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Exhibit 10.31
New Option Grants
AMN HOLDINGS, INC.
1999 PERFORMANCE STOCK OPTION PLAN
Nonqualified Stock Option Agreement
STOCK OPTION AGREEMENT dated December 13, 2000, between AMN HOLDINGS,
INC., a Delaware corporation (the "Company"), and Xxxxx Xxxxxxxxxx (the
"grantee").
All words and phrases not otherwise expressly defined herein
shall have the same meanings as are ascribed to such words and phrases in the
Plan document,
The Committee has determined that the objectives of the Plan will
be furthered by granting to the grantee an option pursuant to the Plan.
In consideration of the foregoing and of the mutual undertakings
set forth in this Stock Option Agreement, the Company and the grantee agree as
follows:
SECTION 1. Grant of Option. The Company hereby grants to the grantee a
nonqualified stock option to purchase 1,847.2 shares of Stock at a purchase
price of $287.84 per share.
SECTION 2. Exercisability.
(a) In General. Subject to Section 4 hereof, the option shall become
vested and exercisable if, and only if certain performance targets are met, as
follows:
Number of Shares as to which
Fiscal Year EBITDA Option Becomes Exercisable
----------- ------ --------------------------
2001 at least $33,310,000 461.8
2002 at least $39,865,000 461.8
2003 at least $45,856,000 461.8
2004 at least $52,745,000 461.8
Any portion of the option that becomes exercisable pursuant to
the above shall become exercisable as of the date of delivery of audited
financial statements by the Company's independent auditor for the applicable
Fiscal Year (in each case, the "Fiscal Year Vesting Date"), provided that the
grantee was employed on the last day of the applicable Fiscal Year.
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(b) Change of Control Acceleration. Notwithstanding the foregoing, in
the event a Change of Control occurs prior to December 31, 2003, in which the
net proceeds actually received by HWH Capital Partners, L.P. and its affiliates
(collectively, "HWP") in the form of cash and marketable securities exceeds, on
an aggregate basis (after taking into account any prior sales by HWP of any
portion of its investment in the Company), $580.81 per share of Stock, the
portion of the option which was eligible to become vested pursuant to Section
2(a) with respect to the Fiscal Year in which a Change of Control occurs and, if
any, later Fiscal Years shall become exercisable, effective immediately prior to
such event.
(c) Expiration of Option.
(i) Generally. Subject to the provisions of this Section
2(c) and Section 4, the option shall terminate and
cease to be exercisable on December 31, 2009.
(ii) Special Rule. Notwithstanding the provisions of
Section 2(c)(i), if the Company does not meet the
performance target established in Section 2(a) for a
Fiscal Year, that portion of the option which was
eligible to become vested with respect to such Fiscal
Year shall immediately terminate.
SECTION 3. Method of Option Exercise. The option or any part thereof
may be exercised only by giving to the Company written notice of exercise in the
form prescribed by the Committee. Full payment of the purchase price shall be
made on the option exercise date by certified or official bank check or, in the
Committee's discretion (which shall not be unreasonably withheld), by personal
check (subject to collection), payable to the Company, or delivery of shares of
Stock already owned by the grantee for at least six months prior to the option
exercise date as described in Section 5.4(b)(iii) of the Plan. The grantee shall
have no right to pay the option exercise price, or to receive shares of Stock
with respect to an option exercise, prior to the option exercise date. For
purposes of this Stock Option Agreement, the "option exercise date" shall be
deemed to be the first business day immediately following the date written
notice of exercise is received by the Company.
SECTION 4. Termination of Employment.
(a) Unvested Options.
(i) General Rule. All unvested portions of an option
granted to a grantee shall terminate and no longer be
exercisable upon such grantee's termination of employment for
any reason, except to the extent that options may become
exercisable post-employment in accordance with Section 5.5 of
the Plan or may remain eligible for vesting pursuant to
Section 4(a)(ii) of this Agreement.
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(ii) Termination Before Performance Verified.
Notwithstanding Section 4(a)(i), if a grantee terminates
employment after the end of a Fiscal Year, but before the
Fiscal Year Vesting Date, (if applicable), the portion of such
grantee's option that was eligible to vest upon delivery of
audited financial statements confirming that performance
targets were met for such Fiscal Year shall remain outstanding
and eligible for vesting until delivery of such audited
financial statements. Thereafter, the unvested portion of such
option shall immediately terminate and the treatment of the
vested portion of the option shall be governed by Section
4(b).
(b) Vested Options.
