XXXXXX.XXX, INC. (FKA EMPOWER HEALTH CORPORATION)
AMENDED & RESTATED 1997 STOCK OPTION PLAN
AMENDED & RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the xxxxxx.xxx,
Inc. (fka Empower Health Corporation) Amended & Restated 1997 Stock Option Plan
(the "Plan") shall have the same defined meanings in this Stock Option Agreement
(the "Agreement"). This Amended and Restated Non-Qualified Stock Option
Agreement amends and restates in its entirety the Agreement dated August 20,
2001 previously entered into by the parties.
I. NOTICE OF STOCK OPTION XXXXX
X. Xxxxx Xxxxxx, Jr.
You ("Optionee") have been granted an option (the "Option") to purchase
shares of Common Stock of the Company (the "Shares"), subject to the terms and
conditions of the Plan and this Agreement. The terms of your grant are set forth
below:
Date of Xxxxx: August 20, 2001
Vesting Commencement Date: August 20, 2001
Exercise Price per Share: $0.112 per share
Total Number of Shares Granted: 1,500,000
Total Exercise Price: $168,000
Type of Option: Non-Qualified Stock Option
Term/Expiration Date: August 20, 2011 (Tenth anniversary
of Vesting Commencement Date)
Exercise and Vesting Schedule:
This Option shall vest and become exercisable according to the following
schedule:
Subject to the following paragraphs, this Option shall vest and become
exercisable with respect to 100,000 of the shares of the Company's Common Stock
subject to the Option on the Option's Date of Grant, and thereafter, with
respect to 466,666 of the Shares on the first twelve-month anniversary of the
Option's Vesting Commencement Date, followed by 466,667 of the Shares on each of
the second and third twelve-month anniversaries of the Option's Vesting
Commencement Date (each a "Vesting Date"), such that this Option shall be vested
and exercisable with respect to one hundred percent (100%) of the Shares on the
third anniversary of the Option's Vesting Commencement Date; provided, however,
that Optionee has remained in Continuous Status (as defined below) as an
Employee or consultant as of each Vesting Date. The term "Employee", as used in
this Agreement, means any executive and other salaried or non-salaried employee
of the Company and/or one or more of its subsidiary corporations. The term
"consultant", as used in this Agreement, shall have the meaning set forth in
Section 1 of the Plan.
For purposes of this Agreement, "Continuous Status" as an Employee or
consultant shall mean the absence of any interruption or termination of service
as an Employee or consultant. Continuous Status as an Employee or consultant
shall not be considered interrupted in the case of sick leave, military leave,
or any other leave of absence approved by the Committee (as defined in the
Plan), provided that such leave is for a period of not more than 90 days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute. For purposes of this Agreement, a change in status from an Employee to
a consultant or from a consultant to an Employee will not constitute a
termination of employment.
Notwithstanding the foregoing, in the event (a) of a Change in Control
(as defined below) this Option shall immediately vest and become exercisable
with respect to fifty percent (50%) of the unvested Shares subject to the Option
as of the date of such Change in Control; provided, however, that Optionee has
remained in Continuous Status as an Employee or consultant as of the date of
such Change of Control or (b) that Optionee is terminated without Cause (as
defined below) or terminates his employment for Good Reason (as defined below),
any unvested portion of the Option as of the date of such termination shall
immediately vest and become exercisable. The terms Cause and Good Reason shall
have the meanings ascribed to them in that certain Employment Agreement between
drkoop LifeCare, a Delaware corporation and a wholly-owned first-tier subsidiary
of Company and Optionee, dated as of August 20, 2001, as may be amended from
time to time.
