NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________, 1996 and effective as of June 28,
1996, is made by and between __________, a __________ corporation hereinafter
referred to as "Company," and __________, an employee or director of the Company
or a Parent Corporation or Subsidiary of the Company, hereinafter referred to as
"Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee appointed to administer the Plan has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the Non-Qualified Option provided for herein to the
Optionee as an inducement to enter into or remain in the service of the Company,
its Parent Corporations or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary and the singular shall include the plural, where the context so
indicates.
SECTION 1.1 - AMC
"AMC" shall mean American Medserve Corporation, a Delaware
corporation.
SECTION 1.2 - BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.3 - CAUSE
"Cause" shall mean (a) the conviction of a felony by the Optionee (b)
the commission of any act by the Optionee that is materially injurious to the
Company and that involves dishonesty, disloyalty or fraud with respect to the
Company, (c) the Optionee's gross negligence or willful misconduct with respect
to the Company that is materially injurious to the Company or (d) the Optionee's
substantial and repeated failure to perform duties commensurate with his or her
position as reasonably directed in writing by the Board in good faith.
SECTION 1.4 - CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.5 - COMMITTEE
"Committee" shall mean the full Board; provided, however, that the
Board may, but need not, delegate its rights and duties hereunder to a committee
consisting of two or more Board members to serve as the Committee hereunder
during the pleasure of the Board. Any such committee shall have such powers and
duties as are delegated to it by the Board.
SECTION 1.6 - COMMON STOCK
"Common Stock" shall mean the common stock of the Company.
SECTION 1.7 - COMPANY
"Company" shall mean __________.
SECTION 1.8 - EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.9 - MEASUREMENT DATE
"Measurement Date" shall mean __________.
SECTION 1.10 - OFFICER
"Officer" shall mean an officer of the Company, as defined in
Rule 16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
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SECTION 1.11 - OPTION
"Option" shall mean the non-qualified option to purchase Common Stock
of the Company granted under this Agreement.
SECTION 1.12 - PARENT CORPORATION
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
SECTION 1.13 - PARTICIPATION AGREEMENT
"Participation Agreement" shall mean the agreement of even date
herewith entered into by and among the Company and the Optionee that shall
govern certain terms of the Option and shall govern the shares acquired upon
exercise of the Option.
SECTION 1.14 - PLAN
"Plan" shall mean the Stock Option Plan for Directors and Executive
and Key Employees of __________.
SECTION 1.15 - RULE 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
SECTION 1.16 - SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.17 - SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 1.18 - SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
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SECTION 1.19 - TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company is
terminated for any reason, with or without Cause, including, but not by way of
limitation, a termination by resignation, discharge, death or retirement, but
excluding any termination where there is a simultaneous reemployment by the
Company, a Parent Corporation or a Subsidiary. The Committee, in its
discretion, shall determine the effect of all other matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for Cause, and all questions of whether particular leaves of absence constitute
Terminations of Employment.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - GRANT OF OPTION
On the date hereof the Company irrevocably grants to the Optionee the
option to purchase any part or all of an aggregate of ______ shares of Common
Stock upon the terms and conditions set forth in this Agreement and in the
Participation Agreement.
SECTION 2.2 - PURCHASE PRICE
The purchase price of the shares of stock covered by the Option shall
be $______ per share without commission or other charge.
SECTION 2.3 - NOT A CONTRACT OF EMPLOYMENT
Nothing in this Agreement or in the Plan shall confer upon the
Optionee any right to continue in the employ of the Company, any Parent
Corporation or any Subsidiary or shall interfere with or restrict in any way the
rights of the Company, its Parent Corporations and its Subsidiaries, which are
hereby expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without Cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
The Option shall be subject to the provisions of Section 2.3 of the
Plan and Section 4 of the Participation Agreement.
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ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
(a) (i) An installment consisting of 20% of the shares covered by
the Option shall become exercisable within 90 days following each of the
first five anniversaries of the Measurement Date if the Company achieves
the performance targets established by Committee for the fiscal year ending
immediately prior to such anniversary.
(ii) Within 90 days of each fiscal year end, the Committee shall
certify whether the respective performance targets have been met, and shall
determine the extent to which the Option has become exercisable.
(iii) As of the date hereof, ___% of the shares covered by the
Option are exercisable under this Section 3.1(a) based on attainment of the
performance targets through June 30, 1996.
(b) Notwithstanding subsection (a), and subject to Section 5.6, the Option
shall become exercisable in seven (7) equal cumulative installments of one-
seventh each on each of the first seven anniversaries of the Measurement Date.
(c) Except as the Committee may, in its discretion, determine otherwise,
no portion of the Option which is unexercisable at Termination of Employment
shall thereafter become exercisable.