(i) Death and Disability. Unless otherwise provided
herein, if a grantee's employment with the Company and its
subsidiaries terminates by reason of death or Disability (as
defined in a grantee's employment agreement, if applicable, or
if not applicable, as defined in section 22(e)(3) of the
Code), the portion, if any, of the option granted to such
grantee which was exercisable immediately prior to such
termination of employment or which becomes exercisable
thereafter in accordance with Section 4(a)(ii) of this
Agreement may be exercised by such grantee or, as the case may
be, by such grantee's court-appointed legal representative or,
in the case of the grantee's death, by the person or persons
to whom such option passes under the grantee's will (or, if
applicable, pursuant to the laws of descent and distribution)
until the earlier of (x) the later of (1) one year after the
grantee's termination by reason of death or Disability and (2)
with respect to any portion of the option that vests in
accordance with Section 4(a)(ii) of this Agreement, one year
after the date of delivery of audited financial statements and
(y) the date on which such portion of the option terminates or
expires in accordance with the provisions of the Plan and the
other provisions of this Stock Option Agreement.
(ii) Regular Termination; Leaves of Absence. Unless
otherwise provided herein, if the grantee's employment
terminates for reasons other than as provided in Section
4(b)(i), the portion, if any, of the option granted to such
grantee which was exercisable immediately prior to such
termination of employment or which becomes exercisable
thereafter in accordance with Section 4(a)(ii) of this
Agreement may be exercised by such grantee until the earlier
of (x) the later of (1) 90 days after the grantee's date of
termination and (2) with respect to any portion of the Option
that vests in accordance with Section 4(a)(ii) of this
Agreement, 90 days after the date of delivery of audited
financial statements, and (y) the date on which such option
terminates or expires in accordance with the provisions of the
Plan and the other provisions of this Stock Option Agreement.
The Committee may in its discretion determine (A) whether any
leave of absence (including short-term or long-term disability
or medical leave) shall constitute a termination of employment
for purposes
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of the Plan and (B) the impact, if any, of any such leave on
outstanding options under the Plan.
(c) Right of Discharge Reserved. Nothing in the Plan or this
Stock Option Agreement shall confer upon the grantee or any other person the
right to continue in the employment of the Company or any of its subsidiaries or
affect any right which the Company or any of its subsidiaries may have to
terminate the employment of the grantee or any other person.
SECTION 5. Withholding Tax Requirements. Shares of Stock deliverable to
the grantee upon exercise, pursuant to the terms of the Plan and this Stock
Option Agreement, shall be subject to income tax withholding as provided in
Section 10 of the Plan. Subject to the Committee's consent (which shall not be
unreasonably withheld), a grantee may elect to satisfy all or part of such
requirements by delivery of unrestricted shares of Stock owned by the grantee as
provided in Section 10.2 of the Plan.
SECTION 6. Agreement Provisions to Prevail. This Stock Option Agreement
shall be subject to all of the terms and provisions of the Plan, which are
incorporated hereby and made a part hereof, including, without limitation, the
provisions of Section 8 of the Plan (generally relating to consents required by
securities and other laws) and Section 11 of the Plan (generally relating to the
effects of certain reorganizations and other extraordinary transactions and
providing the Committee with the ability to adjust performance targets). In the
event there is any inconsistency between the provisions of this Stock Option
Agreement and the Plan, the provisions of this Stock Option Agreement shall
govern.
SECTION 7. Grantee's Acknowledgments. By entering into this Stock
Option Agreement, the grantee agrees and acknowledges that (a) he has received
and read a copy of the Plan, including Section 14.3 of the Plan (generally
relating to waivers of claims to continued exercisability of awards, damages and
severance entitlements related to non-continuation of awards), and accepts this
option upon all of the terms thereof, and (b) no member of the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any award thereunder or under this Stock Option Agreement.
SECTION 8. Stockholder Restrictions
(a) Restrictions on Transfer of Stock Acquired by Option Exercise.
(i) Limitation on Transfer. The grantee shall not sell, give,
assign, hypothecate, pledge, encumber, grant a security interest in or
otherwise dispose of (whether by operation of law or otherwise) (each a
"transfer") any Stock or any right, title or interest therein or
thereto, except in accordance with the provisions of this Agreement.
Any attempt to transfer any Stock or any rights hereunder in violation
of the preceding sentence shall be null and void ab initio.