For purposes of the Option, "Change in Control" shall mean: (i) any
sale, merger, consolidation, tender offer or similar acquisition of shares, or
other transaction or series of related transactions (each a "Transaction") as a
result of which at least a majority of the voting power of Company is not held,
directly or indirectly, by the persons or entities who held the Company's
securities with voting power before such Transaction; (ii) a sale or other
disposition of all or substantially all of the Company's assets, whether in one
transaction or a series of related transactions; or (iii) individuals who on the
date hereof constitute Company's Board of Directors and any new director (other
than a director designated by a person or entity who has entered into an
agreement to effect a transaction described in clause (i) or (ii) above) whose
nomination and/or election to the Board was approved by a vote of at least a
majority of the directors then still in office who either were directors on the
date hereof or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Company's or such
parent's Board of Directors.
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Termination Period:
This Option may be exercised, to the extent vested, for three (3) months
after Optionee ceases to be an Employee or consultant, or for twelve (12) months
following the death or disability of Optionee as provided in the Plan, but in no
event later than the Term/Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Company hereby grants to the Optionee an Option
to purchase the number of Shares set forth in the Notice of Stock Option Grant
(the "Notice of Grant"), at the exercise price per share set forth in the Notice
of Grant (the "Exercise Price"). Notwithstanding anything to the contrary
anywhere else in this Agreement, this grant of an Option is subject to the
terms, definitions and provisions of the Plan adopted by the Company, which is
incorporated herein by reference. This Option is not intended to, and does not,
qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise of Option. This Option is exercisable as follows:
(a) Right to Exercise.
(i) This Option shall be exercisable cumulatively according to
the vesting schedule set out in the Notice of Grant. For purposes of this
Agreement, Shares subject to this Option shall vest based on Optionee's
Continuous Status as an Employee or consultant.
(ii) This Option may not be exercised for a fraction of a Share.
(iii) In the event of Optionee's termination of Continuous Status
as an Employee or consultant, the exercisability of the Option is governed by
Section 5 below.
(iv) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Grant.
(b) Method of Exercise. This Option shall be exercisable by written
Notice (in the form attached as Exhibit A). The Notice must state the number of
Shares for which the Option is being exercised, and such other representations
and agreements with respect to such shares of Common Stock as may be required by
the Company pursuant to the provisions of the Plan or as may be necessary in
order for the Company to comply with applicable laws. The Notice must be signed
by the Optionee and shall be delivered in person or by certified mail to the
Secretary of the Company. The Notice must be accompanied by payment of the
Exercise Price, including payment of any applicable withholding tax. This Option
shall be deemed to be exercised upon receipt by the Company of such written
Notice accompanied by the Exercise Price and payment of any applicable
withholding tax.
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No Shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise comply with Applicable Laws and the requirements
of any stock exchange upon which the Shares may then be listed. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.
3. Method of Payment. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(a) cash;
(b) check;
(c) with the consent of the Committee, other shares of Common Stock
that (i) in the case of shares acquired upon exercise of an option granted by
the Company either have been owned by the Optionee for more than six months on
the date of surrender or were not acquired, directly or indirectly, from the
Company, and (y) have a fair market value (as defined in the Plan) on the date
of surrender equal to the aggregate exercise price of the shares as to which
said Option shall be exercised;
(d) with the consent of the Committee in its sole and absolute
discretion, authorization from the Company to retain from the total number of
shares as to which the Option is exercised that number of shares having a fair
market value on the date of exercise equal to the exercise price for the total
number of shares as to which the Option is exercised;
(e) with the consent of the Committee, delivery of a properly
executed exercise notice together with irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds required to
pay the exercise price;
(f) with the consent of the Committee, a combination of any of the
foregoing methods of payment;
(g) with the consent of the Committee, a combination of any of the
foregoing methods of payment at least equal in value to the stated capital
represented by the Shares to be issued, plus a promissory note for the balance
of the exercise price; or
(h) with the consent of the Committee, such other consideration and
method of payment for the issuance of Shares to the extent permitted under
Applicable Laws.
4. Restrictions on Exercise. If the issuance of Shares upon such
exercise or if the method of payment for such shares would constitute a
violation of any applicable federal or state securities or other law or
regulation, then the Option may also not be exercised. The Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation before allowing the Option to be
exercised.