SECTION 3.2 - EXPIRATION OF OPTION
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten years from the date the Option was granted; or
(b) Except if the Optionee is disabled (within the meaning of Section
22(e)(3) of the Code), the expiration of three months from the date of the
Optionee's Termination of Employment for any reason other than death, Cause or
voluntary resignation, provided that if the Optionee dies within said
three-month period, the Options shall cease to be exercisable upon the
expiration of one year from the Optionee's date of death; or
(c) If the Optionee is disabled (within the meaning of Section 22(e)(3) of
the Code), the expiration of one year from the date of the Optionee's
Termination of Employment for any reason other than Cause or death; provided
that if the Optionee dies within said one-year period, the Options shall cease
to be exercisable upon the expiration of one year from the Optionee's date of
death; or
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(d) The date of the Optionee's Termination of Employment for Cause or by
reason of voluntary resignation; or
(e) The expiration of one year from the date of the Optionee's death.
ARTICLE IV
EXERCISE OF OPTION
SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
During the lifetime of the Optionee, only he or she may exercise the
Option or any portion thereof. After the death of the Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.2, be exercised by his or her personal
representative or by any person empowered to do so under the Optionee's will or
under the then applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.2.
SECTION 4.3 - MANNER OF EXERCISE
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his or her office of all of the following
prior to the time when the Option or such portion becomes unexercisable under
Section 3.2:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee.
(b) Full payment for the shares with respect to which such Option or
portion is thereby exercised. The payment shall be paid in cash or if the
Option Agreement so provides, (i) in whole or in part, through the delivery of
shares of Common Stock owned by the Optionee, duly endorsed for transfer to the
Company, having a fair market value on the date of exercise equal to the
aggregate exercise price of the exercised Option or portion thereof, (ii) in
whole or in part, by surrender of shares of Common Stock then issuable upon
exercise of the Option having a fair market value on the date of exercise equal
to the aggregate exercise price of the exercised Option (or portion thereof), or
(iii) by any combination of the foregoing. Fair market value for purpose of
this Section 5.3(b) shall be determined as of the date of exercise pursuant to
the method described in Section 4.2(b) of the Plan.
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(c) Such representations and documents as the Committee, in its
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its discretion, also take
whatever additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates and issuing
stop-transfer orders to transfer agents and registrars.
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; provided, however, that with the consent of the
Committee, (i) shares of Common Stock owned by the Optionee duly endorsed for
transfer, or (ii) subject to the timing requirements of Section 4.4, shares of
Common Stock issuable to the Optionee upon exercise of the Option, valued in
accordance with Section 4.2(b) of the Plan at the date of Option exercise, may
be used to make all or part of such payment.
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
SECTION 4.4 - CERTAIN TIMING REQUIREMENTS
To the extent necessary to comply with the requirements to which
shares of Common Stock are subject under Rule 16b-3, Common Stock issuable to
the Optionee upon exercise of the Option may be used to satisfy the tax
withholding consequences of such exercise only (a) during the period beginning
on the third business day following the date of release of the quarterly or
annual summary statement of sales and earnings of the Company and ending on the
twelfth business day following such date or (b) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
withholding taxes (subject to the approval of the Committee) made at least six
months prior to the payment of such Option price or withholding taxes.
SECTION 4.5 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on any and all stock exchanges
on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange
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Commission or of any other governmental regulatory body, which the Committee
shall, in its discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
SECTION 4.6 - RIGHTS AS SHAREHOLDER
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
SECTION 4.7 - TRANSFER RESTRICTIONS
Shares acquired upon exercise of Options shall be subject to the terms
of the Participation Agreement. To the extent necessary to comply with the
requirements to which shares of Common Stock are subject under Rule 16b-3,
unless otherwise approved in writing by the Committee, no shares acquired upon
exercise of an Option by any Optionee who is an Officer may be sold, assigned,
pledged, encumbered or otherwise transferred until at least six months have
elapsed from (but excluding) the date that the Option was granted.
ARTICLE V
OTHER PROVISIONS
SECTION 5.1 - ADMINISTRATION
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option.
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SECTION 5.2 - OPTION NOT TRANSFERABLE
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his
or her successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
SECTION 5.3 - SHARES TO BE RESERVED
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
SECTION 5.4 - NOTICES
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him or her at the
address given beneath his or her signature hereto. By a notice given pursuant
to this Section 5.4, either party may hereafter designate a different address
for notices to be given to him, her or it. Any notice which is required to be
given to the Optionee shall, if the Optionee is then deceased, be given to the
Optionee's personal representative if such representative has previously
informed the Company of his or her status and address by written notice under
this Section 5.4. Any notice shall be deemed duly given when enclosed in a
properly sealed envelope or wrapper addressed as aforesaid, deposited (with
postage prepaid) in a post office or branch post office regularly maintained by
the United States Postal Service.
