of the Company (as defined below), vesting shall be
accelerated depending on the Per-Share Equity Value (as defined below) with
respect to the shares set forth below:
Per-Share Equity Value Number of Shares Vested
---------------------- -----------------------
Less than $5.50 none
$5.50 or more but less than $6.33 the shares referred to in clause (a) above, if not already
vested
$6.33 or more but less than $7.27 the shares referred to in clauses (a) and (b) above, if not
already vested
$7.27 or more but less than $8.36 the shares referred to in clauses (a), (b) and (c) above, if
not already vested
$8.36 or more but less than $9.62 the shares referred to in clauses (a), (b), (c) and (d) above,
if not already vested
$9.62 or more the shares referred to in clauses (a), (b), (c), (d) and (e)
above, if not already vested
The vesting of this Option shall be unaffected by the death or
disability of the Optionee.
This option shall not vest on the Vesting Date or on the date of any
Acceleration Event unless the optionee is an employee of the Company on such
date.
Example: Assume the Company closes its IPO in January 2003. The stock
does not trade above $5.50 until February 1, 2004 when it increases to $6.00 and
for the next 30 trading days trades between $6.00 and $6.25. Thereafter, the
stock trades below $4.00 until December 1, 2006 when it increases to $10.00 and
closes above $10.00 every trading day in December 2006. Assuming the Optionee
remains employed by the Company, vesting would be as follows: No shares would
vest until the 30 trading days commencing on February 1, 2004 have elapsed after
which 250,000 shares would vest pursuant to clause (a). All of the remaining
shares would vest at the end of December 2006 pursuant to clause (e).
DEFINITION: As used herein, the following terms shall have the
following respective definitions:
"Per-Share Equity Value" means (i) the total amount of cash and the
fair market value of all other property paid directly or indirectly by an
acquiror to the Company and/or its equity security holders in connection with a
Sale of the Company, divided by (ii) the total number of outstanding shares of
the Common Stock immediately before the closing of a Sale of the Company
transaction, assuming the conversion of all shares of capital stock convertible
into the Company and the exercise of all warrants, options and other rights to
purchase the Common Stock. The value of any securities issuable in connection
with a Sale of the Company (whether debt or equity) freely tradable in an
established public market will be determined on the basis of the last closing
price in such market five (5) days prior to the consummation of the Sale of the
Company (the "Valuation Date"), and the value of securities not freely tradable
(or having no established market) or other property will be the fair market
value of such securities or other property on such Valuation Date as determined
in good faith by the Company's Board or Directors.
"Sale of the Company" means (i) the acquisition by a person, party or a
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) of outstanding capital stock of the Company
representing more than 50% of the combined voting power of all voting securities
of the Company entitled to vote generally in the election of directors,
excluding acquisitions from the Company, or (ii) the acquisition of the Company
by means of a reorganization, merger, consolidation, recapitalization or asset
sale, unless the owners of the capital stock of the Company immediately before
such transaction continue to own, in substantially the same proportions as
before such transaction, capital stock of the acquiring or succeeding entity
representing more than 50% of the combined voting power of all voting securities
of such acquiring or succeeding entity entitled to vote generally in the
election of directors.
ACKNOWLEDGMENT: The undersigned Optionee acknowledges and agrees that
Section 5 of that certain Management Agreement dated as of October 9, 2002 by
and between the Company and the Optionee shall have no effect upon the option
granted hereby and that the terms pursuant to which this option shall vest shall
be governed exclusively by the Nonstatutory Stock Option Agreement to which this
Grant Notice relates.
ADJUSTMENTS UPON CHANGES IN STOCK: Consistent with Section 10 of the
Plan, in the event of any stock split, stock dividend, reverse stock split,
recapitalization or similar event affecting the Common Stock, the share numbers
and dollar amounts referred to above shall be appropriately adjusted.
PAYMENT: Payment by cash or check, or delivery of previously owned
shares of the Common Stock.
VISTACARE, INC. OPTIONEE
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
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Signature
Title: Chairman Date: October 14, 2002
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Date: October 14, 2002
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Attachment I: Nonstatutory Stock Option Agreement
Attachment II: 1998 Stock Option Plan
Attachment III: Notice of Exercise
Attachment III
NOTICE OF EXERCISE
VistaCare, Inc.
0000 Xx. Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Date of Exercise:______________
Ladies and Gentlemen:
This constitutes notice under my Stock Option Agreement (the
"Agreement") that I elect to purchase the number of shares for the price set
forth below.
Type of option (check one): Incentive [ ] Nonstatutory [ ]
Stock option dated: ___________________
Number of shares as
to which option is exercised: ___________________
Certificates to be
issued in name of: ___________________
Total exercise price: $__________________
Cash payment delivered herewith: $__________________
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the VistaCare, Inc. 1998 Stock Option
Plan, (ii) to provide for the payment by me to you (in the manner designated by
you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to
notify you in writing within fifteen (15) days after the date of any disposition
of any of the shares of Class A Common Stock issued upon exercise of this option
that occurs within two (2) years after the date of grant of this option or
within one (1) year after such shares of Class A Common Stock are issued upon
exercise of this option.
I acknowledge that all certificates representing any of the shares
subject to the provisions of the Option shall have endorsed thereon appropriate
legends reflecting restrictions pursuant to the Agreement, the Company's
Certificate of Incorporation or Bylaws and/or applicable securities laws.
I agree that, if required by the Company (or a representative of the
underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Securities Act of 1933, as
amended (the "Securities Act"), I will not sell or otherwise transfer or dispose
of any shares of Class A Common Stock or other securities of the Company during
such period (not to exceed one hundred eighty (180) days) following the
effective date of the registration statement of the Company filed under the
Securities Act (the "Effective Date") as may be requested by the Company or the
representative of the underwriters. I further agree that the Company may impose
stop-transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
Very truly yours,
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Name