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(ii) Permitted Transfers. At any time after December 31, 2003,
the grantee may, subject to this Section 8(a)(ii), Section 8(a)(iii)
and Section 8(b), transfer all, but not less than all, of the Stock
owned by the grantee to any Person other than a Person involved with
the medical or employee staffing industry other than through the
Company (each a "Permitted Transferee"); provided that the
consideration for such transfer shall consist solely of cash. No such
transfer to a Permitted Transferee shall be effective unless such
Permitted Transferee becomes a party to a separate agreement setting
forth substantially the same terms as this Section 8. No Permitted
Transferee of Stock pursuant to this Section 8(a)(ii) shall thereafter
re-transfer such Stock except in accordance with this Section 8(a)(ii)
and Section 8(a)(iii).
(iii) Permitted Transfer Procedures. The grantee shall give
notice to the Company and AMN Acquisition Corp., a Delaware corporation
("AMN") of its intention to make any transfer permitted under Section
8(a)(ii) not less than thirty (30) calendar days prior to effecting
such transfer, which notice shall state the name and address of the
party to whom such transfer is proposed and the Stock proposed to be
transferred.
(b) Proposed Voluntary Transfers by the Grantee; Right of First
Refusal.
(i) Offering Notice. If after December 31, 2003 the grantee
has received a bona fide offer from a Person (the "Third Party
Purchaser") to pay for cash (a "Third Party Offer") all of its Stock
(the "Offered Stock") and the grantee desires to accept the Third Party
Offer, then the grantee (the "Selling Stockholder") shall make an offer
(the "Offer") to sell the Offered Stock to AMN and the Company by
sending written notice (the "Offering Notice") to the Company and AMN,
which notice shall state (x) the number of shares of Offered Stock and
(y) all material terms and conditions of such proposed sale (including
the proposed purchase price per share of Stock).
(ii) Offer Price. Upon receipt of the Offering Notice, AMN or
its designee and the Company (to the extent that AMN or its designee
does not exercise its right of first refusal for the Offered Stock)
shall have the right, but not the obligation, to purchase collectively
all, but not less than all, of the Offered Stock. If the Offer is
accepted by AMN's designee, AMN shall remain responsible for such
designee's performance hereunder. The right of first refusal shall be
exercisable with respect to the Offered Stock (i) by AMN or its
designee and (ii) by the Company, to the extent that AMN or its
designee does not exercise its right of first refusal for all of the
Offered Stock, by written notice to the Selling Stockholder (with a
copy to the Company) within twenty (20) calendar days (in the case of
AMN) and within thirty (30) calendar days (in the case of the Company)
of receipt of the Offering Notice. Failure by AMN or the
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Company to respond within the applicable Notice Period shall be
regarded as a rejection of the Offer.
(iii) Sell Option. If all of the Offered Stock has not been
acquired by AMN or its designee or the Company, the Selling
Stockholder(s) shall have the right to sell such Stock to the Third
Party Offeror on the terms and conditions of the Third Party Offer;
provided, that any such sale must be consummated within 45 calendar
days of the date of the Offering Notice; provided however, that if
compliance with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 is necessary to consummate such sale, the 45-day period may be
extended to the end of the waiting period thereunder (but in no event
no more than 75 calendar days after the date of the Offering Notice).
In the event that such sale is not consummated within such 45-day
period (as extended if applicable) for any reason, then the
restrictions provided for herein shall again become effective, and no
transfer of such Offered Stock may be made thereafter by such Selling
Stockholder(s) without again complying with this Section 8(b)(iii).
(c) Drag-Along Right.
(i) Sale of the Company. In the event AMN (the "Initiating
Seller") proposes to sell any of its Stock in one or more related
transactions, including without limitation, a merger or consolidation
(a "Drag-Along Sale") to a bona fide third party purchaser (the
"Proposed Transferee") on an arm's-length basis, the Initiating Seller
shall have the right (the "Drag-Along Right") to require the grantee
(the "Drag-Along Seller") to sell, and the Drag-Along Seller hereby
agrees to sell, to the Proposed Transferee:
(1) until AMN has sold (or will have sold as a result of such
sale (assuming no tag-along rights are exercised on such sale)) Stock to a third
party in an amount equal to at least 75 percent (75%) of the Stock owned by AMN
as of the date hereof (the "Threshold Event"), that number of shares of Stock
(but not less than such number of shares of Stock) which is equal to the product
of (x) the number of Shares held by the grantee and (y) a fraction (A) the
numerator of which is the number of outstanding shares of Stock proposed to be
sold by the Initiating Seller and (B) the denominator of which is the number of
shares of Stock owned by the Initiating Seller; and
(2) from and after the Threshold Event, all, but not less than
all, of its Stock (such amount referred to in clause (1) or (2), as the case may
be, for the grantee being herein referred to as the "Drag-Along Amount").