SECTION 5.5 - TITLES
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - CONSTRUCTION
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
SECTION 5.7 - CONFORMITY TO SECURITIES LAWS
The Optionee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder,
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including without limitation Rule 16b-3. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
SECTION 5.8 - COVENANT NOT TO COMPETE; CONFIDENTIAL INFORMATION
(a) In consideration of the Company entering into this Agreement with
the Optionee, the Optionee hereby agrees that effective as of the date hereof,
for so long as the Optionee is employed by the Company or a Parent Corporation
or Subsidiary and for a period of two years thereafter (the "Noncompete
Period"), the Optionee shall not at any time in any capacity, directly or
indirectly, do any of the following: (i) provide any management, consulting,
financial, administrative or other services to any Competing Organization (as
defined below), including without limitation, participating directly or
indirectly as an officer, director, stockholder, member, operator, sole
proprietor, independent contractor, consultant, franchisor, franchisee, owner,
employee, agent, representative or partner of, or having any direct or indirect
financial interest (including, without limitation, the interest of a creditor)
in, any "Competing Organization" or (ii) permit the Optionee's name to be used
by any Competing Organization. "Competing Organization" shall include any
person, organization, business or other enterprise (x) located or doing business
within the states of Illinois and Wisconsin (the "Geographic Area"), and (y)
currently engaged in, or about to become engaged in, a business identical to or
similar to the business of the Company or any of its affiliates, including
without limitation, the provision of the following services and/or products:
enteral nutrition services and products, parenteral services and products,
infusion therapy services and products, wound care management services and
products, urological services and products, ostomy services and products, and
pharmacy or pharmaceutical services and products.
(b) During the Non-Compete Period, the Optionee shall not at any time
in any capacity, directly or indirectly, (i) induce or attempt to induce any
employee of the Company or any of its affiliates to leave their employ, or
otherwise solicit the employment of any employee of the Company or any of its
affiliates, hire any such employee or in any way interfere with the relationship
between the Company or any of its affiliates and any of their respective
employees, (ii) induce or attempt to induce any supplier, licensee, licensor,
franchisee, or other business relation of either the Company or any of its
affiliates to cease doing business with them or in any way interfere with the
relationship between either the Company or any of its affiliates and any of
their respective customers or business relations, or (iii) solicit the business
of any then existing patient or customer of the Company or any of its
affiliates.
(c) The Optionee will not disclose or use at any time for so long as
the Optionee is employed by the Company or a Parent Corporation or Subsidiary
and thereafter, any Confidential Information (as defined below) of which the
Optionee is or becomes aware, whether or not such information is developed by
him or her, except to the extent that such disclosure or use is directly related
to and required by the Optionee's performance of duties,
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if any, assigned to the Optionee by the Company. As used in this Agreement, the
term "Confidential Information" means information that is not generally known to
the public and that is used, developed or obtained by the Company or a Parent
Corporation or Subsidiary in connection with its business, including but not
limited to (i) products or services, (ii) fees, costs and pricing structures,
(iii) designs, (iv) computer software, including operating systems, applications
and program listings, (v) flow charts, manuals and documentation, (vi) data
bases, (vii) accounting and business methods, (viii) inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and
whether or not reduced to practice, (ix) customers and clients and customer or
client lists, (x) other copyrightable works, (xi) all technology and trade
secrets, and (xii) all similar and related information in whatever form.
Confidential Information will not include any information that has been
published in a form generally available to the public prior to the date the
Optionee proposes to disclose or use such information. The Optionee
acknowledges and agrees that all copyrights, works, inventions, innovations,
improvements, developments, patents, trademarks and all similar or related
information which relate to the actual or anticipated business of the Company
and any Parent Corporation or Subsidiary (including its predecessors) and
conceived, developed or made by the Optionee while employed by the Company or a
Parent Corporation or Subsidiary belong to the Company. The Optionee will
perform all actions reasonably requested by the Company (whether during or after
the Noncompete Period) to establish and confirm such ownership at the Company's
expense (including without limitation assignments, consents, powers of attorney
and other instruments).
(d) Notwithstanding subsections (a), (b) and (c), if, at the time of
enforcement of any of the provisions of this Section 5 a court holds that the
restrictions stated herein are unreasonable under the circumstances then
existing or are otherwise illegal, invalid or unenforceable in any respect by
reason of its duration, definition of Geographic Area or scope of activity, or
any other reason, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area.
(e) The Company and the Optionee Investor hereby acknowledge and
agree that the provisions of this Section 5 in no way amend, modify or supersede
any other non-compete or non-solicitation agreement between the Company or any
of its affiliates and the Optionee.
(f) Without limiting any of the Company's rights under this
Agreement, the parties hereto acknowledge that the Company shall be entitled to
enforce its rights under this Section 5 specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provisions of this Section 5 and to exercise all other rights existing in its
favor. The parties hereto acknowledge and agree that the breach of any term or
provision of this Section 5 by the Optionee shall materially and irreparably
harm the Company, that money damages shall accordingly not be an adequate remedy
for any breach of the provisions of this Section 5 by the Optionee and that the
Company in its sole discretion and in addition to any other remedies it may have
at law or in equity may apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for
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specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Section 5.
[signature page follows]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
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By
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President
By
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Secretary
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----------------------------
Address
Optionee's Taxpayer
Identification Number:
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