5. Termination of Relationship. If Optionee terminates Continuous Status
as an Employee or consultant for any reason, Optionee may exercise this Option
during the Termination Period set out in the Notice of Grant, to the extent the
Option was vested at the date
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of such termination. To the extent that Optionee was not vested in this Option
at the date on which Optionee terminates Continuous Status as an Employee or
consultant, or if Optionee does not exercise this Option within the time
specified herein, the Option shall terminate.
6. Non-Transferability of Option. This Option may not be transferred in
any manner except by will or by the laws of descent or distribution. It may be
exercised during the lifetime of Optionee only by Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
7. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant.
8. Termination of Employment or Service Relationship. This Option
confers no right upon the Optionee with respect to the continuation of his or
her employment or service relationship with the Company or any of its
subsidiaries, and shall not interfere with the right of the Company or its
subsidiaries to terminate his or her employment or service relationship at any
time.
[SIGNATURE PAGE FOLLOWS]
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This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which shall constitute one
document.
XXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
__________________________________
Title: Chief Executive Officer
_________________________________
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT
AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER) OR AS OTHERWISE
SPECIFICALLY PROVIDED HEREIN. OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE XXXXXX.XXX, INC. (FKA EMPOWER
HEALTH CORPORATION) AMENDED & RESTATED 1997 STOCK OPTION PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT
WITH RESPECT TO CONTINUATION OF CONSULTANCY OR EMPLOYMENT BY THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE OPTIONEE'S CONSULTANCY OR EMPLOYMENT AT ANY
TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and represents that
he is familiar with the terms and provisions thereof. Optionee hereby accepts
this Option subject to all of the terms and provisions hereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. 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 Option. Optionee further
agrees to notify the Company upon any change in the residence address indicated
below.
Dated: August 20, 2001 /s/ X. Xxxxx Xxxxxx, Xx.
____________________________________
X. Xxxxx Xxxxxx, Xx.
Residence Address:
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EXHIBIT A
XXXXXX.XXX, INC. (FKA EMPOWER HEALTH CORPORATION)
AMENDED & RESTATED 1997 STOCK OPTION PLAN
EXERCISE NOTICE
xxxxxx.xxx, Inc.
Attention: Secretary
1. Exercise of Option. Effective as of today, ___________, _____, the
undersigned ("Optionee") hereby elects pursuant to this Exercise Notice (this
"Agreement") to exercise Optionee's option to purchase _________ shares of the
Common Stock (the "Shares") of xxxxxx.xxx, Inc. (the "Company") under and
pursuant to the xxxxxx.xxx, Inc. (fka Empower Health Corporation) Amended &
Restated 1997 Stock Option Plan (the "Plan") and the Amended and Restated
Non-Qualified Stock Option Agreement dated _____________, _____, (the "Option
Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement. Optionee agrees
to abide by and be bound by their terms and conditions.
3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to Shares subject to the Option, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 5 of the Plan. Optionee
shall enjoy rights as a stockholder until such time as Optionee disposes of the
Shares.
4. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
5. Restrictive Legends.
(a) Legends. Optionee understands and agrees that the Company shall
cause any other legends that may be required by state or federal securities laws
to be placed upon any certificate(s) evidencing ownership of the Shares.
(b) Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.
6. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.
7. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Committee, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on the
Company and on Optionee.
8. Governing Law; Severability. This Agreement shall be governed by and
construed in accordance with the laws of the State of California excluding that
body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
9. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
10. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
11. Delivery of Payment. Optionee herewith delivers to the Company the
full Exercise Price for the Shares, as well as any applicable withholding tax.
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12. Entire Agreement. The Plan and Option Agreement are incorporated
herein by reference. This Agreement, the Plan and the Option Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Optionee with respect
to the subject matter hereof.
Submitted by: Accepted by:
OPTIONEE: XXXXXX.XXX, INC.
__________________________________
X. Xxxxx Xxxxxx, Xx. By: ___________________________________
Its: __________________________________
Address:
___________________________________
___________________________________
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