(ii) Sale Notice. The Initiating Seller shall notify the
Company, and the Company shall promptly notify the Drag-Along Seller in
writing of such proposed Transfer (the "Sale Notice"). The Sale Notice
shall set forth (a) the name and address of the Proposed Transferee and
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(b) a copy of the written proposal pursuant to which the Drag-Along
Sale will be effected, containing all of the material terms and
conditions thereof, including (1) the number of shares of Stock
(calculated on a fully diluted, as converted basis) proposed to be
transferred by the Initiating Seller, (2) the applicable Drag-Along
Amount, (3) the price per share of Stock to be paid, (4) the terms and
conditions of payment offered by the Proposed Transferee, (5) whether
the Initiating Seller has determined to exercise the Drag-Along Right,
(6) in the event the Initiating Seller has determined to exercise the
Drag-Along Right, that the Proposed Transferee has been informed of the
Drag-Along Right provided for in this Section 8(c) and has agreed to
purchase the applicable Drag-Along Amount in accordance with the terms
hereof and (7) the date and location of and procedures for selling
Stock to the Proposed Transferee.
(iii) Purchase of Drag-Along Amount. The Stock purchased from
the Drag-Along Seller by the Proposed Transferee pursuant to this
Section 8(c) shall be paid for at the same price per share and upon
terms and conditions no less favorable than the terms and conditions
applicable to the Stock to be sold by the Initiating Seller.
(d) Stock Certificate Legend; Recording of Transfer. A copy of
this Agreement shall be filed with the Secretary of the Company and kept with
the records of the Company. Each certificate representing Stock now held or
hereafter acquired by the grantee shall, at the option of the Company, for as
long as this Section 8 is effective, bear a legend as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER HEREOF THAT SUCH REGISTRATION IS
NOT REQUIRED AS TO SUCH SALE OR OFFER.
THE TRANSFER AND PLEDGE OF ANY OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY THE TERMS OF THIS STOCK OPTION AGREEMENT,
DATED AS OF DECEMBER 13, 2000, AMONG THE COMPANY AND THE GRANTEE, A COPY
OF WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE.
(e) All Transfers in Compliance with Law and Subject to this Agreement.
Any transfer of Stock permitted or required by this Agreement must be in
compliance
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with the applicable provisions of this Agreement and with federal and
state securities laws, including, without limitation, the Securities Act.
(f) Specific Performance. The parties hereto intend that each of the
parties have the right to seek damages and/or specific performance in the event
that any other party hereto fails to perform such party's obligations hereunder.
Therefore, if any party shall institute any action or proceeding to enforce the
provisions hereof, any party against whom such action or proceeding is brought
hereby waives any claim or defense therein that the plaintiff party has an
adequate remedy at law.
(g) Definitions. For purposes hereof, the following term shall have the
meanings set forth below:
"Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association, joint stock
company, trust, unincorporated organization, governmental body or other entity.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Stock" means, with respect to each Stockholder, all shares,
whether now owned or hereafter acquired, of Common Stock owned by such
Stockholder.
(h) Term. This entire Section 8 shall terminate upon the closing of a
bona fide initial public offering of Common Stock of the Company.
SECTION 9. Nontransferability. No option granted to the grantee under
the Plan or this Stock Option Agreement shall be assignable or transferable by
the grantee (whether by operation of law or otherwise and whether voluntarily or
involuntarily), other than by will or by the laws of descent and distribution.
During the lifetime of the grantee, all rights granted to the grantee under the
Plan or under this Stock Option Agreement shall be exercisable only by the
grantee or the grantee's court appointed legal representative. Notwithstanding
the foregoing, with the Committee's consent, the option may be transferred to
one or more members of the grantee's immediate family or trusts all of the
beneficiaries (other than contingent beneficiaries) of which are members of the
grantee's immediate family.
SECTION 10. Forfeiture for Non-Compete Violation.
(a) Non-Compete. The grantee agrees that during the term of
grantee's employment and for a period of two years thereafter (the "Coverage
Period") the grantee will not engage in, consult with, participate in, hold a
position as shareholder, director, officer, consultant, employee, partner or
investor, or otherwise assist any business entity (i) in any State of the United
States of America or (ii) in any other country in which the Company has business
activities, in either case, that is engaged in any activities which are
competitive with the business of providing healthcare or other personnel on a
temporary basis to hospitals, healthcare facilities or other entities and any
and all business activities
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reasonably related thereto in which the Company or any of its divisions,
affiliates or subsidiaries are then engaged.
(b) Non-Solicit. The grantee agrees that during the Coverage
Period, he shall not solicit, attempt to solicit or endeavor to entice away from
the Company any person who, at any time during the Term was a traveling nurse or
other healthcare professional, employee, customer, client or supplier of the
Company.
(c) Confidential and Proprietary Information. The grantee
agrees that he will not, at any time make use of or divulge to any other person,
firm or corporation any confidential or proprietary information concerning the
business or policies of the Company or any of its divisions, affiliates or
subsidiaries. For purposes of this Agreement, any confidential information shall
constitute any information designated as confidential or proprietary by the
Company or otherwise known by the grantee to be confidential or proprietary
information including, without limitation, customer information. Grantee
acknowledges and agrees that for purposes of this Agreement, "customer
information" includes without limitation, customer lists, all lists of
professional personnel, names, addresses, phone numbers, contact persons,
preferences, pricing arrangements, requirements and practices. Grantee's
obligation under this Section 10(c) shall not apply to any information which (i)
is known publicly; (ii) is in the public domain or hereafter enters the public
domain without the fault of grantee; or (iii) is hereafter disclosed to grantee
by a third party not under an obligation of confidence to the Company. Grantee
agrees not to remove from the premises of the Company, except as an employee of
the Company in pursuit of the business of the Company or except as specifically
permitted in writing by the Company, any document or other object containing or
reflecting any such confidential or proprietary information. Grantee recognizes
that all such information, whether developed by the grantee or by someone else,
will be the sole exclusive property of the Company. Upon termination of
employment, grantee shall forthwith deliver to the Company all such confidential
or proprietary information, including without limitation all lists of customers,
pricing methods, financial structures, correspondence, accounts, records and any
other documents, computer disks, computer programs, software, laptops, modems or
property made or held by him or under his control in relation to the business or
affairs of the Company or any of its divisions, subsidiaries or affiliates, and
no copy of any such confidential or proprietary information shall be retained by
him,
(d) Forfeiture for Violations. If the grantee shall at any
time violate the provisions of Section 10(a), (b), or (c), the grantee shall
immediately forfeit all options (whether vested or unvested) and any exercise of
an option which occurs after (or within 6 months before) any such violation
shall be void ab initio.
SECTION 11. Execution of Agreement. Notwithstanding anything contained
in this Stock Option Agreement to the contrary, no option may be exercised until
the grantee has returned an executed copy of this Stock Option Agreement to the
Company.
SECTION 12. Notices. Any notice to be given to the Company hereunder
shall be in writing and shall be addressed to 00000 Xx Xxxxxx Xxxx, Xxxxx 000,
San Diego,
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California 92130 or at such other address as the Company may hereafter designate
to the grantee by notice as provided herein. Any notice to be given to the
grantee hereunder shall be addressed to the grantee at the address set forth
below or at such other address as the grantee may hereafter designate to the
Company by notice as provided herein. Notices hereunder shall be deemed to have
been duly given when received by personal delivery or by registered or certified
mail to the party entitled to receive the same.
SECTION 13. Reorganization Event. The option awarded hereunder may be
subject, in the Committee's discretion, to termination on account of a
Reorganization Event affecting the Company, as described in Section 17 of the
Plan.
SECTION 14. Successors and Assigns. This Stock Option Agreement shall
be binding upon and inure to the benefit of the parties hereto and the
successors and assigns of the Company and, to the extent set forth in the Plan,
the heirs and personal representatives of the grantee.
SECTION 15. Governing Law. This Agreement shall be governed by the laws
of the State of Delaware applicable to agreements made and to be performed
entirely within such State.
SECTION 16. Modifications to Agreement. This Agreement may not be
altered, modified, changed or discharged, except by a writing signed by or on
behalf of both the Company and the grantee.
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IN WITNESS WHEREOF, the parties hereto have executed this Stock
Option Agreement as of the date and year first above written.
AMN HOLDINGS, INC.
By: /s/Xxxxxx X. Xxxxxxx
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Title:
/s/ Xxxxx Xxxxxxxxxx
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Grantee
X.X. Xxx 0000
Xxxxxx Xxxxx Xx, XX 00000
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(Address)
